To qualify for long-term care Medicaid in Florida, a single applicant generally must have no more than $2,000 in countable assets, and the process of legally reducing assets to that level is what families call spend-down. In the Tampa-St. Petersburg area, that means Hillsborough, Pinellas, Pasco and Hernando county residents working through the same $2,000 number, with the same 60-month look-back on transfers.
Florida has the highest share of residents 65 or older in the country, roughly 21%, plus a very large snowbird and second-home retiree base. That combination makes Tampa Bay one of the busiest long-term care Medicaid markets anywhere, and it also means a lot of applicants own assets in more than one state.
This page walks through what counts, what does not, which spend-down moves are legitimate, and why an old life insurance policy is so often the thing that stops an application cold.
In This Article
- The Program and the Number
- Countable Versus Exempt
- The Life Insurance Rule That Blocks Applications
- Selling Is a Sale. Gifting Is a Gift.
- Legitimate Spend-Down Moves
- Snowbirds, Second Homes and Out-of-State Assets
- Applying in Hillsborough, Pinellas, Pasco and Hernando
- Free Policy Review
- Frequently Asked Questions
The Program and the Number
Florida delivers long-term care Medicaid through Statewide Medicaid Managed Care Long-Term Care, usually written as SMMC LTC. It covers nursing facility care and a range of home and community-based services for people who meet both a medical level-of-care standard and the financial rules.
The financial rule that dominates planning is the countable asset limit: $2,000 for a single applicant in 2026. Verify the current figure with the agency handling the application, since these numbers are periodically adjusted. Married couples have a separate and more generous framework built around the community spouse resource allowance.
Countable Versus Exempt
Countable assets are the ones that must come down to the limit: bank accounts, investments, second properties, certificates of deposit and the cash surrender value of life insurance above the disregard threshold.
Exempt assets typically include the primary residence within the applicable equity limit and subject to intent-to-return rules, one vehicle, personal belongings and household goods, and irrevocable funeral arrangements. Exempt does not mean invisible: the estate recovery program can reach certain assets after death, so exemption during life is not the whole story.
The Life Insurance Rule That Blocks Applications
Here is the rule that surprises almost everyone. Life insurance is disregarded only when the total face value across all policies is $1,500 or less. Cross that threshold and the cash surrender value of the policies becomes a countable resource.
Note what is being measured. The $1,500 test looks at face value, but what gets counted is cash value. A $150,000 whole life policy with $28,000 of cash value puts $28,000 squarely on the countable side of the ledger, which is fourteen times the entire $2,000 limit. One forgotten policy can be the whole problem.
The reflexive response is to surrender the policy. That is often the most expensive available choice, because surrender value on an older permanent policy is frequently a small fraction of what the secondary market would pay for the same contract.
Selling Is a Sale. Gifting Is a Gift.
The federal look-back is 60 months for transfers made for less than fair market value. Signing a policy over to an adult child is precisely such a transfer, and it can generate a penalty period during which Medicaid will not pay, calculated from the value given away.
Selling the same policy to a licensed buyer at fair market value is a different transaction entirely. The applicant receives value in exchange, so there is generally no transfer penalty; the proceeds simply become cash, which is countable and must then be spent down through permitted means.
Keep every document: the offer, the settlement contract, escrow records and the deposit. When a caseworker asks what happened to the policy, a complete file answers it in one pass.
| Asset | Countable in Florida? | Notes for 2026 |
|---|---|---|
| Checking and savings | Yes | Counts against the $2,000 single-applicant limit |
| Primary residence | Generally exempt | Subject to equity limits and intent-to-return rules |
| One vehicle | Generally exempt | Additional vehicles are countable |
| Life insurance cash value | Yes, if total face value exceeds $1,500 | The disregard tests face value; the count uses cash value |
| Irrevocable funeral trust | Generally exempt | Must be irrevocable and within limits |
| Second property or out-of-state real estate | Yes | Disclosed and counted regardless of location |
| Proceeds from selling a policy | Yes, as cash | A sale at fair value is not a gift; proceeds still must be spent down |
Legitimate Spend-Down Moves
Spend-down does not mean wasting money. It means converting countable assets into exempt assets or paying legitimate obligations. Irrevocable funeral trusts and prepaid burial contracts pay for something the family will face regardless. Home repairs and accessibility modifications, a roof, a walk-in shower, a ramp, widened doorways, turn cash into a safer, more livable house that stays exempt.
