Medicaid Coverage of Nursing Home Care in 2017

Medicaid is a federal government program that pays long-term nursing home costs for people with low income and few assets (other than a house they own). Each state administers its own Medicaid program, with slightly different eligibility rules. In some states, Medicaid pays some of the cost of assisted living for eligible residents in participating facilities.

Who's eligible for Medicaid nursing home coverage?

Medicaid nursing home coverage is available only to people who are unable to care for themselves at home. They must meet their state's eligibility limits regarding income and assets, which differ depending on whether the resident is single or part of a married couple (see below). They may reside in any level nursing home that's certified by Medicaid and that accepts Medicaid payment. Be aware, however, that some nursing homes only accept Medicaid payment for a limited number of residents.

Unlike Medicare coverage of nursing home care, there's no Medicaid requirement of a prior hospital stay, no restriction to skilled nursing facilities, and no requirement that the person need skilled nursing care or still be recovering from an illness or injury in order for Medicaid to continue coverage. In other words, Medicaid -- unlike Medicare -- will cover residence in a nursing home purely to provide help with the nonmedical activities of daily living -- what's called "custodial care."

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Types of 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.

The income limits for Medicaid nursing home coverage eligibility are different for an 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.

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 $2,002 and $3022 for 2017, 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.

Asset limits for Medicaid nursing home coverage

Single person

To qualify for Medicaid coverage of nursing home care, an unmarried person is allowed only limited assets. These include a maximum of $2,000 in cash, savings, stocks, or other "liquid" assets; a life insurance policy of up to $1,500 face value; and a burial plot and burial fund of up to $1,500.

In some states, an unmarried person can also keep his or her home if declaring in writing, upon admission to the nursing home, an intent to return home. However, states that permit this usually put a 6- or 12-month limit on the length of time a resident can keep the home without actually returning to it. If a Medicaid nursing home beneficiary is allowed to keep a house, Medicaid will seek reimbursement from the value of the house when it's sold.

Note: Medicaid does not allow asset giveaways

In determining how much an applicant for nursing home coverage has in assets, Medicaid examines that person's financial records for the five years prior to the application date and penalizes the applicant for any improper transfers made within that five-year period.

Married couple

Medicaid has special nursing home coverage eligibility rules when one spouse enters a nursing home and the other spouse (the "community spouse") remains at home. Medicaid looks at the combined assets of both spouses. From that combined amount, Medicaid allows the community spouse to keep:

  • The house in which the community spouse lives. (If the couple sells the house, or the community spouse moves out, the value of the house or the proceeds from its sale become part of the couple's combined assets.)

  • A "Protected Resource Amount" (PRA) for the community spouse of between $24,180 and $120,900 for 2017. Each state sets its own PRA between those minimum and maximum amounts.

  • All furniture, appliances, and other household goods.

  • One automobile.

  • Life insurance of up to $1,500, face value, for each spouse.

  • Two burial plots and a burial fund of up to $1,500 for each spouse.

Once these amounts are subtracted from the couple's combined income, all other assets are totaled to determine whether the nursing home spouse is eligible for Medicaid. The asset eligibility limit is set differently by each state.

Medicaid rules on asset transfers before nursing home coverage

5-year Medicaid look-back period

When someone applies for Medicaid coverage of nursing home care, Medicaid examines that person's assets to see if he or she falls below the Medicaid eligibility limit. But Medicaid doesn't simply look at what those assets are at the time of applying. Instead, Medicaid examines the applicant's financial records during the previous five years. If, within that time, the applicant has made a gift of funds or other assets to anyone, that gift will result in a delay of eligibility. The same is true of any asset transferred or sold for less than fair market value -- selling a car worth $20,000 to a grandchild for $5,000, for example.

If Medicaid determines that an applicant for Medicaid nursing home coverage has made an invalid asset transfer, the resulting delay is equal to the amount of the transfer divided by the average monthly nursing home cost in the state.

For example, if the person invalidly transferred $25,000 and the average monthly nursing home cost in the state is $5,000, his or her Medicaid eligibility would be delayed for five months ($25,000 divided by $5,000 = 5). The coverage delay begins from the date of the application for Medicaid.

