New Mexico Medicaid spousal impoverishment rules protect the at-home spouse's assets and monthly income when their partner applies for long-term care under Centennial Care. New Mexico is an income-cap state, so over-income applicants need a Miller Trust to qualify.
How New Mexico Medicaid Spousal Impoverishment Works
When one spouse applies for long-term care coverage under New Mexico's Centennial Care program, administered by the New Mexico Health Care Authority (HCA), both spouses' finances are reviewed for eligibility. Federal Medicaid spousal impoverishment rules under 42 USC § 1396r-5 protect the community spouse, the partner who stays home, by reserving a share of the couple's assets and a minimum monthly income.
New Mexico is an income-cap state, which means there is no spend-down option for applicants whose income exceeds the income limit. An applicant over the cap must establish a Qualified Income Trust (also called a Miller Trust) before the application can be approved.
The two core spousal protections are the Community Spouse Resource Allowance (CSRA) on assets and the Minimum Monthly Maintenance Needs Allowance (MMMNA) on income.
The CSRA: Asset Protection for the At-Home Spouse
How the CSRA is determined. HCA takes a snapshot of the couple's combined countable assets on the date the Medicaid application is filed or the applicant is institutionalized. The community spouse keeps half of that amount, within the federal floor and ceiling.
- Minimum: $32,532. The community spouse is guaranteed at least this amount, no matter how small the couple's total.
- Maximum: $162,660. Even if half the couple's assets is higher, the protected share is capped here.
For a couple with $100,000 in countable assets, the community spouse keeps $50,000. For a couple with $24,000, the community spouse keeps the full $24,000. For a couple with $420,000, the community spouse keeps $162,660.
After the community spouse's share is set aside, the applicant must spend down their remaining countable assets to $2,000 before Centennial Care coverage begins.
Exempt assets. Assets that are not counted in the snapshot or toward the asset limit include:
- The primary home (community spouse residing there), up to $752,000 in equity
- One vehicle used for household transportation
- Household goods and personal property
- Prepaid irrevocable funeral and burial arrangements
Income Protection: The MMMNA in New Mexico
The MMMNA ensures the community spouse has a minimum monthly income for living expenses.
2026 MMMNA range. The federal floor is $2,643.75 per month (effective July 1, 2025) and the ceiling is $4,066.50 per month (effective January 1, 2026). New Mexico applies these federal figures.
If the community spouse's own income from Social Security, a pension, or other sources already meets or exceeds $2,643.75 per month, no income is redirected from the Medicaid applicant. If the community spouse's income falls below the floor, HCA can allow a portion of the institutionalized spouse's income to be diverted to the at-home spouse to close the gap.
The shelter standard. When computing the MMMNA, HCA applies the federal shelter standard of $793.13 per month. If the community spouse's actual housing costs, including rent or mortgage, property taxes, homeowners insurance, and utilities, exceed $793.13, the allowed MMMNA can be raised above the floor. The maximum MMMNA is $4,066.50.
Fair hearing rights. If the standard MMMNA calculation leaves the community spouse with less than actual living expenses warrant, they can request a fair hearing. Documented evidence of housing and other recurring costs supports the case for a higher allowance.
New Mexico's Income-Cap Rule and the Miller Trust
New Mexico's 2026 income limit for long-term care Medicaid is $2,982 per month, equal to 300% of the federal SSI benefit rate. An applicant whose gross monthly income exceeds this cap cannot qualify through a medically needy spend-down.
Instead, the applicant must establish a Qualified Income Trust (Miller Trust) and submit it to HCA. Each month, income above the $2,982 limit is deposited into the trust. The trust funds are then applied toward the cost of care, after allowances, including any income diverted to the community spouse, are deducted. The trust document must be correctly drafted by an attorney and executed before the application is processed.
The community spouse's own income does not count against the applicant's income cap.
The Home and Estate Recovery
The primary home is exempt while the community spouse lives in it and its equity stays below $752,000. New Mexico's estate recovery program may seek reimbursement from the Medicaid recipient's estate after death, but federal law bars recovery while the community spouse is alive.
How to Apply for New Mexico Long-Term Care Medicaid
Families can apply for Centennial Care through:
- Online: YesNM at yes.state.nm.us
- Phone: 1-800-283-4465
The process includes a functional assessment and a full financial review. New Mexico applies a 60-month look-back to uncompensated transfers, so gifts or below-market-value transfers within five years of the application date can trigger a penalty period.
Frequently Asked Questions
A Miller Trust (Qualified Income Trust) is a legal document into which the applicant deposits income above the $2,982 monthly cap each month. HCA then treats those deposited funds as going toward the cost of care, not as available income. The trust must be established and funded before the application is approved. An elder law attorney handles the drafting.
No. The income cap applies only to the Medicaid applicant. The community spouse's income from their own Social Security, pension, or other sources is not included in the applicant's income test. It matters only for determining whether income needs to be diverted to bring the community spouse up to the MMMNA floor.
If both spouses need long-term care, each applies separately, and the CSRA rules apply symmetrically. Once one spouse has become a Medicaid recipient, the couple's CSRA has already been calculated, and the second spouse's application is reviewed under the standard eligibility rules.
If the community spouse dies before the institutionalized spouse, any assets the community spouse held but had not yet spent may become countable for the institutionalized spouse's Medicaid. This can affect ongoing eligibility and is worth discussing with an elder law attorney when doing advance planning.
Transfers between spouses are generally not penalized under federal Medicaid law. The look-back applies to transfers to third parties, such as gifts to children or sales below market value to friends or relatives. Transferring assets to the community spouse before applying is generally permissible, though the CSRA rules determine how much the community spouse can ultimately keep.
HCA must act on a complete Medicaid application within 45 days for most cases and 90 days when disability must be assessed. Gathering documentation ahead of time, including recent bank statements, tax returns, and property records, reduces delays.
Find personalized help understanding New Mexico Medicaid spousal impoverishment rules at brevy.com.
Learn More
- New Mexico Medicaid Eligibility and Income Limits
- How to Apply for New Mexico Medicaid Long-Term Care
- Medicaid Planning Strategies for Seniors
Find personalized help navigating New Mexico Medicaid spousal impoverishment rules at brevy.com.
The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.