Medicaid pays for nursing home care if you meet income and asset limits, live in a facility certified to accept Medicaid, and have exhausted most of your savings first. The process involves proving financial need, choosing a participating facility, and submitting medical documentation. Each state runs its own program with different limits and rules, so what works in one state may not work in another.

Key Takeaways

  • Medicaid requires you to spend down your assets to a state-set limit (often $2,000 to $3,000) before the program begins paying for nursing home care.
  • Your monthly income must fall below your state's threshold, though some income is disregarded and your spouse's income is treated separately.
  • You must live in a nursing home licensed as a skilled nursing facility and enrolled in your state's Medicaid program.
  • The application process requires proof of citizenship, residency, income, assets, and medical need, and can take four to eight weeks to process.
  • Your state Medicaid office, not the nursing home, makes the final decision about coverage, though the facility can help you gather documents.

Understanding the Asset and Income Limits

Medicaid uses a spend-down requirement to determine whether you can receive coverage. You must reduce your countable assets to your state's limit before Medicaid will pay. Most states set this limit between $2,000 and $3,000 for a single person, though a few states allow slightly more. Countable assets include bank accounts, stocks, bonds, and real estate you own (with some exceptions). Your home is usually not counted if you live there, and a car used for transportation is typically excluded.

Money you spend on allowed expenses counts toward the spend-down. Allowed uses include paying medical bills, funeral costs, home repairs, property taxes, and — importantly — paying the nursing home directly. Many people use this period to prepay for care or to transfer assets to a spouse who is not entering a facility. Your state Medicaid office can tell you which expenses count in your state.

Income limits vary by state but typically range from $2,000 to $3,500 per month for a single person. Your income includes Social Security, pensions, wages, and rental income. However, Medicaid disregards the first $20 to $65 of unearned income each month (the amount depends on your state), and some work-related income is also excluded. If you are married and only one spouse is entering the nursing home, your spouse's income and assets are treated separately under spousal impoverishment rules, which protect the community spouse from losing everything.

How Spousal Impoverishment Rules Protect Your Spouse

If you are married and entering a nursing home, your spouse does not have to become impoverished to help you pay for care. Medicaid's spousal impoverishment rules allow your spouse to keep a portion of your combined assets and income. The exact amounts vary by state, but your spouse can typically keep between $24,000 and $128,520 in assets (as of 2024), depending on your state's rules.

Your spouse can also keep their own income without limit. If your spouse's income is below the state's minimum maintenance need (usually $1,500 to $3,000 per month), they may receive part of your income to reach that threshold. This means your spouse is not forced to choose between paying for your care and having money to live on. Your state Medicaid office calculates these amounts when you apply.

Choosing a Nursing Home That Accepts Medicaid

Not every nursing home accepts Medicaid, and not all that do accept it for new residents. You must choose a facility that is both licensed as a skilled nursing facility (SNF) and enrolled in your state's Medicaid program. A skilled nursing facility provides medical care under a doctor's supervision, which is different from assisted living or independent senior housing. Your doctor, hospital discharge planner, or local Area Agency on Aging can help you find facilities in your area that accept Medicaid.

Before you move, confirm directly with the nursing home that they accept Medicaid and that they have a bed available for a Medicaid-funded resident. Some facilities accept Medicaid but have a waiting list or limit the number of Medicaid residents they admit. Ask whether the facility will hold your bed while your Medicaid application is being processed — this is important because approval can take several weeks. Get the facility's Medicaid provider number and the name of the admissions coordinator; you will need this information when you apply.

What Medical Documentation You Need

Medicaid requires proof that you need nursing home care, not just assisted living or home care. Your doctor must complete a medical assessment stating that you need skilled nursing services — such as wound care, medication management, physical therapy, or monitoring for a serious condition. The assessment should explain why you cannot safely live at home or in a less restrictive setting. This is called the level of care information.

Your state may use a specific form for this assessment, which your doctor's office can obtain from the nursing home or your state Medicaid office. Some states require the assessment to be done by a Medicaid-contracted nurse or physician, not just your personal doctor. The nursing home can often arrange this evaluation, but the decision about medical need comes from your state, not the facility. If your state denies your application based on level of care, you have the right to request a hearing to challenge the decision.

