Ohio Medicaid Asset Spend-Down (2026): Resource Limit, Exempt Assets, Lawful Strategies

If you or a family member are applying for Ohio Medicaid Long-Term Care (a nursing facility stay, PASSPORT, Assisted Living Waiver, Ohio Home Care Waiver, or MyCare Ohio HCBS), one operational reality dominates the application: countable resources must be at or below a low, SSI-aligned threshold for a single applicant (with a slightly higher figure for a married couple where both spouses are applying). The community spouse of an institutionalized applicant has separate protection through the Community Spouse Resource Allowance (CSRA), but the applicant's own countable resources must hit that threshold before Medicaid LTC coverage begins. Verify the current dollar figures on the ODM Medicaid Eligibility Procedure Letter (MEPL).

Most families do not start at the limit. They start with a home, a car, household effects, retirement accounts, life insurance, a burial fund, savings, and various accumulated assets. Reaching the limit requires spend-down, and the way you spend down matters. Spending on the right things makes you Medicaid-eligible quickly. Spending on the wrong things, especially gifts and below-market-value transfers, triggers the lookback penalty (see the transfer-penalty lookback guide) and delays eligibility.

This guide walks through every operational piece of Ohio's asset spend-down for LTC: the exempt-asset catalog (assets that do not count toward the limit), the lawful conversion strategies that turn countable resources into exempt assets, the spending categories that safely reduce countable resources without triggering a transfer penalty, and the common mistakes that turn a clean application into a months-long penalty period.

By Brevy Care Team · Last verified May 11, 2026

Federal and Ohio Authority

The asset rules for Medicaid eligibility derive from federal statute and CMS regulations, with state implementation through OAC.

Federal Authority

• The SSI resource rules under federal statute are followed by Ohio Medicaid for the aged, blind, and disabled population. Ohio is a 1634 state.
• Federal Medicaid statute authorizes special income/resource rules for institutionalized applicants.
• The federal Medicaid statute on home equity establishes the home equity exclusion limit (see Section 1917(f) of the Social Security Act).
• The federal Medicaid transfer-penalty statute establishes the rule that limits how you can spend down (see Section 1917(c) of the Social Security Act).
• The SSI exempt-resource regulations list the categories Ohio Medicaid mostly mirrors.

Ohio Authority

• The Ohio Administrative Code (OAC) resource-rule chapter establishes ABD/LTC resource rules and the individual / couple limit; see codes.ohio.gov.
• OAC annuity rules govern Medicaid-compliant annuities (see the transfer-penalty lookback guide for DRA-2005 compliance).
• OAC retirement-account rules cover IRA, 401(k), and similar accounts.
• OAC transfer-penalty rules cover transfer penalties and the lookback.
• OAC burial and funeral provisions specifically cover burial spaces, burial funds, and funeral contracts.
• The current ODM Medicaid Eligibility Procedure Letter (MEPL) publishes the year's standards including the resource limit. Pull the most recent MEPL from medicaid.ohio.gov.
• The current ODM Standards Help Sheet is the operational reference document used by County Department of Job and Family Services (CDJFS) workers.

The Resource Limit, Explained

Ohio's asset limit for a single LTC applicant is a low, SSI-aligned threshold (verify the current dollar figure on the most recent ODM MEPL). For a married couple where both spouses are applying for LTC Medicaid, the limit is a slightly higher figure. For a married couple where one spouse is applying and the other will remain in the community (the typical scenario), the institutionalized spouse must hit the applicant limit and the community spouse has the separate CSRA protection (bounded by federal minimum and maximum figures; verify the current band on the ODM MEPL).

What "Countable" Means

A countable resource is an asset that the applicant could convert to cash and use to pay for care. The CDJFS test:

1. Is the asset owned by the applicant (or jointly with the spouse)?
2. Can the asset be converted to cash?
3. Is the asset's value greater than zero?
4. Is the asset excluded by a specific exemption?

If yes to 1, 2, 3 and no to 4, the asset is countable. The fair market value (FMV) on the application date is what counts.

