Medicaid and Nursing Homes: Coverage, Eligibility Requirements, and How to Apply

Medicaid is a joint federal and state health insurance program that primarily serves low-income Americans, including eligible people 65 years of age and older. Because Medicaid is a state-administered program, eligibility, benefits, and coverage vary from state to state.

It’s important to note that while they sound similar and sometimes provide similar benefits, Medicaid and Medicare aren’t the same thing. Medicare is administered at the federal level and primarily serves Americans over age 65, while Medicaid is administered by the states and focuses more on coverage for low-income Americans.

Medicaid coverage is also often more comprehensive than Medicare, though some individuals may be “dually eligible,” or eligible for coverage under both programs. Typically, Medicare supports short-term care, and Medicaid can be used to help cover long-term care for eligible individuals.

As of 2024, Medicaid provided health insurance coverage to more than 70 million Americans — this accounts for 21.6% of the U.S. population.^[01] Medicaid was the primary source of payment for 63% of skilled nursing facility residents in 2024.^[02]

Nursing homes provide 24/7 nursing care for people who need long-term or short-term medical care, but don’t need to be in the hospital. They also offer a high level of care for people who need skilled nursing or rehabilitation for severe physical or mental health conditions. Residents benefit from round-the-clock supervision — which helps keep them safe — and a dedicated team of trained staff who can provide personalized care and assistance.

Nursing homes are distinct from other types of senior living, such as independent living, assisted living, and even memory care. Generally, the individuals who best fit a nursing home level of care would not be able to find that level of care elsewhere. Independent living doesn’t usually offer care, and assisted living and memory care don’t typically offer skilled nursing, though they do help residents with activities of daily living (ADLs).

Read more:A Guide to VA Nursing Homes: Types, Eligibility Requirements, and Costs

Can you afford senior living?

Yes, Medicaid may cover the cost of nursing home care for qualified beneficiaries at eligible facilities.^[03] Nursing homes that accept Medicaid typically designate a certain number of beds in their community as Medicaid beds — meaning that they’ll accept Medicaid as payment for services provided to people in these beds.

What services are covered under Medicaid?

The U.S. federal government requires Medicaid-certified nursing facilities to provide the following services and supports to eligible residents at no cost:^[03]

• Nursing and related services
• Specialized rehabilitative therapies
• Medically-related social services
• Pharmaceutical services
• Individualized dietary services
• Professionally directed programs and activities that promote resident well-being
• Emergency dental services
• Routine dental services (as allowed by a state’s plan)
• Room and bed maintenance
• Common personal hygiene items and services

The above list is not exhaustive, as other necessary services or support may be covered. Look into your state’s Medicaid program to learn more.

What expenses aren’t covered by Medicaid?

Medicaid-certified nursing facilities may require residents to cover some or all of the costs of the following, as noted by the Centers for Medicare and Medicaid Services (CMS):^[03]

• Private room, unless medically necessary
• Specially prepared food
• Telephone, television, or radio
• Personal comfort items
• Additional cosmetic or grooming items and services
• Personal clothing
• Personal reading materials
• Gifts purchased on behalf of a resident
• Flowers and plants
• Social events and activities beyond the activity program
• Special care services

Medicaid typically covers 100% of nursing home costs, as Medicaid nursing home coverage is an entitlement for those who meet their state’s eligibility criteria. Medicaid will cover the costs for as long as the eligible person requires that level of care, whether that’s for a few months or for the rest of their life. However, not all nursing homes accept Medicaid as a form of payment.

To get Medicaid coverage for nursing home care, your loved one must first be eligible for Medicaid, then apply for coverage. Medicaid is a joint federal and state program that each state administers, and requirements vary from state to state. In general, eligibility for Medicaid nursing home care is based on medical and financial criteria.

For more specific requirements for your state, visit the Medicaid website.

Medical criteria

To qualify for Medicaid nursing home care, there must be a need for constant medical attention and a nursing home level of care (NHLOC), even if your loved one is not already in a nursing home.^[04] Each state has its own criteria to determine what constitutes a NHLOC, but it generally requires a needs assessment to understand an individual’s ability to perform activities of daily living (ADLs).

Financial criteria

Financial requirements for Medicaid nursing home care are divided into income limits and asset limits.

Medicaid’s income limits range from $1,000 to $3,000 a month, depending on the state. In some states, the income limit for nursing home residents is higher than the income limit for receiving other Medicaid benefits. This means that someone who didn’t qualify for Medicaid in the past because their income exceeded the limit may be eligible for Medicaid to cover the cost of their stay in a nursing home.^[05]

Asset limits depend on the state as well, but for most states, the limit is $2,000 for a single individual.^[06] A person’s primary residence, vehicles, and personal belongings do not generally count as assets.

If your loved one transferred assets, they may be subject to scrutiny under the Medicaid look-back period. In most states, this look-back period examines asset transfers from the last 5 years. If assets weren’t transferred correctly, your loved one may face a penalty and be prohibited from receiving Medicaid benefits.

It’s a good idea to work with an elder law attorney with experience in Medicaid law or a Certified Financial Planner® (CFP®) at least five years prior to your loved one needing care, as these professionals can help you understand how to appropriately transfer assets.

Read more:What Are The Top 5 Medicaid Myths?

The application process for Medicaid nursing home benefits varies by state. However, the basic steps are generally as follows:

1. Determine whether your loved one meets the medical and financial eligibility requirements in their state.
2. Gather any documents deemed necessary by the state Medicaid agency, such as proof of income, banking documents, etc.
3. Complete the Medicaid application through the state Medicaid agency.
4. Wait for the Medicaid application acceptance or denial.

Consider consulting with your local Area Agency on Aging or an elder law attorney with Medicaid expertise in your loved one’s state. Do this before applying to avoid incurring a costly penalty period of disqualification for Medicaid. You can find elder law attorneys by location through the National Academy of Elder Law Attorneys directory.

Expert advice for affordable senior living

If your loved one doesn’t meet the requirements for Medicaid nursing home care or doesn’t wish to move to a nursing home, Medicaid may still help. Medicaid may at least partially cover other types of care and settings, such as home care, adult day care, assisted living, and memory care. Programs, requirements, and coverage vary by state.

• Home care. Medicaid may cover home health services for qualified Medicaid beneficiaries. Medical requirements typically apply.
• Assisted living communities. Medicaid doesn’t typically cover room and board in assisted living communities, but it may pay for some care services under certain circumstances.
• Memory care. Medicaid may cover the cost of memory care-related prescriptions and services provided at a senior’s home or in an assisted living community.
• PACE program. PACE, or Program of All-inclusive Care for the Elderly, is a Medicaid program that provides health care services to eligible seniors. They must require the level of care that a nursing home would provide, but not want to live in a nursing home. This program is only offered in certain states.

If your loved one is a veteran, VA benefits may also be used to pay for nursing home costs.

Finding the right care for your loved one depends on their needs, preferences, and financial situation. For those considering Medicaid, it’s important to understand their state’s medical and financial eligibility requirements.

While A Place for Mom doesn’t currently refer families using public pay methods such as Medicaid, our advisors may still be able to help. Many seniors spend down their assets in order to qualify for Medicaid, which can be achieved legally by paying out-of-pocket for home care or senior living. In this case, a Senior Living Advisor can help you find a community that best fits your loved one’s medical and financial needs.