Replacing an unreliable vehicle, paying off debt, and a properly drafted caregiver agreement with a family member who is genuinely providing care can all be legitimate. So can a spousal resource transfer up to the community spouse resource allowance.
Each of these has strict requirements, and a caregiver agreement in particular must be in writing, at a reasonable rate, and for services actually rendered going forward. Do not attempt any of them without a Florida elder law attorney.
Snowbirds, Second Homes and Out-of-State Assets
Tampa Bay’s retiree base includes a great many households that still own property up north, keep a bank account in their former state, or split the year. All of it is disclosed. Countable assets are counted regardless of which state they sit in.
Residency also determines which state’s Medicaid program applies and which state’s rules govern a life settlement transaction. Sort residency out early, before an application is filed, rather than after a caseworker raises it.
Applying in Hillsborough, Pinellas, Pasco and Hernando
Applications for Tampa Bay residents are handled through the county and regional offices serving Hillsborough, Pinellas, Pasco and Hernando counties. Timelines depend heavily on how complete the packet is when it arrives.
Gather the file first: identification, proof of income, five years of bank statements, deeds, insurance policies and documentation for anything sold or transferred in the last 60 months. Incomplete applications are the leading cause of multi-month delays, and every delayed month is typically a privately paid month.
Free Policy Review
If a policy is part of the picture, find out what it is worth before anyone surrenders it. Send the policy cover page for a free, no-obligation review.
Pine Lake Life Solutions reviews policies with $100,000 or more in death benefit and typically pays more than cash surrender value. Call (305) 209-7183.
This page is educational only and is not legal, tax or investment advice. Medicaid limits and rules change; verify every figure with the agency handling the application and work with a licensed Florida elder law attorney before acting.
Frequently Asked Questions
What is the Florida Medicaid asset limit in 2026?
Generally $2,000 in countable assets for a single applicant seeking long-term care coverage through SMMC LTC. Married couples are handled under a separate framework built around the community spouse resource allowance. Verify the current figure with the office handling the application.
Why does my mother’s life insurance policy count?
Life insurance is disregarded only when total face value across all policies is $1,500 or less. Above that, the cash surrender value becomes a countable resource. A modest policy with real cash value can therefore exceed the entire asset limit several times over.
Can I just transfer the policy to myself?
That is a transfer for less than fair market value and falls squarely inside the 60-month look-back, which can create a penalty period during which Medicaid will not pay. Selling at fair market value is treated differently because value is received in exchange. Speak with a Florida elder law attorney first.
Does selling a policy trigger a penalty?
A sale at fair market value generally should not create a transfer penalty, because the applicant receives value in return. The resulting cash is countable, so it still has to be spent down through permitted means. Keep the offer, contract and escrow records for the file.
What counts as a legitimate spend-down?
Converting countable assets into exempt ones or paying real obligations: irrevocable funeral trusts, prepaid burial, home repairs and accessibility modifications, a vehicle, debt payoff, a properly documented caregiver agreement, and spousal transfers up to the allowance. Each has strict requirements and should be done with counsel.
We still own a house in another state. Does that matter?
Yes. Out-of-state property is a countable asset and must be disclosed. Residency also determines which state’s Medicaid rules apply, so it is worth resolving before an application is filed rather than after.
Where do Tampa Bay families apply?
Through the county and regional offices serving Hillsborough, Pinellas, Pasco and Hernando counties. Assemble identification, income proof, five years of bank statements, deeds, policies and transfer documentation before filing, since incomplete packets are the main cause of delay.
How long does approval take?
It varies with the completeness of the file and the volume at the office. Plan on paying privately in the meantime, which is precisely the gap families use policy proceeds and other liquid assets to bridge.
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Related Reading
- Florida Medicaid Asset Income Limits
- Filial Responsibility Law Florida
- Cash Surrender Value Life Insurance
- Life Settlement Vs Surrender
- Sell Life Insurance Policy Tampa
- Nursing Home Costs Tampa
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.