How CDJFS Verifies

• Bank statements (covering the full lookback window for LTC applications)
• Investment account statements
• Real estate appraisals or county auditor valuations
• Vehicle titles and KBB-equivalent valuations
• Life insurance policy declarations (face value and cash value)
• Retirement account statements
• Documentation of any business interests, partnerships, or trusts

The Full Exempt-Asset Catalog

Ohio recognizes these exempt-asset categories. None of these count toward the resource limit.

1. The Home

The applicant's primary residence is exempt up to the federal home-equity cap. The cap is set in federal Medicaid statute and is adjusted on a published schedule; pull the current figure from the ODM MEPL or HHS guidance.

To preserve home exemption during institutionalization, the applicant or spouse must demonstrate one of:

• Spouse residing in the home. Always exempt regardless of equity (the spouse-residency exception).
• Minor or disabled child residing in the home. Always exempt.
• Sibling co-owner with equity interest who occupied the home for at least one year before the applicant's institutionalization.
• Intent to return. A signed statement by the applicant or representative that the applicant intends to return home. Ohio accepts this even when return is medically unlikely; the test is the applicant's stated intent.

2. One Vehicle of Any Value

One automobile is exempt regardless of value. The applicant can own a modest sedan or a more expensive SUV; either is exempt.

A second vehicle is countable at FMV.

3. Household Goods and Personal Effects

Furniture, appliances, clothing, jewelry of personal use, dishes, electronics, books, and similar household items are exempt. The exemption is broad and is rarely challenged.

Note: Collectibles held for investment purposes (rare coins, art collections, antique cars) may be countable. The CDJFS distinguishes between personal effects and investment assets.

4. Burial Spaces

Burial spaces (cemetery plots, crypts, mausoleums, urns, vaults, headstones, opening and closing costs) are exempt for the applicant, spouse, and immediate family members. There is no dollar limit on burial spaces themselves.

5. Burial Funds (SSI-Aligned Threshold)

A designated burial fund up to the SSI-aligned threshold per applicant and per spouse is exempt. The fund must be:

• Identifiable as set aside for burial (separate account or designated funds)
• Documented in the file
• Not commingled with other funds

The threshold is reduced by the cash value of any life insurance policy designated for burial use, so families with life insurance must coordinate. Verify the current threshold against the ODM Standards Help Sheet.

6. Irrevocable Funeral Contract

An irrevocable prepaid funeral contract with a licensed funeral home is exempt without dollar limit, subject to Ohio's burial-and-funeral OAC rules:

• The contract must be irrevocable
• Funds must be held by the funeral home or in an irrevocable trust account
• The contract must specify goods and services for the named decedent
• Excess funds at death go to the funeral home or to remainder beneficiaries per Ohio funeral pre-need law

A revocable funeral contract is countable at its cash value.

7. Life Insurance

Term life insurance (no cash value) is exempt. Whole life and universal life policies are countable at cash value, but with one important exception:

• Combined face value at or below the SSI-aligned threshold. If the total face value of all life insurance policies on the applicant is within the threshold, the cash value is exempt.
• Combined face value above the threshold. The cash value of all policies is countable.

If a small-face-value policy has any cash value above the threshold rule, that cash value is countable. Families often surrender or transfer ownership of cash-value policies as part of spend-down; transfer of policy ownership without consideration is a transfer penalty event.

8. Retirement Accounts (Conditional Exemption)

Retirement accounts (IRA, 401(k), 403(b), pension, deferred compensation) are exempt under Ohio's retirement-account OAC rules if the applicant is taking required minimum distributions (RMDs) and the account is in pay-status. The RMD income counts as income for the spend-down or Miller Trust calculation.

If the applicant has not annuitized the account or is not taking RMDs, the cash value of the account is countable.

Best practice for an LTC applicant with a substantial retirement account: convert to a Medicaid-compliant DRA annuity or take the RMDs and run the account through a Miller Trust if income exceeds the Special Income Limit (see the Miller Trust guide for the current SIL).