Permissible asset transfers

Some gifts or transfers within the five-year period before an application for Medicaid nursing home coverage are considered valid and don't cause any coverage delay.

Unmarried person

An unmarried person who applies for Medicaid coverage of nursing home costs can transfer the following assets without any penalty:

  • Home to a child. An unmarried Medicaid applicant can transfer title of his or her home to an adult child who's lived in the home for two years prior to the applicant entering a nursing home, during which time the adult child provided care that permitted the applicant/parent to live at home instead of entering a nursing home.

  • Home to a sibling. An unmarried Medicaid applicant can transfer full title of his or her home to a brother or sister who already has an ownership interest in the home and has lived there for at least the year prior to the Medicaid application.

  • Other exempt assets. An unmarried Medicaid applicant can transfer any other exempt asset -- such as a car or personal and household belongings -- to anyone.

  • Any asset to a blind, disabled, or minor child. An unmarried Medicaid applicant can transfer any asset, including a home, to a blind, disabled, or minor child.

Married person

A married person who applies for Medicaid coverage of nursing home costs can transfer the following assets without any penalty:

  • Home. A married Medicaid applicant can transfer home title to his or her spouse who remains living in the home (the "community spouse"). The community spouse can then, if he or she wants to, transfer title to an adult child or someone else. This double transfer takes the house out of the nursing home resident's estate and therefore is beyond the reach of Medicaid reimbursement when the community spouse dies.

  • Other exempt assets. A married Medicaid applicant can transfer any other exempt asset -- such as a car or personal and household belongings -- to anyone.

  • Any asset to a blind, disabled, or minor child. An unmarried Medicaid applicant can transfer any asset, including a home, to a blind, disabled, or minor child.

Medicaid can seek reimbursement out of the family home

In every state, Medicaid allows a spouse who remains at home (the "community spouse") to keep the house he or she lives in. But once both the nursing home resident and the community spouse die, or the community spouse sells the house, Medicaid will seek reimbursement -- of the total amount it's spent on nursing home care -- out of the value of the house.

Medicaid will seek this reimbursement unless the house has been transferred out of the nursing home resident's name in one of the permissible ways discussed above. The community spouse who sells the house, or the heirs to whom the house is left when both spouses have died, must repay Medicaid the total that Medicaid has spent if they want to keep the house, or they must sell the house and pay Medicaid out of the proceeds of the sale.

More Medicaid questions? Find health insurance counseling for seniors in your state.

Joseph L. Matthews

Joseph Matthews is an attorney and the author of numerous books, including Social Security, Medicare, and Government Pensions, Long-Term Care: How to Plan and Pay for It; How to Win Your Personal Injury Claim; and The Lawyer Who Blew up His Desk. See full bio

2 days ago, said...

I moved from my home in another state to care for my parents with Alzheimer's Disease, in their home to care for them. I wasn't paid other than room and board. This time period was for nearly nine years. Four years for both parents and an additional five years responsible to my mother whom after a total of nine years of care giving I could not continue as I became mentally incapable of continuing with her care. Mother no longer has any assets. Thee months ago we placed in a memory facility private pay. My brother can no longer pay for her care and we must file for Medicaid. Where may I seek guidance free of charge.

24 days ago, said...

Dad needs to into nursing home, had Alzheimer's. Mom is still healthy and lives in their house. I have been on bank account and am on deed, all for seven years . They are above $120,000 in cash assets, home is owned completely. What assets would nursing home take . We live in Alabama . Has Medicare and insurance.

28 days ago, said...

I live in Oklahoma. I have suffered a series of financial set backs. this has put me far behind in my co pay for my husband's nursing home care. I don't know what to do.

29 days ago, said...

My mom is a Florida resident and now requires total care. Her care is shared by her children and she now spends 8 months per year in NC and four months in Florida. Should she change her residency to NC?

about 1 month ago, said...

