If you need long-term care—such as nursing home care, assisted living, or home health care—your costs can add up quickly. In 2024, the median cost of nursing home care is expected to top $100,000 a year, while the cost of assisted living is anticipated to hover around $65,000.
Many people are unpleasantly surprised to discover that Medicare pays very little of long-term care costs, if any. But if you have a low income as well as (in most states) limited assets, Medicaid—an entirely different program from Medicare—can help you pay for your care.
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Medicaid is a joint federal and state program, and the states have some flexibility in setting the benefits they will offer and the eligibility criteria for those benefits. As a result, there are significant variations among state Medicaid programs.
Will Medicaid Pay for Assisted Living or Home Care, or Just Nursing Homes?
In the past, nursing home care was the only type of long-term care covered by Medicaid. But in more recent years, states have also begun to cover at-home care and assisted living care (both of which fall into the category known as home or community-based services, or HCBS). Most commonly, coverage for HCBS is provided through a state “waiver” program—so called because the program waives certain federal requirements that restrict states, and allows states to operate more freely.
Today, Medicaid can cover for long-term care provided at:
- a nursing facility (nursing home)
- an assisted living facility (ALF), or
- home (often through the services of a home health aide).
Does Medicaid Pay for Nursing Home Care?
Your state’s Medicaid program is required to pay 100% of your nursing home costs if you require long-term care and your income and your assets fall below certain levels established by your state. Each state has its own asset and income limits (more on this below).
Does Medicaid Pay for Assisted Living?
While care in assisted living facilities didn’t used to be covered by Medicaid, more and more states are offering assisted living coverage, in recognition of the fact that both assisted living care and at-home care are less expensive than nursing facility care, and are also often preferable to the person who needs care.
Some states, however, cover assisted living care only in certain counties, or they cover only part of the cost. So while Medicaid pays for nursing home care everywhere, whether Medicaid pays for assisted living, and how much, are questions that will have different answers depending on where you live (more on this below).
Does Medicaid Pay for Home Health Care?
The same coverage trend applies to home health care. All states now offer some level of Medicaid benefits for care in home settings, but the breadth of coverage varies widely. For example, state waiver programs for home care do cover nursing care and home health aide services in your home, as well as physical, occupational, and speech therapy, but only some states will cover personal care—meaning assistance with bathing, dressing, eating, and using the bathroom.
Do All Nursing Homes Accept Medicaid? What About Assisted Living Facilities?
Beware that not all nursing homes, assisted living facilities, or other long-term care facilities accept Medicaid payments. A nursing home or assisted living facility can tell you whether they accept Medicaid patients; you can ask them directly.
A facility that accepts Medicaid will be licensed by the state and subject to periodic inspections to ensure that the facility meets federal standards. Some facilities can’t meet those standards, while others choose not to accept Medicaid payments because they can charge higher rates to privately paying residents.
How to Find Nursing Homes That Accept Medicaid Near You
The American Council on Aging offers a search tool you can use to find nursing homes near you that accept Medicaid or Veterans Health Care. Just enter your zip code and indicate whether or not you receive Medicaid already.
The Centers for Medicare & Medicaid Services (CMS) website also has a good “care compare” tool you can use, but after you add your zip code, you have to filter for nursing homes that accept Medicaid.
Types of Assisted Living Covered by Medicaid
Assisted living doesn’t offer either the medical care or the level of attention of a nursing facility, but it does provide extensive monitoring of each resident’s physical and mental condition, personal care, household tasks in a resident’s living space, and meals. Most people move to assisted living because they need help with one or more of what are known as the activities of daily living (ADLs). ADLs include eating, bathing, dressing, continence and using the toilet, walking and getting in and out of a bed or chair.
Memory care facilities are for people who suffer symptoms from Alzheimer’s or other age-related disorientation. A memory care facility can look more like an assisted living facility with some specialized care or more like a skilled nursing setting, depending on the level of care needed. Staff at memory care facilities are prepared to provide care around the clock, and so the cost of memory care is usually higher.
Depending on your state, Medicaid can pay some or all of the cost of assisted living or memory care facilities. Typically, Medicaid will pay for certain services provided at an assisted living facility (such as help with ADLs, medication management, case management, and home health aides), but won’t pay the cost attributed to room and board. (In contrast, Medicaid will pay 100% of the costs for memory care services provided in a skilled nursing facility, for people who need a nursing home level of care.)
For more guidance after you read this article, see our state-by-state articles on when Medicaid pays for assisted living and home health care or reach out to your county’s department of health, social services, or welfare.
Medical Eligibility for Medicaid Long-Term Care
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While most people who receive Medicaid for long-term care needs are elderly, you don’t need to be over 65 to qualify for Medicaid assistance with long-term care expenses. Children and adults under 65 may need nursing home care for various reasons. But note that the Medicaid eligibility criteria may be different for these people than for those over 65.