9. Trade or Business Tools

Tools, equipment, or property used in a trade or business are exempt to the extent essential to the business.

10. Property Essential to Self-Support

Some real or personal property essential to self-support (e.g., a small farm operated by the applicant) is exempt under specific rules. The exemption is narrow.

11. Special Needs Trusts and Pooled Trusts

Assets held in a properly drafted self-settled SNT for an under-65 disabled person, or a pooled trust for an under-65 disabled person (the federally authorized SNT vehicles), are exempt. The trust must include a Medicaid payback clause. See the transfer-penalty lookback guide for the rules on funding these trusts.

12. Specific Income-Producing Property

Income-producing property that produces income for the applicant's support may be partially exempt under specific rules; this is fact-specific and requires attorney review.

13. Other SSI-Listed Exemptions

Ohio Medicaid follows SSI in recognizing additional narrow exemptions: certain disaster relief, certain replacement assets after a casualty loss, certain restitution payments. Most LTC applicants do not encounter these.

Lawful Conversion Strategies

Conversion strategies turn countable resources into exempt assets without triggering a transfer penalty. The applicant receives FMV in the form of an exempt asset.

1. Home Improvements and Repairs

The applicant or spouse can use countable cash to:

• Pay off the mortgage on the primary residence (converts countable cash into home equity, which is exempt within the home-equity cap)
• Make capital improvements (roof, foundation, HVAC, plumbing, electrical, additions)
• Make accessibility modifications (wheelchair ramps, grab bars, walk-in shower, stair lift, widened doorways)
• Pay overdue property taxes and homeowners insurance

All of these increase the value of an exempt asset using countable cash; no transfer penalty applies.

2. Vehicle Upgrade

The applicant or spouse can sell an older vehicle and purchase a newer, more reliable one. Within the one-vehicle exemption, any reasonable upgrade is permissible. A family with a modest sedan can replace it with a wheelchair-accessible van; the conversion uses countable cash.

A second vehicle is countable. Spending countable cash to buy a second vehicle does not reduce countable resources (it just changes form).

3. Prepaid Funeral and Burial Arrangements

The applicant and spouse can each:

• Purchase burial spaces (plot, vault, headstone, opening and closing costs) for themselves and immediate family
• Set aside a designated burial fund within the SSI-aligned threshold
• Purchase an irrevocable prepaid funeral contract for any amount within the Ohio OAC burial-and-funeral provisions

Prepaid funerals are one of the most commonly used spend-down strategies because the contract converts a meaningful amount of countable cash into a guaranteed funeral service for the applicant and spouse.

4. Replace or Repair Household Effects

The applicant or spouse can use countable cash to:

• Replace worn furniture, appliances, or electronics
• Buy needed clothing
• Repair home appliances and personal items

Personal effects are exempt; converting countable cash into personal effects is a valid spend-down (as long as the items are for personal use, not investment).

5. Pay Off Legitimate Debts

Paying off the applicant's own debts at FMV is a lawful spend-down. This includes:

• Mortgage principal
• Credit card debt
• Personal loans
• Medical bills
• Taxes owed

The debt must be legitimately the applicant's (not a relative's). Paying off a child's mortgage or credit cards is a gift and triggers a transfer penalty.

6. Prepay Medical and Dental Care

Prepaying for medical, dental, vision, or hearing care that will be received by the applicant is a lawful spend-down. The provider must actually deliver the care; prepayment for never-delivered services is a transfer.

7. Attorney Fees for Medicaid Planning

Reasonable attorney fees for Medicaid eligibility planning are a lawful spend-down. The applicant pays the attorney directly; the attorney provides Medicaid planning services. This converts countable cash into legal services received by the applicant.

8. Caregiver Payment Through a Personal Services Contract

A personal services contract (PSC) is a written agreement between the applicant and a caregiver (often a family member) for caregiving services at FMV. Payments under a PSC are lawful spend-down because the applicant receives services in exchange for payment.

