Medicaid Spend-Down in Anne Arundel County, Maryland (2026)

Five Files, Not One

A Maryland long-term-care application requires a financial determination and a separate functional determination. A federal or military retiree’s file adds three more sources of records, and each one runs on its own timeline.

The five files are: the county file at the Anne Arundel County Department of Social Services in Glen Burnie; the OPM file, covering Federal Employees’ Group Life Insurance and federal annuity records; the VA file, covering Servicemembers’ and Veterans’ Group Life Insurance and any VA pension benefit; the DFAS file, covering military retired pay and the Survivor Benefit Plan; and the carrier file, covering any privately owned policies. Each section below handles one.

Two items belong on day one regardless. First, authority: a bank, OPM, the VA and a life insurance carrier will each decline to release information to an adult child without documented authority. Read the actual durable power of attorney if one exists, and read it for scope — many older Maryland powers of attorney are too narrow to cover insurance transactions. Note that federal agencies sometimes have their own forms and requirements for third-party representation, so ask each one what it accepts. If a parent has cognitive impairment and no valid power of attorney, correcting that requires a guardianship proceeding in the Anne Arundel County Circuit Court, which takes months.

Second, the free local resources: the Anne Arundel County Department of Aging and Disabilities in Annapolis is the county’s Area Agency on Aging and can help with options counseling and referral at no charge, and Maryland’s State Health Insurance Assistance Program, administered through the Maryland Department of Aging, provides free Medicare and coverage counseling from counselors who are not paid by insurers. For anything involving VA benefits, an accredited veterans service officer is the right free resource and is more reliable than a general elder-care advisor.

The County File: Glen Burnie

Ask the Anne Arundel County Department of Social Services for the current long-term-care application packet and the verification checklist it uses. Then ask four specific questions and write down the answers: the current countable-resource limit, the current spousal resource allowance, the current transfer penalty divisor, and the current personal needs allowance retained by a resident after approval.

Maryland’s individual resource limit has been $2,500 rather than the more common $2,000, which sounds like a technicality and is not — it is an extra $500 of room, and in a case that comes down to a small certificate of deposit it can matter. Verify the current figure. Our summary of Maryland asset and income limits tracks the published figures.

On the income side, Maryland’s treatment differs from the hard-cap-plus-Miller-trust model used in states like Florida and Alabama. Maryland operates a medically needy structure for some categories, which can mean a monthly spend-down obligation rather than flat ineligibility. Ask the department directly which mechanism applies to your parent’s coverage group and, if a spend-down amount applies, exactly how it is calculated, met and documented each month. Do not import the answer from another state.

The county also handles the property questions. Bring the deed, the current assessment, a mortgage payoff statement and documentation of any home equity line. A primary residence occupied by the applicant, a spouse, or certain dependent relatives is generally excluded, subject to a federal home-equity cap where no spouse or dependent relative lives there. Anne Arundel County median home values have run in the rough band of $430,000 to $490,000 as of 2026, generally inside that cap — though waterfront property along the South and Severn rivers can be worth multiples of the county median, which puts the cap in play. Get a real valuation rather than the assessment.

Finally, ask the county how the functional assessment is scheduled and who performs it, and start that process the same week you start requesting records. A perfect financial file with no completed assessment is not an approval.

The OPM File: FEGLI and the Reduction Nobody Reads

Ask the Office of Personnel Management for a written statement of the retiree’s current Federal Employees’ Group Life Insurance coverage: which components are in force, the current amount of each, the reduction election made at retirement, and the current premium being withheld.

Here is the thing families in this county consistently get wrong. FEGLI Basic coverage does not stay level after 65 under the most common election. A retiree choosing the 75 percent reduction sees the Basic benefit reduce by two percent per month beginning at age 65 until it reaches 25 percent of the original amount, at which point it stays there at no further cost. Option B multiples can similarly be elected with full reduction, dropping to zero over a period of months beginning at 65, or with no reduction at a premium that becomes very expensive at advanced ages.

So a family that has been assuming a $90,000 federal death benefit may be looking at $22,500 — a contractual outcome elected decades ago and forgotten. Get the written statement before you plan anything around the number. Our page on FEGLI premiums in retirement covers how the elections play out.