For Medicaid to pay for a nursing home or care at home or in an assisted living facility, the care must be “medically necessary” for the patient. States have different rules that determine when long-term care is medically necessary, but usually a doctor must state that this care is needed. In some states, you’ll need to undergo a “level of care assessment” to determine whether you need nursing home care, assisted living, or home health care.
Read more about your state’s medical necessity rules in our state articles on Medicaid eligibility for assisted living and long-term care.
Financial Eligibility for Medicaid Long-Term Care
States have a variety of rules regarding who qualifies for Medicaid, but you must usually have both:
- very low income, and
- very few assets (savings and other resources).
Even within a state, the financial eligibility guidelines may differ depending on whether you are receiving nursing facility care or at-home care. Below, we discuss typical income limits and asset limits, but some states can veer drastically from the norm. For example, California has phased out the asset limit entirely, and New York also has a much higher asset limit than most other states.
Learn more about your state’s financial eligibility rules in our state articles on Medicaid eligibility for assisted living and nursing homes.
What Are Medicaid’s Income Limits for Nursing Homes and Assisted Living?
For those over 65, most states have more flexible income guidelines for Medicaid coverage of long-term care. In most states, you can make up to 300% of the SSI income limit and still qualify. (In 2024, 300% of the SSI limit, $943, is $2,829 per month).
In addition, some states offer an additional way of measuring income: If your medical expenses are so high that they would reduce your income to below a specified—usually very low—limit, you can qualify for Medicaid. This is called qualifying as “medically needy.” Even if your income is too high to qualify the traditional way (called the “categorically needy” way), you might still qualify as medically needy.
What Are Medicaid Asset Limits for Nursing Homes and Assisted Living?
In addition to an income limit, states also impose a limit on the amount of assets you can have while still qualifying for Medicaid. Again, the exact asset limit varies widely by state, but for many states, the asset limit is $2,000 (or $3,000 for a married couple).
Note that in a handful of states (notably New York), the asset limit is significantly higher. And California has phased out the asset limit completely, starting in 2024. Check with your local county’s department of health, social services, or welfare to find out the specific limits in your state.
Assets that aren’t counted. Fortunately, some of your assets are exempt. That means when tallying up your assets, you can leave out the following:
- a car
- household and personal belongings
- one wedding and one engagement ring of any value
- burial plots and pre-paid funeral expenses
- a very small whole life insurance policy
- your home, if you intend to return to it or your spouse, minor child, or blind or disabled child live in it.
Some assets have limits. Many states set limits on the categories of exempt assets listed above. For example, most states allow you to exclude a life insurance policy only if the face value is $1,500 or less. And even if your home qualifies as an exempt asset because you intend to return home, most states will allow only a certain amount of equity in your home to be excluded—usually $713,000 or $1,071,000. (This amount rises each year with inflation.)
Spending down assets. If your “countable” (non-exempt) assets exceed the asset limit set by your state, you can qualify for Medicaid coverage only after you have spent enough money (for example, on long-term care, out of your own pocket) to reach these limits—a process referred to by Medicaid as “spending down” your assets.
Asset Transfers and Medicaid’s 5-Year Look-Back Rule
If you’re spending down your assets to qualify for Medicaid, you can’t just give away all of your money to your family to qualify for Medicaid faster. Beware of a major Medicaid rule limiting your ability to transfer assets: Any asset transferred out of your name during the “look-back period” can result in a penalty period during which you’re not eligible for Medicaid.
The look-back period is usually 60 months (5 years), counting back from the date of your Medicaid application. Some states also have more lenient look-back periods for home-based (HCBS) coverage as opposed to nursing facility coverage. For example, New York historically did not have a look-back period for community-based long-term care (CBLTC) services. However, the state has instituted a look-back period of 30 months (2.5 years) for these services (called “Community Medicaid” in New York).
California used to have look-back period that was half as long as the standard: 30 months (2.5 years), but in 2024, the state removed the asset limit altogether, and so it no longer has a look-back period.
How Much Income Can a Nursing Home Resident Keep?
Once a long-term care facility resident qualifies for Medicaid and begins to receive benefits, that resident must contribute nearly all of their income to the facility. Medicaid will pay the balance of the bill for the costs of care. But the resident can retain a small amount of income in the following forms:
- a monthly personal needs allowance to spend on personal items such as books and magazines, clothing, vending machine snacks, and toiletries—usually ranging from $30 to $100 a month, though a few states allow more
- out-of-pocket medical expenses not covered by Medicare or Medicaid, including income the resident spends directly on Medicare premiums, deductibles, and copayments
- a monthly home maintenance allowance during short-term stays in a facility (available only in some states), meaning a resident can keep a certain amount each month for up to six months’ worth of home maintenance expenses—such as repairs, mortgage payments, and property tax payments on the resident’s private home; this allowance requires a doctor to determine that the resident will likely be able to return home within six months after entering the facility, and
- a spousal allowance, if you’re married and your spouse would otherwise become “impoverished” (not have enough money for basic needs).
