Medicaid pays for nursing home care, but only after you've spent down most of your assets and only at facilities that accept Medicaid

Medicaid does cover nursing home care in all 50 states, but the coverage comes with strict conditions. You must have limited income and assets — the exact limits vary by state, but most states allow you to keep between $2,000 and $3,000 in countable assets before Medicaid will pay. Medicaid pays the nursing home directly, not you. The facility must be certified to accept Medicaid patients, which most are, but not all.

The key difference from Medicare: Medicaid is a needs-based program for people with low income and few assets. Medicare is insurance you've paid into through payroll taxes and covers a limited stay (up to 100 days) only after a hospital stay. If you're thinking about long-term nursing home care, Medicaid is usually the program that will eventually pay for it — but you may need to spend your savings first.

Key Takeaways

  • Medicaid covers the full cost of nursing home care once you meet income and asset limits, which requires spending down savings in most cases.
  • Your state sets the exact asset and income thresholds, and some states count certain assets (like a home or car) differently than others.
  • The nursing home must be Medicaid-certified; you can ask the facility directly whether it accepts Medicaid before admission.
  • Medicaid typically requires you to contribute your monthly income toward the cost of care, leaving you a small personal allowance for other expenses.
  • Planning ahead with an elder law attorney can sometimes protect assets through legal structures, but waiting until after admission makes this much harder.

What counts as an asset when Medicaid calculates your may be able to access

Medicaid looks at your total countable assets on the day you apply. Countable assets include bank accounts, stocks, bonds, investment property, and vehicles beyond one. Non-countable assets — the ones Medicaid ignores — typically include your primary home (up to a certain equity limit, usually $884,750 in 2024, though this varies by state), one vehicle, personal belongings, and life insurance with a face value under $1,500.

The rules around what counts are state-specific and can be complex. Some states count a second vehicle; others don't. Some count the equity in your home if it exceeds the limit; others place no limit on home equity at all. Your state's Medicaid office publishes these rules, but an elder law attorney in your state can tell you quickly what applies to your situation. This matters because if you're just over the limit, the difference between what your state counts and doesn't count can mean years of self-pay before Medicaid takes over.

How the spend-down process works

If your assets exceed your state's limit, you must spend them down to that threshold before Medicaid will pay. This doesn't mean spending recklessly — it means using the money for legitimate expenses: paying off debt, making home repairs, buying a car, paying for medical care, or prepaying your own funeral. Medicaid has a list of allowed spend-down uses, and your state's rules determine which ones count.

The spend-down can happen before you enter the nursing home or after. If you enter first and then apply for Medicaid, the facility may require you to pay out of pocket until you've spent down to the limit. Some facilities will work with you on a payment plan during this period; others will not. This is why timing matters: if you know nursing home care is coming, consulting an elder law attorney before admission can sometimes structure your assets in ways that preserve more for your family while still meeting Medicaid's rules.

One important rule: you cannot simply give away assets to your children or others to become Medicaid-may be able to access faster. Medicaid looks back five years (in most cases) at transfers you've made. If you gave away $100,000 to your daughter three years ago, Medicaid will count that as an asset you still have and delay your coverage. The penalty period is calculated by dividing the amount transferred by your state's average monthly nursing home cost.

What Medicaid actually pays for in the nursing home

Medicaid covers room and board, meals, nursing care, medications, therapy (physical, occupational, speech), medical equipment, and activities. It does not cover items the facility considers "personal" — things like a private room upgrade, cable television, phone service, or beauty salon services. Some facilities bundle these into their daily rate; others charge separately. Before admission, ask the facility which items are covered by Medicaid and which you'll pay for out of your personal allowance.

Your personal allowance — the money you keep each month for clothing, toiletries, haircuts, and other personal needs — is set by your state and typically ranges from $30 to $75 per month. Medicaid takes your monthly income (Social Security, pensions, etc.) and applies most of it to the nursing home bill. The remainder, after the facility's cost is covered, becomes your personal allowance. If your income doesn't cover the full cost of care, Medicaid makes up the difference.