PSC requirements:

• Written contract executed before services are provided
• A reasonable hourly rate (consult an elder-law attorney for current FMV ranges)
• Documented hours and services
• Tax compliance (caregiver receives W-2 or 1099 as appropriate; payroll taxes paid if employer-employee)
• Services within the caregiver's capability and reasonable for the applicant's needs

Without a written PSC, payments to family caregivers are presumed to be gifts and trigger the transfer penalty.

9. Long-Term Care Insurance Premium Payment

If the applicant has a partnership-qualified or other LTC insurance policy, paying premiums to keep the policy active is a lawful spend-down. The applicant continues to receive insurance coverage in exchange for premium payments.

10. Replace Out-of-Date Eyeglasses, Hearing Aids, Dentures, Medical Equipment

Personal medical equipment is exempt and necessary. Replacing worn or outdated items is a valid spend-down.

What Spending Does NOT Reduce Countable Resources

Some spending does not reduce countable resources because it does not deliver value to the applicant.

1. Gifts to Family or Friends

Every dollar gifted within the lookback is a transfer penalty event. The IRS annual gift exclusion is irrelevant to Medicaid. Small annual gifts to grandchildren are aggregated and trigger penalty.

2. Below-FMV Sales

Selling property to family below FMV creates a transfer penalty for the difference between FMV and consideration received.

3. Adding a Non-Spouse to a Deed

Adding a child to a deed transfers the applicant's interest in the property to the child. This is a transfer penalty event.

4. Forgiving a Debt Owed to the Applicant

If the applicant has lent money to a family member and forgives the debt, the forgiven amount is a transfer.

5. Below-Market Cohabitation Without a Personal Services Contract

If a family member moves into the applicant's home to provide care but pays nothing, no penalty applies (no transfer). But if the applicant pays the family member without a written PSC, the payments are presumed gifts.

6. Paying Off a Relative's Debt

Paying off a child's mortgage or credit cards is a gift to the child, not a debt payment by the applicant.

7. Buying Assets Titled to Non-Spouse Family Members

Purchasing a car for a child or a house for a grandchild is a gift.

8. Purchasing a Non-Compliant Annuity

DRA-2005 imposes strict annuity compliance (see /medicaid/ohio/transfer-penalty-lookback). Non-compliant annuities are treated as gifts.

9. Funding a Trust Within the Lookback (Generally)

With limited exceptions (d4A SNT, d4C pooled trust for under-65 disabled), funding an irrevocable trust within the lookback is a transfer penalty event.

10. Charitable Donations

Charitable intent does not exempt the transfer. Large donations within the lookback can trigger penalty. Modest, regular charitable giving consistent with the applicant's lifetime pattern may be rebuttable through the intent test (see the transfer-penalty lookback guide) but is not automatically exempt.

Worked Spend-Down Examples

Example 1: Single Applicant With Modest Assets

Mrs. Foster, 82, is entering a nursing facility. Her countable resources are a modest savings account and small checking balance; her home (mortgage paid off; she intends to return) and one car are exempt.

Target: spend the countable resources down to Ohio's resource limit.

Plan:

• Pay off outstanding credit-card debt
• Purchase an irrevocable prepaid funeral contract
• Designate a burial fund within the SSI-aligned threshold
• Cover needed home repairs (water heater, exterior paint, plumbing)
• Cover needed dental work (full dental clearance and dentures)
• Cover needed accessibility modifications (grab bars, walk-in shower, stair lift)
• Pay attorney fees for Medicaid planning
• Replace worn appliances and furniture

Result: a clean lawful spend-down with no transfer penalty.

Example 2: Married Couple With One Spouse Entering NF

Mr. and Mrs. Garcia. Mr. Garcia is entering a nursing facility; Mrs. Garcia will remain in the community. Their countable assets include joint savings, joint checking, two life insurance policies on Mr. Garcia, and Mrs. Garcia's retirement account; their home and one car are exempt.

