Medicaid Spend-Down in Chevy Chase, Maryland (2026)

Name the Jurisdiction Before You Name the Asset

Maryland Medicaid is state-supervised and locally administered. Financial eligibility for long-term care is determined through the local social services operation for the county of residence, which for Chevy Chase means Montgomery County, administered from Rockville. Montgomery County’s Aging and Disability Services unit functions as the county’s Area Agency on Aging and is the right first call for options counseling, caregiver support, and access to the county’s State Health Insurance Assistance Program counselors, who advise on Medicare and supplemental coverage at no charge under the Maryland Department of Aging’s program. For the insurance contract itself, and to verify licensing in any life settlement transaction, the regulator is the Maryland Insurance Administration.

The jurisdictional check is not pedantry. Chevy Chase Village, the Town of Chevy Chase, Chevy Chase Sections Three and Five, Chevy Chase View, Martin’s Additions, North Chevy Chase, and unincorporated Chevy Chase are all distinct Maryland municipalities or areas within Montgomery County; the D.C. Chevy Chase neighborhood is not in Maryland at all. Households straddling the line — a parent who moved from a D.C. house to a Maryland apartment, or vice versa, within the last year — need to establish residency clearly, because both jurisdictions will ask.

One structural advantage Maryland offers over several states covered elsewhere on this site: Maryland operates a medically needy pathway, so excess monthly income can generally be spent down on medical expenses rather than requiring a Qualified Income Trust the way hard income-cap states such as Florida and Texas do. Confirm the current mechanics with the county, but it means a Chevy Chase household with a substantial federal annuity is not automatically shut out on income the way it would be in Tampa or Temple.

Line One: Liquid Assets, Brokerage, and the Column That Fails First

Checking, savings, money market, certificates of deposit, and taxable brokerage accounts are countable at value, in full, with no exemption. This is the column that has to come down to roughly $2,500 for an unmarried applicant, and in Chevy Chase it is frequently the largest liquid item after retirement accounts.

Taxable brokerage holdings carry a complication that bank accounts do not: selling appreciated securities to spend down generates capital gains, and a household liquidating decades of appreciation in a single tax year can create a sizable federal and Maryland tax bill on top of the care costs. Sequencing sales across tax years, or spending from higher-basis lots first, is ordinary tax planning that saves real money here. That is a conversation for your CPA, and it should happen before the first sale, not after.

Joint accounts are the other trap. Maryland, like most states, generally treats funds an applicant can withdraw as available to the applicant in full, regardless of whose earnings went in. An adult child added to a parent’s account for convenience has created a pool that will be presumed to be the parent’s until the family proves otherwise with deposit records and account-opening documents. Unwinding it later looks like a transfer.

Spending this column down is expected and lawful, provided the direction is right. Money spent on the applicant — medical and dental care, hearing aids, home modifications, property taxes, paying the applicant’s own debts, an irrevocable funeral arrangement — reduces countable assets and creates no penalty. Money given to family is a transfer, reviewed across the 60 months before the application and converted into months of ineligibility.

Line Two: The Federal Annuity, the TSP, and the Survivor Election

This is the section that does not exist on a generic spend-down page and matters enormously in Montgomery County, where federal retirees are a large share of the older population.

A CSRS or FERS annuity is income, not a resource. It cannot be liquidated, so it is not counted as an asset — but it flows directly into the monthly cost-of-care calculation, and a long federal career can produce an annuity large enough to cover a substantial share of a nursing facility bill on its own. That is not a bad outcome; it means less of the household’s savings goes to care.

The Thrift Savings Plan is different, and it is where families get inconsistent answers. Whether a TSP balance is treated as an available resource or as an income stream depends on its status — whether it is accessible, whether it has been annuitized, and whether required distributions have begun. The treatment materially changes the answer, sometimes by six figures. Get the state’s position in writing from the county and confirm it with a Maryland elder law attorney rather than relying on what a coworker’s family experienced.