Spousal Impoverishment Protection When a Spouse Stays Home
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If only one member of a married couple needs long-term facility care, every state has its own rules protecting the spouse who stays at home from becoming impoverished while the other spouse receives Medicaid. This protection comes in two forms:
- a spousal allowance, also called a monthly maintenance needs allowance, or MMNA, and
- a community spouse resource allowance, or CSRA.
Minimum Monthly Maintenance Needs Allowance
The spousal income allowance, or monthly maintenance needs allowance (MMNA), is reserved for the at-home spouse if the at-home spouse would otherwise become impoverished because the spouse needing long-term care has to contribute nearly all of their income to Medicaid. In other words, the MMNA provides some income protection for at-home spouses with little or no income of their own.
The at-home spouse is entitled to keep a portion of the income of the spouse who will be living in long-term care. The MMNA applies whether the “at-home” spouse is living in a nursing home, staying in assisted living, or receiving home care services.
Federal law says that the minimum MMNA (“MMMNA”) amount should equal at least 150% of the federal poverty level, but states have the option to use a higher level. In 2024, the minimum level of MMNA that states must allow is $2,465 (this numbers creeps up each year with the federal poverty level). About 30 states use this figure, while other states use a higher figure. For example, California, New York, and Texas have a minimum MMNA of $3,853.50 (the maximum allowed by federal law).
Many states use two set of figures, the minimum figure and a higher figure, called the maximum monthly maintenance needs allowance. If the at-home spouse has housing costs that are higher than a certain amount, they’re entitled to keep more income, up to the maximum monthly maintenance needs allowance in their state. In all states except for North Dakota, the maximum MMNA amount is $3,853.50.
Community Spouse Resource Allowance
While the MMNA reserves income for the at-home spouse, the community spouse resource amount (CSRA) protects some assets for the at-home spouse. The CSRA applies whether the “at-home” spouse is living in a nursing home, staying in assisted living, or receiving home care services.
Note that the CSRA doesn’t apply in California because the state removed its Medi-Cal asset limit in 2024.
States use the community asset allowance in two different ways.
Most states use both a minimum CSRA (typically $30,828) and a maximum CSRA ($154,140). (These amounts are raised slightly every year.) In these states, the at-home spouse is able to retain half of the couple’s combined assets up to the maximum CSRA. But if the at-home spouse’s half of the assets don’t reach the minimum CSRA, then the at-home spouse can retain all of the assets, up to the minimum CSRA. Some states, including New York, and D.C., use a minimum CSRA amount that’s significantly higher than the federal minimum of $30,828.
About a dozen states (including Florida) use a different approach: The at-home spouse can retain all of the combined assets up to the single CRSA cap in that state, which is most often $154,140, but is sometimes lower (as in Illinois and South Carolina).
Check with your local social services agency to find out your state’s MMNA limits and CRSA amounts.
Future Medicaid Claims Against Your Estate
Medicaid has the right to collect the entire amount it has spent on the long-term care of anyone age 55 or over—whether that care was home care or care in a long-term care facility. This is called “Medicaid Estate Recovery.”
Medicaid most often recoups this money out of any assets in the Medicaid recipient’s estate at death. If the Medicaid recipient has lawfully transferred assets out of their name before death, without violating Medicaid’s transfer rules, those assets usually can’t be taken for Medicaid reimbursement. And if the recipient dies without any property left, that’s usually the end of the story; the state will not ask the recipient’s heirs to repay the costs.
But estate recovery practices and rules vary by state. For example, in some states (inlcuding California), only assets in a Medicaid recipient’s “probate estate” can be used to reimburse the costs of care. (A probate estate consists of any property that must go through probate. Assets that don’t go through probate, such as property transferred by trust, would be protected from recovery.)
And whether you might qualify for an exception from estate recovery will also vary by state. To find out the particulars of your state’s estate recovery procedures, find an experienced estate planning lawyer who has experience with Medicaid planning.
How to Apply for Medicaid Assisted Living or Nursing Home Care
You can apply for Medicaid for assisted living or nursing home care online at your state’s Medicaid website or in person at your local Medicaid office. You can find both places on the CMS’s state resource map. Or go to medicaid.gov for their page with state Medicaid resources.
Your Medicaid agency may request you to submit the following documents:
- pay stubs or Social Security benefit letter
- tax forms
- bank account statements
- life insurance policies, and
- more.
The agency will also request information from your doctor about your present need for long-term care or ask you to undergo a “level of care assessment” to determine whether you need nursing home care, assisted living, or home health care.
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