The Application Process and Timeline

You apply for Medicaid through your state's Medicaid office, not through the nursing home. You can apply in person, by mail, or online through your state's portal — check your state Medicaid website for the method and location. You will need to provide proof of citizenship (birth certificate, passport, or naturalization papers), proof of residency (utility bill or lease), Social Security number, and documentation of all income and assets (bank statements, investment statements, property deeds, and recent pay stubs).

The application process typically takes four to eight weeks, though some states are faster and others slower. During this time, you can move into the nursing home and begin care. Most facilities will bill you directly while your application is pending, and once Medicaid approves your case, the program pays the facility retroactively to your move-in date. Ask the nursing home about their policy on holding your bed and billing during the waiting period. Some facilities require a deposit or may provide that you will pay out-of-pocket until Medicaid approves.

After Medicaid approves your case, you will receive a notice stating your approval date and the monthly amount Medicaid will pay the facility. Your state will also send you information about your rights and responsibilities as a Medicaid recipient. If your application is denied, the notice will explain why and tell you how to request a hearing to appeal the decision.

What Happens to Your Income and Assets After Approval

Once Medicaid approves your case, your monthly income goes to the nursing home to pay for your care. Medicaid pays the facility directly for the difference between your income and the facility's Medicaid rate. Most states allow you to keep a small personal needs allowance (usually $30 to $75 per month) for items like toiletries, clothing, and entertainment. The exact amount varies by state.

Your assets must remain below the state limit. If your assets grow above the limit — for example, through an inheritance or a tax refund — you must report this to Medicaid and spend the excess down again. Medicaid can also recover money it paid for your care from your estate after you die, though most states exempt your home and some other assets from recovery. Ask your state Medicaid office about estate recovery rules in your state, especially if you have a home you want to pass to your heirs.

Planning Ahead: Medicaid Planning and Look-Back Periods

Medicaid has a look-back period that examines your financial transactions for a set number of months before you apply. If you gave away money or assets during this period without receiving fair value in return, Medicaid may impose a penalty period during which it will not pay for your care. The look-back period is typically 60 months (five years) for most transfers, though some transfers have different rules.

Common transfers that trigger penalties include giving money to family members, paying off someone else's debt, or transferring property below market value. However, some transfers are allowed without penalty — for example, giving your home to your spouse or to a child who lived in the home and provided care. If you are thinking about transferring assets before applying for Medicaid, speak with an elder law attorney in your state first. They can explain the rules and help you avoid unintended penalties.

Frequently Asked Questions

Can the nursing home refuse to admit me if I am waiting for Medicaid approval?

No. Federal law prohibits nursing homes from denying admission based on your source of payment, including pending Medicaid. However, the facility can require you to pay out-of-pocket during the waiting period and can require a deposit or may provide of payment. Once Medicaid approves, the program pays retroactively to your move-in date.

What if my state denies my Medicaid application?

You have the right to request a hearing before an administrative judge. The hearing notice will explain the reason for denial and how to request one. Common reasons for denial include exceeding income or asset limits, not meeting the level of care requirement, or failing to provide required documentation. An elder law attorney can help you prepare for the hearing.

Can I keep my home if I am on Medicaid for nursing home care?

Yes. Your primary residence is not counted as a countable asset for Medicaid purposes. However, your state may place a lien on your home to recover money it paid for your care after you die, unless you have a spouse or dependent child living there. Check your state's rules about estate recovery.

What if my spouse needs to stay in the community while I am in the nursing home?

Spousal impoverishment rules protect your spouse's income and assets. Your spouse can keep their own income without limit and can keep a portion of your combined assets. If your spouse's income is below the state minimum, they may receive part of your income. Your state Medicaid office calculates these amounts during your application.

Do I have to use all my savings before Medicaid pays?

Yes, you must spend down your assets to your state's limit. However, you can spend money on allowed expenses like medical bills, home repairs, funeral planning, or paying the nursing home directly. You cannot simply give the money away without triggering a penalty period. Ask your state Medicaid office which expenses count toward spend-down in your state.