Then the survivor election, which is the quiet hinge of the whole plan. A federal retiree who elected a survivor annuity at retirement has already bought their spouse an income stream that continues after death, which often means the household needs less life insurance than they think. A retiree who declined the survivor election — or one who remarried and never made a post-retirement election — has left the surviving spouse exposed, and in that case a life insurance death benefit may be the only replacement for a large share of household income. Find out which situation you are in before you decide anything about a policy. Request the annuity statement and the survivor election documentation from OPM.

Line Three: The House, and Maryland’s Lower Equity Limit

The primary residence is generally excluded while the applicant lives there, states an intent to return, or while a spouse or dependent, blind, or disabled child lawfully resides in it. But federal law caps how much home equity can be protected, states choose between a lower and a higher figure within a federal band, and Maryland has used the lower of the two — in the neighborhood of $730,000 to $750,000 in recent years, indexed annually. Confirm the 2026 Maryland figure with the county.

Read that against Chevy Chase, where median single-family home values run well above a million dollars and in the older villages considerably higher. Maryland’s use of the lower limit — several hundred thousand dollars below what Massachusetts and New York protect — means a widowed Chevy Chase homeowner living alone can be over the equity ceiling by a wide margin. Where a spouse or a disabled or minor child lawfully lives in the home, the equity limit generally does not apply at all, and for married couples that exception usually resolves the issue. For a single homeowner it does not.

Maryland also pursues estate recovery after death through the state health department. The residence exclusion protects the home during life; it does nothing to prevent a claim against the estate later. And the instinct to deed the house to the children is a transfer for less than fair market value that produces penalty months, typically destroys the stepped-up basis the heirs would have received — a very costly loss on a property with forty years of Montgomery County appreciation — and exposes the home to the children’s creditors. Legitimate structures exist in Maryland; all of them are attorney work done years in advance.

Asset Class	General Maryland Treatment	Chevy Chase Note
Countable asset limit, single (2026, verify)	Roughly $2,500	Higher than the $2,000 most states use
Checking, savings, CDs, brokerage	Countable at value	Liquidating appreciated stock triggers capital gains
CSRS / FERS annuity	Income, not a resource	Can cover much of a monthly bill on its own
Thrift Savings Plan	Depends on accessibility and distribution status	Get the county’s position in writing
Survivor annuity election	Not an asset; changes how much insurance is needed	Request the election documents from OPM
Primary residence	Excluded during life, subject to the home equity limit	Maryland uses the LOWER limit, roughly $730,000-$750,000 – verify
Second / rental property	Countable at equity value	Slow to value and sell; identify early
Deferred annuity	Countable at surrender value	Immediate annuities must meet strict federal tests
Irrevocable funeral arrangement	Generally excluded	Cheapest legitimate spend-down available
FEGLI (group term)	No cash value, but face amount counts in the aggregation test	Can flip a small whole life policy into a countable asset
DC suburban semi-private nursing room	~$12,000-$14,000/month (2026 range)	Above the Maryland median
Chevy Chase / Bethesda assisted living	~$7,000-$9,000/month (2026 range)	Far above the Maryland median

Line Four: IRAs, Annuities, and Rental Property

Private retirement accounts follow the same uncertainty as the TSP: treatment depends on accessibility and distribution status, and it varies by state and account type. Ask the county for its written position. Do not assume an IRA is protected because someone said retirement accounts are exempt; in many states they are not.

Commercial annuities split two ways. A deferred annuity with an accessible surrender value is generally countable at that value. An immediate annuity can convert countable savings into a non-countable income stream, but only if it meets strict federal requirements — irrevocable, non-assignable, actuarially sound, level payments, with the state named as remainder beneficiary in the required position. An annuity bought without those features is simply a penalized transfer with extra paperwork, and annuities are sold to families in exactly this situation all the time.

