Medicaid and Nursing Homes

The Main Payer

Medicaid covers about 60% of all nursing home residents in the U.S. If you need long-term care and can't afford to pay privately, Medicaid is the safety net.

Different from Medicare

Medicare covers short-term rehab (up to 100 days). Medicaid covers long-term custodial care for people who meet income and asset requirements. Don't confuse the two.

It's a State Program

Medicaid is run by each state, so eligibility rules and benefits vary. Some states are more generous than others. Check your state's specific rules.

You Need to Be Low-Income

Your monthly income must be below your state's limit. In most states, if your income is above the limit, you can still qualify by using a "Miller Trust" (also called a Qualified Income Trust) to hold the excess income.

Asset Limits Are Strict

In most states, you can only have about $2,000 in countable assets ($3,000 for couples). This includes savings, investments, and second homes. Your primary home, car, and personal belongings usually don't count.

Medical Need

You must need nursing home-level care—meaning you can't safely take care of yourself at home. A doctor and the state will assess whether you meet this requirement.

If You're Married

Medicaid has special rules to protect the spouse still living at home (called the "Community Spouse"). They can keep the house, one car, and some income/assets. Don't let anyone tell you the spouse has to spend down everything.

What Is Spend Down?

If you have too much money or assets to qualify for Medicaid, you have to "spend down" to the asset limit—usually around $2,000. This means using your savings to pay for care until you qualify.

How Long Does It Take?

If you have $50,000 in savings and nursing home costs $10,000/month, you'll spend down in about 5 months. Once you hit $2,000, you can apply for Medicaid.

Don't Give Money Away

Medicaid has a 5-year "look-back" rule. If you gave away assets in the last 5 years to qualify faster, Medicaid will penalize you with a waiting period before coverage starts. Talk to an elder law attorney before doing anything.

What You Can Spend On

You can pay for nursing home care, medical bills, funeral expenses, home repairs, or paying off debt. You CAN'T just give money to family members or hide it.

Where to Apply

Apply through your state Medicaid office. You can usually apply online, by mail, or in person. The nursing home may have a social worker who can help you with the process.

What Documents You Need

Bank statements (last 5 years), tax returns, proof of income, property deeds, life insurance policies, and medical records. Medicaid will verify everything—don't try to hide assets.

Processing Time

It can take 2-3 months (or longer) to get approved. Many nursing homes will let you move in and work on the Medicaid application after admission—they'll bill you privately until Medicaid kicks in.

Retroactive Coverage

Medicaid can cover up to 3 months of nursing home care before your application date if you were eligible during that time. Keep all bills and receipts.

Room and Board

Medicaid covers your nursing home room (usually semi-private), meals, and basic care. If you want a private room, you may have to pay extra out-of-pocket.

Medical and Nursing Care

All medically necessary care is covered—nursing, doctor visits, medications, therapy, medical equipment, and supplies.

Personal Needs Allowance

You get to keep a small monthly allowance (usually $30-$75, depending on your state) for personal expenses like haircuts, clothes, or toiletries. The rest of your income goes to the nursing home.

Not All Facilities Accept Medicaid

Some nursing homes don't accept Medicaid at all. Others require you to pay privately for a certain period (6 months to 2 years) before switching to Medicaid. Ask about this upfront.

Limited Medicaid Beds

Even if a facility accepts Medicaid, they may have limited "Medicaid beds." You might have to wait for an opening, or they may prioritize private-pay residents.

Facilities Can't Kick You Out

If you're already living in a facility and run out of money, they CAN'T evict you for switching to Medicaid (if they accept Medicaid). Federal law protects you. If they threaten this, contact your state ombudsman.

Estate Recovery

After you die, your state may try to recover Medicaid costs from your estate (usually by placing a lien on your home). There are exceptions—especially if you have a surviving spouse or disabled child. Talk to an attorney about protecting your home.

Start Early

Don't wait until the last minute. Medicaid planning can take months or even years if you need to restructure assets. Talk to an elder law attorney as soon as you think nursing home care might be needed.

Protect Your Spouse

If you're married, Medicaid planning can help protect your spouse's income and assets. An attorney can set up trusts, spend down correctly, and make sure your spouse isn't left broke.

Don't Do It Yourself

Medicaid rules are complicated and mistakes can delay coverage or trigger penalties. An elder law attorney is worth the cost—they can often save you tens of thousands of dollars.