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Does Medicaid Pay for Nursing Homes?
Does Medicaid pay for nursing home care? In short, yes. In all 50 states and the District of Columbia, Medicaid will pay for nursing home care for persons who require that level of care and meet the program’s financial eligibility requirements. Readers should be aware that the financial requirements and the level of care requirements vary based on the state. Furthering the complexity is that the financial requirements change based on the marital status of the Medicaid beneficiary / applicant. For those who are eligible, Medicaid will pay for nursing home care, including room and board, on an ongoing, long-term basis as long as the eligibility criteria continues to be met. In many cases, this is for the remainder of one’s life.
Medicaid should not be confused with Medicare. Medicare will only cover skilled nursing home care, will only pay a portion of the cost, and limits the number of coverage days to a maximum of 100. Short-term nursing homes are commonly called convalescent homes and these are meant for rehabilitation, not long-term care. More about Medicaid versus Medicare.
How Much Will Medicaid Pay for Nursing Home Care?
While Medicaid will pay 100% of the cost of nursing home care (including room, meals, and medical supplies), a nursing home resident must contribute nearly all of their income towards these costs. This is called a Patient Liability.
A nursing home resident is permitted a small Personal Needs Allowance (PNA) from their income, with the exact amount dependent on one’s state of residence. For instance, in Florida (and many states), the income limit for Medicaid-funded nursing home care is $2,829 / month (in 2024). The PNA in FL is $160 / month. If one’s income is $2,000 / month, they will be income-eligible, but they have to give the state $1,840 / month ($2,000 – $160 = $1,840). If their income was $1,000 / month, they would have to give the state $840 / month ($1,000 – $160 = $840).
A nursing home resident may deduct medical costs, including Medicare premiums, that are not covered by Medicaid from their income. This further lowers the amount of monthly income that a nursing home beneficiary gives to the state to help cover the cost of their long-term care. For a clearer understanding, one may wish to contact a Medicaid Planner.
Medicaid Eligibility for Nursing Home Care
All 50 states have financial and level of care eligibility criteria for Medicaid-funded nursing home care. The financial eligibility criteria consists of income and asset limits. These limits change annually and vary based on marital status and one’s state of residence. The criteria to meet a Nursing Home Level of Care (NHLOC) need also varies by state. The table below is a generalized view of Medicaid eligibility for nursing home care. View state-specific eligibility requirements.
Financial Eligibility Requirements
|2024 Medicaid Nursing Home Care Eligibility Requirements (approximate, rules vary by state)
|Married (both spouses applying)
|Married (one spouse applying)
|$2,829 / month
|$2,000 in “countable assets”
|$5,658 / month ($2,829 / month per spouse)
|$3,000 in “countable assets”
|$2,829 / month for applicant
|$2,000 for applicant & $154,140 for non-applicant in “countable assets”
Level of Care Eligibility Requirements
“Nursing Home Level of Care” may sound like an obvious care requirement, but each state defines what this means differently and there is considerable variation among the states. One way for a family to assess whether a loved one requires nursing home care (without a formal designation from a doctor) is to consider what would happen if their loved one was left alone for several hours. Would they be a danger to themselves? If so, what are the reasons? Are they medically related? For example, do they require assistance with IV drops or a ventilator? Are they cognitively challenged, such as having Alzheimer’s / dementia related memory issues? Does their behavior lack self-control? Do they have functional challenges, such as the inability to complete Activities of Daily Living (dressing, eating, transferring, using the toilet, etc.)? If the individual is in danger for two of these reasons, it is likely they would qualify for NHLOC, and therefore, qualify for Medicaid from a “level of care” perspective.
A related question is if Medicaid covers nursing home care for dementia? A diagnosis of Alzheimer’s or related dementia does not automatically make one eligible for Nursing Home Medicaid. This is especially true for individuals in the early stages of the disease. However, as the condition progresses, these individuals will certainly meet Medicaid’s Nursing Home Level of Care requirements.
Qualifying When Over Medicaid’s Financial Limits
It is common for one to have income and / or assets over Medicaid’s limit(s), but still have inadequate funds to pay for nursing home care. Fortunately, there are ways to meet these limits without jeopardizing one’s Medicaid eligibility.
Some states allow one to meet the income limit via a Medically Needy Pathway. This allows persons who are over the income limit, but have high medical expenses, to become income-eligible by spending “excess” income on medical costs. The name of this program varies by state, but essentially it is a “spend down” program. The amount of income one must “spend down” is dependent on their income. This can be thought of as a deductible and is the difference between one’s monthly income and the state’s medically needy income limit. Once one has met their “spend down”, they are income-eligible for Medicaid for the remainder of the spend down period.
Other states allow persons to qualify by utilizing Qualified Income Trusts, also called Miller Trusts. As an oversimplified explanation, income over Medicaid’s limit is deposited into the irrevocable trust, no longer counting as income for Medicaid eligibility purposes. Irrevocable means the terms of the trust cannot be changed or canceled. A trustee is named to manage the account and funds can only be used for very specific purposes, such as contributing towards the cost of nursing home care.
In all states, persons can “spend down” their assets that are over Medicaid’s limit. However, one needs to proceed with caution. Medicaid has a 60-month Look-Back Period in which assets transferred for less than fair market value result in a Penalty Period of Medicaid ineligibility. Ways to spend down assets without violating this rule include purchasing an Irrevocable Funeral Trust, paying off debt, and buying medical devices that are not covered by insurance. There are also several Medicaid planning strategies not mentioned on this page that can be used to help persons meet Medicaid’s asset limit.
Do All Nursing Homes Accept Medicaid?
It is estimated that between 80% and 90% of nursing homes accept Medicaid. While this percentage sounds high, these percentages are very misleading. Nursing homes may accept Medicaid, but often have a limited number of “Medicaid beds”. “Medicaid beds” are rooms, or more likely shared rooms, that are available to persons whose care will be paid for by Medicaid.
Nursing homes prefer residents that are “private pay”, meaning the family pays the cost out-of-pocket. This is because private pay residents pay approximately 30% more for nursing home care than Medicaid pays. In 2024, the nationwide average private payer pays approximately $260 / day for nursing home care while Medicaid pays approximately $182 / day. Search for Medicaid nursing homes.
How to Apply for Medicaid Nursing Home Care
Applying for Medicaid nursing home care, assuming the individual is not already enrolled in Medicaid, is a multi-step process. First, the applicant applies for Medicaid, which they can often do online or at their state Medicaid office. One should not apply unless they are certain they will be financially eligible. Candidates can take a non-binding, Medicaid Eligibility Test here. Persons who are not automatically eligible should read about Medicaid planning.
The application requires an extensive amount of supporting documentation. Families should be prepared to spend many hours gathering financial documents. See a list of Medicaid application supporting documents.
Applicants must participate in a medical assessment in which their need for a Nursing Home Level of Care will be evaluated.