Now the Medicaid treatment, which is more favorable than families expect. FEGLI is group term insurance with no cash surrender value. That means it generally does not create a countable resource at all, whatever the face amount. It also means it is generally not a secondary-market candidate: there is no cash value to capture, the benefit reduces after 65 under most elections, and while FEGLI regulations do permit an irrevocable assignment of ownership — which is the mechanism any transfer would have to use — that does not conjure a buyer. Our page on whether FEGLI can be sold covers the practical answer. Confirm anything specific about assignment with OPM directly.

The useful action here is not a transaction. It is knowing the real number, so the family does not liquidate a private policy on the assumption that a large federal benefit is standing behind it.

The VA File: VGLI Deadlines and Aid and Attendance

Two entirely separate things live in this file, and both have deadlines.

SGLI and VGLI. Servicemembers’ Group Life Insurance converts to Veterans’ Group Life Insurance after separation, and the window is limited — an application is generally due within one year and 120 days of separation, with a shorter initial period in which no health review applies. For a retiree who separated decades ago, that window is long closed, so the question becomes whether VGLI is currently in force and at what premium. VGLI is renewable group term with no cash value, so it generally creates no countable resource. Premiums rise in age brackets and become very expensive at advanced ages, which is why VGLI lapses are common at exactly the point a family would most want the coverage. VGLI also carries a privilege to convert to an individual commercial policy at a participating company — a right worth knowing about before letting it lapse. Our overview of SGLI and VGLI conversion options covers the mechanics; confirm current rules with the VA.

Aid and Attendance. This is a pension enhancement for wartime veterans and surviving spouses who need help with daily activities, and it operates on a completely different track from Medicaid. It has its own net worth limit — a single combined figure that is adjusted annually and has recently sat in the neighborhood of $155,000 to $160,000 — and its own look-back, which is three years rather than Medicaid’s five, with its own penalty rules for asset transfers. Our page on the Aid and Attendance asset test covers the framework.

Why that matters in this county specifically: a great many Anne Arundel households qualify for Aid and Attendance well before they would qualify for Medicaid, and the benefit can help fund assisted living during the years Medicaid will not pay for it. The two programs count assets differently and the shorter VA look-back means the timing of transfers has different consequences under each. Do not let anyone plan for one while ignoring the other. An accredited veterans service officer will help at no cost, and Maryland has a substantial network of them.

Coverage	Cash value?	Countable resource?	Realistically sellable?	The deadline or election that matters
FEGLI Basic	No — group term	Generally no	No; assignment of ownership is permitted but there is no value to capture	The reduction election made at retirement; Basic reduces from age 65 under the 75% reduction
FEGLI Option B multiples	No	Generally no	No	Full reduction versus no reduction; full reduction drops coverage to zero over months from 65
VGLI	No — renewable group term	Generally no	No	Premiums rise in age brackets; a conversion privilege to an individual policy exists
SGLI (still serving)	No	Generally no	No	Conversion to VGLI generally due within one year and 120 days of separation
Survivor Benefit Plan	Not insurance — an annuity	Income to the survivor, not a resource	No	Whether it was elected, at what base amount, and whether a former spouse holds it
Privately owned whole or universal life	Yes	Yes, once total face value crosses the threshold	Sometimes, if face amount, age and health support it	Compare surrender, reduced paid-up, funeral assignment and a market review
Privately owned convertible term	No	Generally no	Only after conversion	The conversion rider deadline, which often expires years before the term does

The DFAS File: Retired Pay and the Survivor Benefit Plan

Ask the Defense Finance and Accounting Service for a current Retiree Account Statement, and for confirmation of whether the Survivor Benefit Plan is elected and at what base amount.

Military retired pay is income, not a resource, and it drives two calculations: whether an income spend-down obligation applies, and how much of the resident’s monthly income goes to the facility as patient liability after approval. VA compensation and pension benefits have their own treatment rules that differ from retired pay — ask the county exactly how each stream is counted, because getting this wrong on the application produces a wrong determination that then has to be appealed.

The Survivor Benefit Plan deserves specific attention when a family is deciding what to do with a life insurance policy. SBP provides a monthly annuity to a surviving spouse, funded by premiums deducted from retired pay during the retiree’s life. Where SBP is elected, a surviving spouse in Severna Park or Odenton may already have a guaranteed lifetime income stream — which changes the answer to the question of whether she needs the death benefit from a privately owned policy. Where SBP was declined, or where a former spouse holds the SBP interest from an earlier marriage, the current spouse may have far less protection than the family assumes.

