Ready to Plan for Long-Term Care Without Losing Everything?
Meet with a Certified Elder Law Attorney to coordinate DC Medicaid eligibility, asset protection, and estate-recovery planning.
Medicaid is the principal public benefit that pays for long-term care in a nursing home and, for eligible DC residents, care provided at home or in the community. Medicare covers medical care and limited rehabilitation. It does not provide continuing coverage for custodial long-term care.
DC Medicaid planning addresses two separate questions: whether the applicant qualifies for benefits and whether the applicant’s property will be exposed to estate recovery after death. A complete plan must address both.
This guide explains the 2026 DC income and resource rules, treatment of the home and retirement accounts, the five-year look-back period, crisis planning, advance planning, and estate recovery.
DC Medicaid pays for long-term services and supports when a person meets the program’s medical and financial requirements. Covered care may include nursing-facility care and services delivered through a home-and-community-based program.
This becomes important when a person requires continuing assistance with activities such as bathing, dressing, eating, toileting, transferring, or managing a cognitive impairment. Nursing-home care in the District commonly costs more than $13,000 per month, and extensive home care can be equally expensive.
Medicare and Medicare Advantage may cover a limited period of skilled rehabilitation following a qualifying hospitalization. They do not replace Medicaid or private payment for ongoing custodial care.
An applicant must be a District resident, have qualifying citizenship or immigration status, meet DC’s medical level-of-care standard, and satisfy the applicable income and resource rules.
Medical eligibility is based on the applicant’s functional and cognitive needs. The assessment examines the person’s need for assistance with activities of daily living and whether the person requires the level of care provided in a nursing facility or through the applicable home-and-community-based program.
Financial eligibility is a separate calculation. DC distinguishes between income received during the month and resources owned or retained by the applicant. It also excludes important assets that many families incorrectly assume must be spent before Medicaid will pay for care.
For 2026, DC applies the following basic financial standards for long-term-care Medicaid:
The Special Income Standard is $2,982 per month, equal to 300% of the federal Supplemental Security Income benefit rate. An applicant with income above that amount can qualify through DC’s medically needy spend-down pathway when qualifying medical expenses reduce countable income to the medically needy level.
The resource limit is $4,000 for one person or $6,000 for a married couple before application of the community-spouse rules.
When one spouse receives institutional long-term care and the other remains in the community, the federal spousal-impoverishment rules protect additional resources and income for the spouse at home. For 2026, the maximum Community Spouse Resource Allowance is $162,660.
These are limits on countable property—not limits on everything the applicant owns.
DC Medicaid does not count every asset when determining eligibility.
DC does not count an applicant’s IRA, Thrift Savings Plan, 401(k), or similar retirement account as a resource. Distributions from the account count as income. A retirement account should not be liquidated merely to obtain Medicaid eligibility because liquidation can create taxable income and convert protected retirement funds into countable cash.
Checking accounts, savings accounts, certificates of deposit, stocks, bonds, brokerage accounts, and non-home real estate generally count and must be reduced to the applicable resource limit.
DC currently uses the higher federal home-equity limit. In 2026, a principal residence may have as much as $1,130,000 in equity without preventing eligibility for Medicaid long-term-care benefits.
Effective January 1, 2028, the One Big Beautiful Bill Act requires DC to reduce that protection to a nationwide maximum of $1 million for a non-agricultural principal residence. The new $1 million ceiling will not increase with inflation. This change is especially important in the District, where a person can own a valuable home while having little income or other property.
The home-equity limit does not apply while the home is occupied by the applicant’s spouse, a child younger than 21, or a blind or disabled child. A demonstrated-hardship waiver is also available.
DC also excludes one vehicle, ordinary household goods and personal effects, and qualifying burial arrangements.
DC reviews transfers made during the five years before an application for Medicaid long-term-care benefits. A gift or transfer for less than fair market value can create a penalty period during which the applicant otherwise qualifies but Medicaid will not pay for long-term care.
The five-year rule does not prohibit every transfer. Transfers to a spouse and certain transfers involving a disabled child, caregiver child, or qualifying sibling are protected when the statutory requirements are satisfied.
The danger of an unplanned gift is timing. The penalty is imposed when the applicant needs care and may no longer have the transferred money available to pay for it. Gifts, transfers to trusts, changes in title, and payments to family caregivers must therefore be completed under a documented Medicaid plan.
A person who does not expect to need long-term care for at least five years can transfer appropriate assets to a Medicaid asset-protection trust. The applicant cannot remain the lifetime beneficiary of the transferred principal. After the five-year period, properly transferred trust property is not counted for Medicaid eligibility and is protected from estate recovery.
The trust can be structured as a grantor trust so that the transferred property remains eligible for a basis adjustment at death. Signing the trust is not enough: the home, investment account, or other property must actually be transferred to it.
A person who already needs care cannot solve the immediate problem by funding a new trust and waiting five years. Crisis planning uses permitted spend-down transactions, exempt-property purchases, spousal protections, properly documented caregiver agreements, pooled special-needs trusts, and other Medicaid-compliant strategies.
DC recovers Medicaid benefits from property in the recipient’s probate estate. Property properly titled in and retained by a revocable living trust is not part of the probate estate and is not subject to DC Medicaid estate recovery. The same is true of property passing outside probate through survivorship ownership or a valid beneficiary designation.
A home can therefore be noncountable during life but still exposed to recovery if it remains in the recipient’s probate estate at death. Eligibility planning and probate-avoidance planning must be completed together.
Yes. DC does not count these retirement accounts as resources. Distributions count as income.
In 2026, a single applicant may retain $4,000 in countable resources in addition to excluded property.
Not when it is the principal residence and the applicant’s equity is within the applicable limit. DC’s 2026 limit is $1,130,000. Beginning January 1, 2028, OBBBA imposes a frozen $1 million maximum for non-agricultural homes.
Yes, if it becomes part of the Medicaid recipient’s probate estate. A home properly held in a revocable living trust avoids probate and DC Medicaid estate recovery.
A transfer for less than fair market value during the five-year look-back period can create a period of ineligibility. Do not make gifts without calculating the Medicaid consequences.
No. A newly funded Medicaid asset-protection trust is an advance-planning strategy subject to the five-year look-back period. Immediate eligibility requires crisis-planning strategies.
Yes. The community-spouse rules protect additional assets and income for the spouse who remains at home.
Before care is needed. Advance planning creates the greatest opportunity to protect the home and other property. Crisis planning remains available when care is already required, but the available strategies are different.
Medicaid planning is not simply an eligibility application. It must coordinate long-term-care benefits with the client’s home, retirement accounts, income, taxes, trusts, powers of attorney, beneficiary designations, and estate-recovery exposure.
David Jonathan Taylor is a NELF Certified Elder Law Attorney (CELA) and the current Chapter President of the Maryland/DC Chapter of the National Academy of Elder Law Attorneys. Right Size Law uses trust-based planning to address both eligibility during life and protection of the client’s estate after death.
Each recommendation is tied to the actual DC rules and the client’s assets. The objective is a comprehensive plan that provides access to care while preserving the client’s choices and protecting property to the extent allowed by law.
A DC Medicaid planning appointment begins with a review of the person’s health, expected care needs, income, resources, home equity, retirement accounts, existing trusts, powers of attorney, and beneficiary designations.
We then identify whether the matter requires advance planning, crisis planning, or both, and explain the steps needed to qualify for benefits and protect property from estate recovery.
Meet with a Certified Elder Law Attorney to coordinate DC Medicaid eligibility, asset protection, and estate-recovery planning.