Sequence: ODM does a resource snapshot on Mr. Garcia's first NF admission day. The CSRA is calculated as a defined share of the snapshot total, bounded by federal minimum and maximum figures. Mr. Garcia's spend-down is whatever remains after the CSRA and his applicant limit are subtracted from the snapshot.

Plan:

• Prepaid funeral contracts for each spouse
• Designated burial funds for each spouse within the SSI-aligned threshold
• Home repairs and accessibility modifications (new roof, accessibility ramp, walk-in tub for Mrs. Garcia's future use)
• Vehicle upgrade (replace the older car with a newer reliable model for Mrs. Garcia)
• Dental work for Mr. Garcia before NF admission
• Attorney fees for Medicaid planning
• Personal-effects replacement
• Surrender Mr. Garcia's life insurance and spend the proceeds on the above categories
• Pay Mrs. Garcia's pre-existing legitimate debts

Result: Mr. Garcia reaches the resource limit; Mrs. Garcia keeps her CSRA plus the home and the upgraded car.

Example 3: What NOT to Do

The Hill family has substantial savings. Their father is entering a nursing facility. The family decides to give each of the three adult children a sizable check and pay a grandchild's college tuition, keeping only a small amount in the father's account.

Result:

• Tens of thousands in transfers within the lookback
• A penalty period calculated using ODM's current penalty divisor (verify on the MEPL)
• Penalty start: when the father is in NF and otherwise eligible
• Family obligation: pay the NF privately for the penalty period

The Hill family would have been better off using those funds for the father's prepaid funeral, home improvements, and other lawful spend-down. They would have reached eligibility immediately and preserved the funeral and home value for the family.

How Asset Spend-Down Differs From ABD Spend-Down

These are two different programs, often confused.

Asset Spend-Down (This Article)

• For LTC applicants (NF + HCBS waivers)
• Reduces countable resources to Ohio's LTC resource limit
• Subject to the federal LTC lookback for transfers
• One-time mechanic at application
• After eligibility, applicant has the resource cap as an ongoing limit

ABD Spend-Down / Pay-In (Different Program)

• For non-LTC Aged, Blind, and Disabled (ABD) applicants with income above the ABD limit (verify the current ABD income limit on the ODM Standards Help Sheet)
• Reduces countable income each month to the ABD limit through medical expenses or pay-in
• NOT subject to the LTC lookback
• Monthly mechanic, not one-time
• Asset rule for ABD Spend-Down is the SSI-aligned resource limit, but the lookback does not apply
• See the pay-in spend-down guide for the full mechanic

The most common confusion: families assume that LTC applicants can simply "pay in" each month like ABD Spend-Down. They cannot. LTC requires a one-time asset spend-down to the resource limit plus full income management through a Miller Trust (if income exceeds the Special Income Limit) or direct contribution to NF cost.

Common Spend-Down Mistakes

1. Gifting cash to children or grandchildren "for safekeeping." Transfer penalty event.
2. Paying off a child's debt. Gift to the child.
3. Selling property to family below FMV. Penalty for the discount.
4. Paying family for caregiving without a written PSC. Presumed gift.
5. Failing to use the prepaid funeral contract option. Leaves countable cash on the table; converts to exempt asset.
6. Not using attorney fees as a lawful spend-down. Families often pay attorney fees from accounts that would have counted as resources; this is a valid lawful spend-down.
7. Buying a second vehicle. Second vehicle is countable; the conversion is not exempt.
8. Surrendering life insurance and then gifting the proceeds. Surrender is fine; the gift triggers penalty.
9. Failing to coordinate with the CSRA. Married applicants must coordinate snapshot-date assessment with the asset spend-down sequence.
10. Treating retirement accounts as cash. Retirement accounts have specific rules under Ohio's retirement-account OAC provisions; conversion to a DRA annuity or Miller Trust may be necessary.
11. Confusing the lookback with the eligibility date. Transfers within 60 months count even if the application is filed later.
12. Spending on assets that benefit non-applicant family members. Even if the spending is "necessary" for a family member's wellbeing, it is a gift.
13. Making large charitable donations. Without intent-test documentation, large donations within the lookback can trigger penalty.
14. Funding a non-d4A trust. Most irrevocable trust funding within the lookback is a transfer.
15. Hitting the resource limit too late or too early. Application timing affects penalty start dates; coordination with attorney is critical.