Good morning! My dad has Alzheimer's and needs to be placed in a nursing home soon. I am the daughter and have lived here with my parents for 19 years and I have been dad's caregiver for the last 2. My mom is worried about what she will have to pay the nursing home before Medicaid for my dad kicks in (medicaid pending) The nursing home we are putting him costs 206.00 per day :( We are at such a loss because my dad did not set her up for things in life like this at all :( Can anyone please help me with this. I hate seeing my mom being worried sick :( Thank You- Deb

2 months ago, said...

A local Nursing Home in WI says a resident covered bu Medicaid is not entitled to Physical Therapy. Is this true?

3 months ago, said...

Can a Medicaid receipent transfer assest to a grandchild

3 months ago, said...

My Dad is entering the nursing home. I need to know if he is able to keep paying his life insurance premiums while in the nursing home.

3 months ago, said...

My brother was staying with my father for 2 months prior to him entering a nursing home.during which time my brother neglected him will medicade make my brother move out of my father's house if so how long do they have to leave.

3 months ago, said...

What are restrictions for a private room.

4 months ago, said...

My father had been in a nursing home for 16 months, we sold his house and have been private pay since Jan 2017. The funds from his home are almost depleted. I know we can keep $2000.00 in his account, but I was told we can "gift" monies 1 time, what is this amount, I have been told several figures. We want to the this amount and split it between his great-grandchildren. We live in the state of Indiana.

4 months ago, said...

It is time to place my wife of 55 years into a memory care nursing care. How can I do this without her panicking. She still has enough awareness of her existence to know she is being placed in a ' Nursing Home', that is going to be final. I've kept her home for several years now but now her needs are far more than I can provide for her sanitation, safety, and health. We have 3 children near us that love her..shall I seek their help with being there when she goes in? Or say nothing until we get there ? Do you have any other recommendations?

5 months ago, said...

What right does nursing home to take $2.900/$3.100 of our income & leave me to live on $710 before medical is taken out? I was told they would take half. Between him & I we make $3.600/$3.800 a month before medical is taken out. We make to much for your medicaid help. I had to go hungry to pay bills. I can't get help with my medical because of his income that I'm not able to use any of it. It's not right. He didn't want to be in nursing home & I didn't want him there. I want his last days at home. He was missing for 6 months when I hot a bill for h & I found where he was right back in nursing home that was abusing him in the first place.

6 months ago, said...

My dad who is 47 ended up having a stroke. He went into a coma which caused alot of damage to his brain. We have tried getting medicaid 3 different time & they keep denying it. I'm not sure what else to do? He is currently in a nursing home/hospital.

7 months ago, said...

My father is 80 He was being evicted from his Apartment so I took him home with me. My home is 3 levels The kit is on the bottom the bedroom he will use is on the middle level but ha no walk in shower He uses a cane. He has fallen on the stair s He has to be given his medication and can not cook anything because he may not remember to turn the gas off He can not bath because the shore is on the third level. I only took him temporarily because I knew it was not suitable for him with his handicaps like demenitia, and falling I contacted Medicaid in Oregon where I live. They set up a phone conversation with my father husband and me. Foe an interview. I also told them that we all work and are gone 10hours a day so no one is there to supervise him which he needs 24 -7day which will result in an accident either on his person or burn the house down After the interview the woman from Medicaid told us he does not qualify what am I to do we cannot afford to provide 24 hour supervision and I cannot leave him alone and he does not have enough income or and zero assets? Should I just drop him off at the Medicaid office and leave Children are not responsible Thank you for advice.

8 months ago, said...

my aunt been in this nursing home for two years now they say medicaid want pay no more and they putting her out January 14 2017. I can not take care of my aunt what am I to do.I went to dfcs and apply myself I never heard anything back from them. please help me somebody

over 1 year ago, said...

in Oklahoma I'm being told my 87 yr old mother with dementia will have to pay 25% of her bill at [Name Removed]. they are a good facility. but myself and sister also on social security. she has been there since march 2013. can she be exempt from this 25% charge. governor falan of Oklahoma has messed with state budget. what are we to do? too many younger people that can work are on Medicaid. I've worked all my life and this is totally devastating.