Rental or income-producing real estate is countable at equity value unless it fits a narrow self-support exception. In a market where a Bethesda or Silver Spring rental property can carry several hundred thousand dollars of equity, expect it to be counted, and expect requests for leases, tax returns, and a valuation. If the household owns a second property, identify it now; these take months to value and longer to sell.

Line Five: Burial Assets, and the Cheapest Legitimate Move on the Board

A designated burial fund is excluded up to a modest limit, and separately an irrevocable prepaid funeral or burial arrangement is generally excluded, provided it is genuinely irrevocable and within what Maryland permits. Burial space items — a plot, a vault, a marker, opening and closing costs — are typically excluded in addition to the burial fund.

Funding an irrevocable funeral arrangement is spending on the applicant, not a transfer to anyone else. It reduces countable assets, produces no penalty period, and eliminates a several-thousand-dollar expense the family would otherwise pay in cash at the worst moment. Revocable prepaid plans generally stay countable, so get a written statement from the provider that the contract is irrevocable and ask the county for Maryland’s current limits.

For a household $9,000 over the $2,500 limit, this one step plus a dental bill and a set of hearing aids can do most of the work legitimately. It is the least glamorous item in this guide and the one most often left on the table.

Line Six: Life Insurance, Including FEGLI

Life insurance is counted through the face-value aggregation rule. Maryland, like most states, adds together the total face value of every policy the applicant owns; if the combined face value sits at or below the small-policy threshold — historically $1,500 of total face value nationally, a figure to confirm for Maryland as of 2026 — every policy is disregarded. Above the threshold, the cash surrender value of each permanent policy becomes countable against the roughly $2,500 limit. Term insurance normally has no cash surrender value and so counts as nothing itself, but its face amount is added into the aggregation test. Our full treatment is at how life insurance counts as a Medicaid asset.

Here is the Montgomery County-specific consequence. Federal Employees’ Group Life Insurance — FEGLI — is group term coverage with no cash value. A retiree carrying FEGLI Basic plus Option B multiples can easily hold several hundred thousand dollars of face amount. That face amount, on its own, blows past the small-policy threshold and therefore turns a modest paid-up whole life policy bought in 1985 from fully exempt into fully countable. The FEGLI itself adds no countable value; it changes how everything else is treated. Almost no family discovers this until a caseworker asks.

Two FEGLI features are worth investigating with OPM directly rather than with an insurance agent, because FEGLI is administered under OPM rules rather than an ordinary carrier contract. OPM permits irrevocable assignment of FEGLI Basic coverage in defined circumstances, and FEGLI offers a Living Benefits option that pays an accelerated lump sum to an insured with a terminal prognosis. Both have specific eligibility conditions and both are irreversible. Confirm current rules and forms with OPM before assuming either path is open, and note that FEGLI premiums for retirees can rise steeply with age depending on the reduction election made at retirement — which is often the real reason a family is looking at this at all.

For private policies, four options exist and surrender is only one. Keep it if a beneficiary genuinely needs the benefit and the premium is affordable. Elect reduced paid-up coverage to end premiums while retaining a smaller guaranteed death benefit with no new underwriting. Fund an irrevocable funeral arrangement. Or have the contract reviewed for secondary-market value: the federal GAO study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value and several multiples of cash surrender value. Term coverage is a special case — generally saleable only if it can still be converted to permanent insurance, which is covered in selling a term life policy.

When selling is the wrong answer: face amounts under roughly $100,000 rarely draw offers; a policy already irrevocably assigned to burial is already exempt; a healthy insured will not attract meaningful pricing because offers track life expectancy; and a surviving spouse who was left without a federal survivor annuity may need the death benefit more than the household needs cash today.

What Care Costs Here, and the Order to Work In

Montgomery County is one of the most expensive long-term-care markets in the United States. Cost-of-care survey ranges of the Genworth type place the Maryland median semi-private skilled nursing room in the rough range of $11,000 to $12,500 a month as of 2026, with private rooms commonly $13,500 to $15,500. The Washington suburban market, including Chevy Chase and Bethesda, prices above the state median — a working range of roughly $12,000 to $14,000 for a semi-private room. Assisted living is where the gap is widest: one-bedroom assisted living in the Chevy Chase and Bethesda corridor commonly runs roughly $7,000 to $9,000 a month, against a Maryland median closer to $5,500 to $6,500, with memory care higher again.