Coordination with Other Ohio Rules

Coordination with Spousal Impoverishment

Asset spend-down for a married applicant is sequenced with the CSRA snapshot. The order:

1. Snapshot date (first NF admission day or HCBS waiver application date) identifies all marital countable resources.
2. CSRA is calculated as a defined share of the snapshot total, bounded by federal minimum and maximum figures.
3. CSRA + applicant's resource limit = total protected; remainder must be spent down.
4. Spend-down occurs after the snapshot; it does not change the CSRA.
5. The community spouse's resources after the snapshot are not constrained by the applicant's resource limit.

See the spousal impoverishment guide for the full CSRA mechanic.

Coordination with Miller Trust

Asset spend-down handles resources. A Miller Trust handles income above the federal Special Income Limit. If the applicant has income above the SIL and substantial resources, both mechanisms must be in place by the application date.

See the Miller Trust guide for the income side.

Coordination with the Transfer Penalty Lookback

Every spend-down decision must be screened against the LTC lookback. Lawful spend-down (the categories in this article) is safe. Any spending that benefits a non-applicant or non-spouse is a transfer.

See the transfer-penalty lookback guide for the full penalty mechanic.

Coordination with Estate Recovery

Estate recovery (see the estate recovery guide) reaches the applicant's estate after death. Some lawful spend-down strategies (e.g., home improvements, prepaid funeral) increase the value of assets that may eventually be subject to recovery. An Ohio transfer-on-death (TOD) deed does not by itself avoid Ohio's expanded estate recovery, which reaches non-probate assets that pass at death.

When DIY Spend-Down Is Plausible

Self-directed spend-down can work for the simplest cases:

• Single applicant
• Modest countable resources
• No real estate beyond the primary residence
• No retirement accounts beyond a small IRA
• No significant gifts in the past several years
• No business interests, partnerships, or trusts

For everything else, attorney representation is essential. The penalty math is unforgiving and the wrong spend-down move can cost substantial private-pay NF costs.

A few more common questions families ask:

Can I prepay my own medical care? Yes, if the care will actually be delivered to you. Prepaid orthodontics or elective procedures that have not been delivered may be questioned.

Can I pay off my child's mortgage with my spend-down money? No. That is a gift to the child and triggers transfer penalty for the full amount.

My spouse and I both have life insurance. How does the cash-value rule work? The face-value threshold is per applicant. If the applicant's combined face value of all owned policies is over the SSI-aligned threshold, the cash value of all policies is countable. The community spouse's life insurance is governed separately by the CSRA.

What if I'm a few dollars over the resource limit on the application date? The application is denied. CDJFS will provide a notice; the applicant can spend down to the limit and reapply or appeal through Ohio's state-hearing process.

Can I do a Medicaid annuity to spend down? Yes, with a DRA-2005 compliant annuity that meets all the federal requirements (irrevocable, non-assignable, actuarially sound, equal periodic payments, state as remainder beneficiary, commercial issuer). Non-compliant annuities are treated as gifts. See the transfer-penalty lookback guide.

Last verified May 2026. Ohio's asset spend-down rules sit in the Ohio Administrative Code resource and burial provisions, with companion rules for annuities, retirement accounts, and transfer penalties. The current resource limit, CSRA band, federal home-equity cap, and penalty divisor are published on the ODM Medicaid Eligibility Procedure Letter (MEPL). Verify with the Ohio Department of Medicaid before making planning decisions. This article is for general information and does not constitute legal, financial, tax, or medical advice. Consult a licensed elder-law attorney for case-specific planning.

Find personalized help planning your Ohio Medicaid spend-down at brevy.com.