Medicaid for Seniors & Long-Term Care
Medicaid pays for more long-term care than any other payer in the United States — including nursing home care, home-based services, and personal care assistance for qualifying seniors.
Medicaid pays for long-term care — Medicare does not
Many people assume that Medicare covers long-term care, but it does not — at least not for extended periods. Medicare covers short-term skilled nursing facility care after a qualifying hospital stay, but it does not cover the ongoing custodial care that most nursing home residents need. That gap is where Medicaid steps in. Medicaid pays for more than 60% of all nursing home residents nationally, making it the largest source of long-term care funding in the country by a wide margin.
Long-term care Medicaid is available to seniors and people with disabilities who have limited income and assets and who need a nursing facility level of care or its equivalent in a community setting. The eligibility rules for long-term care Medicaid are significantly different — and generally more stringent — than the rules for regular Medicaid health coverage, including both income limits and asset tests.
What long-term care services does Medicaid cover?
- Nursing facility care — 24-hour residential care in a certified nursing facility for individuals who need a nursing-level of care.
- Home and community-based services (HCBS) — Through waiver programs, states can provide services in home and community settings as an alternative to nursing facility placement.
- Personal care services — Assistance with activities of daily living (ADLs) such as bathing, dressing, eating, and mobility.
- Adult day health programs — Daytime care and supervision in a community setting for individuals who need monitoring and health services.
- Home-delivered meals and nutrition services — Some HCBS waivers include meal delivery for homebound seniors.
- Transportation — Non-emergency medical transportation and, through some HCBS waivers, community transportation.
- Hospice care — End-of-life palliative care for terminally ill individuals, coordinated with other Medicaid services.
Qualifying for long-term care Medicaid: two tests
Long-term care Medicaid has two key eligibility components: a functional component (you must need a nursing facility level of care) and a financial component (income and assets must be below state-specific limits).
Income limits for long-term care Medicaid are typically much lower than for standard Medicaid. For nursing facility care, income limits are often set around 300% of the SSI federal benefit rate — a specific dollar amount that is adjusted each year. Asset limits are typically very low as well, often around $2,000 for a single individual in most states, with higher protections available for married couples (see spousal protections below). Because rules vary substantially by state, it is critical to check with your state Medicaid agency or an elder law attorney for the exact thresholds in your state.
Asset limits and spend-down
States classify assets as either "countable" (which count toward the asset limit) or "exempt" (which do not). Commonly exempt assets include the primary home (subject to a federal home equity limit — which CMS updates annually and is typically several hundred thousand dollars — though states may set their limit at the federal floor or up to a higher federal ceiling), one vehicle, household goods and personal effects, and prepaid burial plans up to a certain value. Recipients with home equity above their state's limit may not qualify for long-term care Medicaid until the equity is reduced.
If your countable assets exceed the limit, you must spend down to the limit before Medicaid will begin paying for care. This means using those assets to pay for care or other allowable purposes until your countable assets fall below the state's asset limit. There is also a five-year lookback period for asset transfers — if you give away assets or sell them below fair market value within five years before applying for long-term care Medicaid, the state will calculate a penalty period during which Medicaid will not pay for care. Planning ahead — ideally several years in advance — is important for individuals who anticipate needing long-term care.
Federal law protects the at-home spouse
Federal law includes important protections designed to prevent the impoverishment of the community spouse — the spouse who is not receiving long-term care. The Community Spouse Resource Allowance (CSRA) allows the at-home spouse to keep a portion of the couple's countable assets above the individual limit. The specific CSRA amount varies by state, with federal minimum and maximum levels set annually.
Additionally, the Minimum Monthly Maintenance Needs Allowance (MMMNA) protects the community spouse's income. If the at-home spouse's own income falls below a certain threshold, the Medicaid recipient spouse's income may be diverted to the at-home spouse to bring their income up to the protected level. These protections help ensure that the healthy spouse can continue to live in the community with adequate resources while the other spouse receives Medicaid-funded care.
Home and Community-Based Services (HCBS) waivers
Many states offer Medicaid home and community-based services waivers as an alternative to nursing facility placement. These waivers — authorized under sections 1915(c) and 1115 of the Social Security Act — allow states to provide a wide range of supportive services to individuals who would otherwise qualify for nursing facility care but prefer to remain in their homes or communities.
HCBS waiver services may include personal care, home health aide services, adult day services, respite care for family caregivers, home modifications (such as wheelchair ramps and grab bars), assistive technology, and case management. States have significant flexibility in designing their HCBS programs, and available services vary considerably. One important caveat: HCBS waiver programs are capped, and waitlists are common in many states. If you or a family member needs these services, it is worth applying early even if you are not immediately in crisis.
PACE: an integrated care option for some seniors
The Program of All-Inclusive Care for the Elderly (PACE) is an integrated Medicare and Medicaid program available in many states for individuals who are age 55 or older, meet their state's nursing home level of care requirements, and can live safely in the community with PACE support. PACE programs provide comprehensive medical and social services through a coordinated team, often centered around an adult day health center, while allowing participants to continue living at home. PACE is jointly funded by Medicare and Medicaid and requires no separate premiums or cost-sharing for Medicaid-eligible participants.
Long-term care Medicaid rules are complex, and asset planning decisions made years before applying can significantly affect your eligibility. Consider consulting an elder law attorney before applying for long-term care Medicaid or making any asset transfers.