So get the answer in writing before touching any policy. A family that surrenders a private policy because “there’s SBP” and then discovers SBP was never elected has made an irreversible mistake.

Two related documents to pull while you are at it: any divorce decree affecting retired pay or SBP, since court-ordered divisions of military benefits are common and binding; and the current TRICARE status, which affects what medical costs the household actually faces and therefore what a spend-down obligation can be met with.

The Carrier File: Privately Owned Policies

Now the ordinary insurance file, which in this county is often the smallest part of the picture and the only part that creates a countable resource.

Request in writing from each carrier: a current statement of cash surrender value net of any outstanding loan, an in-force illustration, the face amount, and the current owner and beneficiary of record. Expect two to four weeks.

The counting rule has two steps and the first looks at face value rather than cash value. Add up the total face amount of all policies covering the same insured — and note that federal group coverage generally belongs in this calculation as face amount even though it contributes no cash value, so ask the county how it treats FEGLI and VGLI face amounts in the aggregation test. If the aggregate sits at or below a small threshold, commonly $1,500 with state variation, the policies are excluded and no cash value counts. Cross the threshold and the full net cash surrender value of every policy that has one becomes a countable resource. Our page on how a policy counts as a Medicaid asset works through both steps.

That interaction is the specifically federal wrinkle on this page, and it is worth asking about rather than assuming: a retiree whose only coverage is a large FEGLI benefit has substantial face amount and zero cash value, and how the aggregation test applies to that combination should come from the county in writing.

Where a private policy does have net cash value, there are four exits and they are not interchangeable. Surrender produces cash that then has to be spent down. A reduced paid-up election converts existing cash value into a smaller permanent policy with no further premiums due. An irrevocable assignment to a funeral provider, or an irrevocable funeral trust, can move value inside the burial exclusion instead of out of the family. A sale in the licensed secondary market applies where the policy qualifies on face amount, age and health; federal GAO research found sellers typically received a modest fraction of face value but several times cash surrender value. Maryland regulates the transaction itself through the Maryland Insurance Administration, and the choice among the four belongs with a Maryland elder law attorney.

The Sixty-Month File: Records Across Duty Stations

Ask every bank and credit union for complete monthly statements covering the past sixty months on every account the applicant held or was a signer on, including accounts closed during that period. Start with the closed accounts, which take the longest.

The look-back is why. Any transfer of assets for less than fair market value inside that window can create a penalty period during which Maryland Medical Assistance will not pay for long-term-care services, computed by dividing the uncompensated value by a state-published average private-pay rate. Ask the county for the current divisor. Our general spend-down guide explains how penalties are computed and when they begin.

The military-career complication is documentation across geography. A retiree who moved eight times in a career, banked at institutions near successive duty stations, and consolidated accounts on retirement may have a five-year window that touches two or three states and a credit union that no longer exists under its original name. Some of those institutions merged; ask the surviving institution for archived records. If a household sold a house at a previous duty station inside the window, get the closing statement.

Two transfer patterns recur in Anne Arundel County. Helping an adult child with a down payment near Fort Meade — a transfer, valued at the full amount, if it left the parent’s control inside the window. And paying a family member for care, which is treated as an uncompensated transfer unless there is a written personal care agreement signed before the payments began, at a documented market rate, with the caregiver reporting the income. Drafted afterward it generally does not help.

Remember also that VA Aid and Attendance runs a three-year look-back with its own penalty rules. A transfer that is outside the VA window may still be inside the Medicaid window, and a family pursuing both programs has two clocks running at different speeds. That is a reason to have both an accredited veterans service officer and a Maryland elder law attorney involved rather than one or the other.

What Care Costs Here, and What Maryland Recovers

Every week the packet is incomplete has a price. Cost-of-care surveys of the Genworth type have put a Maryland semi-private nursing facility room in the rough range of $11,000 to $13,000 per month as of 2026, with private rooms above that, and assisted living statewide roughly $4,900 to $6,000 — with Anne Arundel County communities frequently at the upper end, plausibly $5,500 to $7,000. Treat all of these as ranges, get a written rate sheet from the specific facility, and check its federal quality ratings on CMS Care Compare. Our companion page on nursing home costs in Anne Arundel County separates the levels of care.

Divide. A household with $220,000 in reachable assets has roughly eighteen months of skilled nursing at Maryland rates, or about three years of assisted living — and if Aid and Attendance is available, the assisted living runway can be meaningfully longer, which is the practical argument for pursuing both programs rather than one.

