Nursing home costs that Medicaid covers
For eligible beneficiaries, Medicaid pays the full cost of room and board in a nursing facility, plus any therapies that are part of the nursing home's regular resident care. Medicaid's payment also includes personal care items such as incontinence supplies and toiletries, as well as services such as bathing, grooming, and laundry.
There's no time limit on Medicaid nursing home coverage. And the Medicaid beneficiary has no co-payments to make.
Income levels for Medicaid nursing home eligibility
The income limits for Medicaid nursing home coverage eligibility are different for a single (unmarried, divorced, or widowed) person than for a married couple.
Income limits for Medicaid nursing home coverage: Single person
State Medicaid programs limit the income of an unmarried nursing home resident in two different ways. One way, used by some state Medicaid programs, establishes a monthly income eligibility limit, which varies from about $300 to $700, after regular medical expenses are deducted. If a Medicaid applicant has income higher than the Medicaid limit in one of these states, that person isn't eligible for Medicaid coverage of nursing home care.
Other states have no income limit but instead require the beneficiary to pay almost all income to the nursing home, with Medicaid paying the balance of the nursing home's charges. In these states, the Medicaid program allows the resident to keep only a small amount -- about $50 to $100 per month -- for personal needs. Some of these states also allow a small amount of income to be retained by the resident for upkeep on the resident's home, usually only for up to one year of admission to the nursing home, and only if a physician certifies that the resident might be able to return home.
Income limits for Medicaid nursing home coverage: Married couple
When one spouse enters a nursing home and the other spouse (often called the "community spouse") remains at home, Medicaid has special income rules for each.
Initial eligibility rules. For initial eligibility for coverage of nursing home care, Medicaid only considers income in the name of the person entering the nursing home. Income in the name of the community spouse is not counted at all -- the community spouse can keep all income in his or her name. (This is sometimes called the "name-on-the-check" rule). The exact amount of the Medicaid applicant's allowable income is determined by the specific Medicaid program in that state but is usually only $300 to $700, after regular medical expenses are deducted.
Post-eligibility rules. Once a married person in a nursing home has become eligible for Medicaid coverage, new income rules kick in. The person in the nursing home can keep only a small monthly allowance for personal needs (in some states as low as $30), plus amounts necessary to pay for uncovered medical costs. Some income that belongs to the spouse in the nursing home -- meaning income in the name of the nursing home resident -- can go to the community spouse if the community spouse's own income doesn't reach the monthly community spouse income allowance. This income allowance for the community spouse is between $1,750 and $2,739, varying from state to state. In other words, if the community spouse's own income is less than the state's income allowance, the nursing home resident's income can go to the community spouse until the combination of incomes reaches the income limit. Any remaining income in the name of the nursing home resident goes to Medicaid, to offset the cost of the nursing home.