How Much Does Medicaid Pay for Nursing Home Care?

Medicaid is a joint federal and state program providing health coverage to low-income individuals and families, including those with substantial medical needs. It is a primary payer for nursing home care across the United States. Medicaid’s role extends to covering a range of long-term services and supports, encompassing institutional and community-based care.

Medicaid Eligibility Requirements for Nursing Home Care

Qualifying for Medicaid nursing home care involves meeting specific medical necessity and financial criteria. An individual must demonstrate a need for the level of care typically provided in a nursing facility. This medical assessment determines if the applicant needs skilled nursing care or supervision, evaluating their ability to perform daily activities, medical conditions, and cognitive status.

Financial eligibility is determined by evaluating an applicant’s income and assets. For single individuals, income limits for nursing home Medicaid are generally around $2,901 per month in many states for 2025. All income sources are considered, including Social Security benefits and pensions. If an individual’s income exceeds this threshold, some states offer eligibility pathways through “Medically Needy” programs or “Qualified Income Trusts” (Miller Trusts).

A Qualified Income Trust allows individuals with income above the Medicaid limit to deposit excess income into a special irrevocable trust. Funds in this trust are not counted towards the income limit. The trust must typically name the state Medicaid agency as the beneficiary for any remaining funds upon the individual’s death, up to the amount of Medicaid benefits paid.

Asset limits also apply, with single individuals generally permitted to have countable assets up to $2,000 in most states. Some states have higher limits, such as New York, which allows a single applicant up to $32,396 in countable assets in 2025. Countable assets include bank accounts, investments, and most real estate beyond the primary residence.

Certain assets are exempt from these limits. A primary residence is generally exempt if the applicant or their spouse lives in it, or if there is an intent to return home, often with an equity limit (e.g., $730,000 in 2025 for some states). One vehicle, personal belongings, household furnishings, and irrevocable burial trusts are also commonly exempt.

When one spouse requires nursing home care and the other remains in the community, spousal impoverishment provisions prevent the community spouse from becoming financially destitute. The Community Spouse Resource Allowance (CSRA) permits the non-applicant spouse to retain a portion of the couple’s combined countable assets. In most states, this allowance can be up to $157,920 in 2025.

The Minimum Monthly Maintenance Needs Allowance (MMMNA) allows a portion of the institutionalized spouse’s income to be transferred to the community spouse if their income falls below a certain threshold. The federal minimum MMMNA for 2025 is $2,643.75 per month, with a maximum of $3,948 per month, though specific amounts vary by state.

Medicaid employs a “look-back” period to review financial transactions preceding an application. This period is typically 60 months, or five years, immediately before an individual applies for nursing home Medicaid. During this time, Medicaid scrutinizes all asset transfers to determine if any assets were gifted or sold for less than fair market value.

Uncompensated transfers made during the look-back period can trigger a penalty period, during which Medicaid will not cover nursing home costs. The length of this penalty period is calculated by dividing the total value of the uncompensated transfer by the average monthly cost of private nursing home care in the state at the time of application.

Applicants generally need to provide extensive documentation to demonstrate eligibility. This includes financial records like bank statements, investment statements, and income verification. Medical records are also necessary to prove the need for a nursing facility level of care.

Calculating the Resident’s Share of Nursing Home Costs

Once determined eligible for Medicaid nursing home care, individuals typically contribute most of their income towards the cost. This contribution is often called “patient liability” or “share of cost.” Medicaid then covers the remaining balance of the nursing home’s approved rate.

Several deductions are allowed from the resident’s total income before patient liability is calculated. One deduction is the Personal Needs Allowance (PNA). This small, fixed monthly amount is what the nursing home resident keeps for personal expenses. While the federal minimum PNA is $30 per month, states can allow a higher amount, ranging up to $200 per month.

Additional deductions from the resident’s income include premiums for health insurance, such as Medicare Part B and Part D. Any medical expenses not covered by Medicaid or other insurance sources can also be deducted.

If there is a community spouse, a portion of the institutionalized spouse’s income may be allocated if the community spouse’s income falls below the Minimum Monthly Maintenance Needs Allowance (MMMNA) threshold. The remaining income after these deductions is then paid directly to the nursing home by the resident as their share of cost.

The Medicaid Application and Payment Process

Applying for Medicaid nursing home care begins with obtaining application forms. These are typically available through state Medicaid agencies, local departments of social services, or online portals. Applicants can submit these forms online, by mail, or in-person.

The application requires comprehensive financial, medical, and personal documentation, including detailed records of income, assets, and medical assessments. The agency reviews these materials to verify the information provided.

An interview with a Medicaid caseworker may be required. The caseworker may ask for additional information or clarification regarding submitted documents. The agency verifies the accuracy of all presented information.

Processing times for Medicaid applications vary, but federal law suggests a determination within 45 days for most applicants, or 90 days if disability is a factor. Actual processing times can sometimes exceed these guidelines. Applicants receive official notification of the decision.

If an application is denied, individuals have the right to appeal the decision. The notification letter outlines the steps for initiating an appeal.

Upon approval, Medicaid payments for nursing home care are generally made directly to the facility on behalf of the resident. The facility receives Medicaid reimbursement in addition to the resident’s calculated patient liability.

Ongoing requirements exist for Medicaid recipients in nursing homes. Residents or their representatives must report any changes in income, assets, or living circumstances to the Medicaid agency.