These are survey ranges. Get each facility’s written private-pay rate, ask what triggers an increase, and ask whether the facility holds Medical Assistance-certified beds and will retain a resident who converts from private pay mid-stay. Chevy Chase families do have unusually good supply and choice along the Wisconsin Avenue and Rockville Pike corridor, minutes from major hospitals, and choice is leverage on both price and the conversion question. For the runway arithmetic, see nursing home costs in Chevy Chase.

Then work in this order. Sort the balance sheet into countable and exempt before you spend a dollar. Pull 60 months of statements on every account, including closed ones, and list every transfer including debts paid on someone else’s behalf. Request the OPM annuity statement, the survivor election documentation, the TSP balance and distribution status, and the FEGLI coverage summary. Get carrier letters stating cash surrender value for each permanent policy. Ask the county for the current asset limit, home equity limit, and burial limits, and for its written position on TSP and IRA treatment. Then decide what to spend, restructure, or sell — with a Maryland elder law attorney and your CPA involved before any money or any deed moves.

If the policy question is what brought you here, life settlements in Chevy Chase covers it directly. For a free, no-obligation review of what a policy is actually worth, send the cover page and current premium notice or call (305) 209-7183. If the answer is that it has no market value, you will be told plainly.

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Frequently Asked Questions

Which county is Chevy Chase, Maryland in, and where do I apply?

Montgomery County. Maryland Medical Assistance is state-supervised and locally administered, so the long-term-care application goes through Montgomery County’s social services operation, administered from Rockville, the county seat. If the address is in the Chevy Chase neighborhood of Washington, D.C. instead, that is the D.C. Medicaid program entirely.

Is Maryland’s asset limit really $2,500?

Maryland has used roughly $2,500 for an unmarried applicant, modestly above the $2,000 figure most states use. Verify the current number with the county for 2026. A married couple with one spouse applying is handled under separate community-spouse resource rules that protect a much larger share of joint assets.

Does my father’s federal pension disqualify him?

A CSRS or FERS annuity is income rather than a countable resource, so it does not blow the asset test. It does flow into the monthly cost-of-care calculation. Maryland operates a medically needy pathway, so excess income can generally be spent down on medical expenses rather than requiring the income trust that hard income-cap states demand.

How does FEGLI affect Medicaid eligibility?

FEGLI is group term coverage with no cash surrender value, so it adds nothing countable by itself. But its face amount counts toward the aggregation test that decides whether permanent policies count, and a retiree carrying Basic plus Option B multiples easily exceeds the small-policy threshold. That can turn an old whole life policy from exempt into countable.

Can a Chevy Chase house be too valuable for Medicaid?

Yes, and Maryland’s exposure is worse than some states’ because Maryland has used the lower of the two federally permitted home equity limits, in the neighborhood of $730,000 to $750,000 in recent years. Median Chevy Chase values run well above that. The limit generally does not apply if a spouse or a disabled or minor child lawfully lives in the home.

What does assisted living cost in Chevy Chase?

As of 2026, survey ranges put one-bedroom assisted living in the Chevy Chase and Bethesda corridor at roughly $7,000 to $9,000 a month, well above the Maryland median of about $5,500 to $6,500, with memory care higher. Semi-private skilled nursing runs roughly $12,000 to $14,000. Get each facility’s written rate rather than relying on survey figures.

Related Reading

• Nursing Home Costs Chevy Chase Md
• Life Settlements Chevy Chase Md
• Maryland Medicaid Asset Income Limits
• Life Settlement Licensing Maryland
• Life Settlement Taxes Maryland
• Sell Life Insurance Policy Anne Arundel County Md
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset
• Sell Term Life Policy

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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.