Then estate recovery. Federal law requires every state to operate a Medicaid Estate Recovery Program, and Maryland does; after the death of a recipient who received long-term-care services at age 55 or older, the state may assert a claim against the estate for what it paid. At Maryland prices, two years of facility care runs past $280,000, which against a house worth $450,000 changes substantially what heirs receive. Recognized exceptions and hardship provisions generally exist for a surviving spouse, a minor or disabled child, and a sibling or caregiver child who lived in the home and meets specific conditions, and they turn entirely on facts. Ask the Maryland Department of Health what its current process and exemptions are, and put the specifics to a Maryland elder law attorney.

The last honest word on the policy question, because in this county the answer is unusually often “do nothing.” Leave a policy alone when it is FEGLI or VGLI, because group term with no cash value neither blocks eligibility nor attracts a buyer. Leave it alone when the face amount is small, since policies under roughly $100,000 of death benefit rarely draw an offer and a $10,000 policy usually does more good where it sits, often excluded outright and covering a funeral that would otherwise be paid in cash. Leave it alone when it is already irrevocably assigned to a funeral provider. Leave it alone when the insured is in good health for their age, because pricing runs on life-expectancy underwriting. Leave it alone when cash value is already a third or more of face, because surrender or a reduced paid-up election generally wins then. And leave it alone when a surviving spouse needs the death benefit — checking the Survivor Benefit Plan status first is what tells you whether she does. If the only thing you want settled before an attorney meeting is whether a specific privately owned policy has any market value, a free review of the cover page and the latest annual statement answers it at no cost and with no obligation, including when the answer is that it does not.

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Frequently Asked Questions

Where does an Anne Arundel County family file for long-term-care Medicaid?

With the Anne Arundel County Department of Social Services in Glen Burnie, under Maryland Medical Assistance rules set by the Maryland Department of Health. A separate functional assessment is also required and runs on its own schedule. Ask the department for its current long-term-care packet and verification checklist before assembling anything.

Is Maryland’s asset limit really different?

Maryland’s countable-resource limit for a single applicant has been about $2,500 rather than the $2,000 most states use, plus a much larger protected allowance for a spouse still at home. That extra room can matter in a close case. Verify the current figures with the county department, since they are adjusted on the state’s own schedule.

Does FEGLI count against the asset limit?

FEGLI is group term insurance with no cash surrender value, so it generally does not create a countable resource whatever the face amount. Ask the county in writing how it treats FEGLI face amounts in the aggregation test that determines whether other policies are excluded, since face amount and cash value are treated differently in that two-step rule.

Why is my father’s federal death benefit smaller than we thought?

Because of the reduction election made at retirement. Under the common 75 percent reduction, FEGLI Basic reduces two percent per month starting at age 65 until it reaches 25 percent of the original amount. Option B can similarly reduce to zero over months from 65. Get a written statement from OPM before planning around any figure.

Can VGLI be sold to pay for care?

Generally no. VGLI is renewable group term with no cash value, so there is nothing for a buyer to acquire and it creates no countable resource either. What it does carry is a privilege to convert to an individual commercial policy at a participating company, which is worth investigating before letting it lapse as premiums rise.

How does VA Aid and Attendance interact with Medicaid?

They are separate programs with different tests. Aid and Attendance has its own combined net worth limit, adjusted annually and recently near $155,000 to $160,000, and a three-year look-back rather than Medicaid’s five. Many Anne Arundel families qualify for it well before Medicaid and can use it to fund assisted living. Use an accredited veterans service officer.

Should we check the Survivor Benefit Plan before touching a policy?

Yes, always. If SBP was elected, a surviving spouse may already have a guaranteed lifetime annuity, which changes whether she needs a private policy’s death benefit. If it was declined, or a former spouse holds it under a divorce decree, she may have far less protection than assumed. Get written confirmation from DFAS first.

Related Reading

• Nursing Home Costs Anne Arundel County Md
• Sell Life Insurance Policy Anne Arundel County Md
• Maryland Medicaid Asset Income Limits
• Life Settlement Licensing Maryland
• Sell Life Insurance Policy Frederick County Md
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset
• Can I Sell A Fegli Policy
• Sgli Vgli Conversion Options
• Fegli Retiree Premiums

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Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.