How income affects what you pay

Medicaid counts your monthly income: Social Security, pensions, annuities, rental income, and interest. It does not count certain income like Supplemental Security Income (SSI) in some states or certain veteran benefits. Your state's Medicaid program will tell you which income sources count.

Here's how the payment works: if your monthly Social Security is $2,000 and the nursing home's Medicaid rate is $8,500 per month, Medicaid pays the facility $6,500 and you contribute $2,000. You keep a small personal allowance (set by your state, usually $30 to $75) from your income, and the rest goes to the facility. If your income is very low, Medicaid covers the full cost and you still receive your personal allowance.

Some states have "income caps" — a maximum monthly income you can have and still be Medicaid-may be able to access for nursing home care. Other states use "income-related" rules where they don't deny you based on income alone but instead require you to contribute all income above the personal allowance to the cost of care. Your state's Medicaid office can tell you which rule applies where you live.

Finding a Medicaid-certified nursing home

Not every nursing home accepts Medicaid. Some facilities are private-pay only. Before you or a family member is admitted, confirm that the facility is Medicaid-certified and that it currently has Medicaid beds available. You can search for certified facilities through your state's health department website or by calling your state's Medicaid office directly.

When you contact a facility, ask three things: (1) Is it Medicaid-certified? (2) Does it currently have Medicaid beds available? (3) What is the daily Medicaid rate, and what items are covered versus charged separately? Some facilities have long waiting lists for Medicaid beds even though they're certified. Others accept Medicaid but charge extra for certain services. Getting these answers before admission prevents surprises later.

Planning ahead to protect assets

If you know nursing home care may be in your future, an elder law attorney can review your situation and sometimes structure your assets in ways that are legal under Medicaid rules. This might include setting up an irrevocable trust, purchasing a Medicaid-compliant annuity, or restructuring your home ownership. These strategies work only if done well before you need care — usually at least five years ahead — because of Medicaid's look-back period.

If you're already in a nursing home or applying for Medicaid now, asset protection strategies are much more limited. The five-year look-back means recent transfers will trigger a penalty. An elder law attorney can still review your situation, but the options narrow significantly once care has begun. This is why planning early, even if you're in your 60s and healthy, can make a real difference for your family.

Frequently Asked Questions

Will Medicaid pay for a private room in the nursing home?

Medicaid covers a semi-private room (shared with one other resident). If you want a private room, you pay the difference between the semi-private and private rate out of your personal allowance or other funds. Some facilities don't offer private rooms at all, so ask before admission.

What happens to my house if I'm on Medicaid and in a nursing home?

Medicaid does not force you to sell your home to pay for nursing home care. Your primary home is not counted as an asset for Medicaid purposes, though there are limits on home equity in some states. However, after you pass away, your state's Medicaid program may try to recover costs from your estate, which could include a claim against your home. An elder law attorney can explain your state's recovery rules and whether planning can protect your home for your heirs.

Can I switch nursing homes if I'm on Medicaid?

Yes. Your Medicaid coverage follows you to any Medicaid-certified facility. If you want to move, contact your new facility to confirm it has a Medicaid bed available, then notify your current facility of your move date. Medicaid will continue paying the new facility once the transfer is complete.

Does Medicaid cover assisted living or memory care instead of a nursing home?

Most states do not cover assisted living through regular Medicaid, though some offer limited coverage through special waivers. Memory care (dementia-specific care) is usually only covered if it's provided within a Medicaid-certified nursing home, not in a standalone assisted living facility. Ask your state's Medicaid office about waiver programs in your area, as these vary widely.

What if I don't have enough assets to spend down but too much income to may have access to?

Some states allow you to use a "Miller Trust" (also called an income cap trust) to set aside income above the state's limit, making you Medicaid-may be able to access while protecting some of your monthly income for other expenses. This is a complex strategy that requires an elder law attorney and only works in certain states. Ask your state's Medicaid office whether this option exists where you live.