How Much Does Medicaid Pay for Long-Term Care or Nursing Home Care?

Summary
Medicaid will pay for all nursing home costs for eligible seniors, but it also takes almost all of the senior’s monthly income to help cover those costs. What Medicaid will pay for long-term care in the community is more complicated. It depends on medical needs, location and available Medicaid programs. Plus, the true cost of both types of care is hidden since Medicaid will seek reimbursement of long-term care expenses paid after a beneficiary dies.

How Much Medicaid Pays for Long-Term Care in Nursing Homes and At Home

Medicaid pays for long-term care in nursing homes and in the community for seniors who meet the financial and functional eligibility criteria via the following programs: Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers, and Aged, Blind, and Disabled (ABD) Medicaid.

Nursing Home Medicaid

Nursing Home Medicaid will pay for nursing home expenses for financially limited seniors who require a Nursing Facility Level of Care. Coverage includes payment for room and board and all necessary medical and non-medical goods and services. Nursing Home Medicaid is an entitlement, which means all applicants are guaranteed to receive benefits without wait. However, not all nursing homes accept Medicaid, and those that do may not have space available when you or your loved one is applying. So even though eligible Nursing Home Medicaid applicants are guaranteed coverage, they are not guaranteed a place in any nursing home they choose.

Nursing Home Medicaid beneficiary’s must give almost all of their income to the state to help cover the nursing home expenses. They are only allowed to keep a “personal needs allowance,” which ranges from $30-$200/month depending on the state. They can also keep enough of their income to make Medicare premium payments if they are “dual eligible,” and enough to make any Medicaid-approved spousal income allowance payments to financially needy spouses who are not Medicaid applicants or recipients.

The amount Nursing Home Medicaid beneficiaries pay to the state can sometimes be called “share of cost.” If a beneficiary has no income, Medicaid will pay 100% of nursing home costs.

HCBS Waivers

In general, Medicaid’s Home and Community Based Services (HCBS) Waivers will pay for long-term care services and supports for financially limited seniors who require a Nursing Facility Level of Care but live in their home, the home of a loved one or somewhere else in the community, such as an assisted living residence, adult foster homes or a memory care unit for seniors with Alzheimer’s and other dementias. While HCBS Waivers can pay for long-term care benefits in these settings, they will not cover room and board costs, such as mortgage payments, rent, facility fees, utility bills or food expenses.

HCBS Waivers benefits can include in-home nursing and physician services, home modifications, meal delivery, medication management, Personal Emergency Response Systems and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting). These availability of these benefits will depend on the state, the specific HCBS Waiver program and the individual needs and circumstances of the individual, which will be evaluated by the state.

In most cases, HCBS Waivers beneficiaries are allowed to keep all of their income so they can afford to live in the community. However, if an HCBS Waiver beneficiary lives in a state-funded assisted living residence, for example, they may be asked to give some of their income to the state to help cover the cost of long-term care and/or the residence.

Unlike Nursing Home Medicaid, HCBS Waivers are not an entitlement. Instead, most HCBS Waivers programs have a limited number of enrollment spots. Once those spots are full, additional eligible applicants are placed on a waitlist.

Aged, Blind, and Disabled Medicaid

Aged, Blind, and Disabled (ABD) Medicaid provides healthcare coverage and long-term care benefits to financially limited people who are aged (65 and over), blind or disabled and live in the community. ABD Medicaid can sometimes be referred to as regular Medicaid for seniors, but it should not be confused with the regular Medicaid that is available for financially limited people of all ages.

Seniors who show a medical need for long-term care services and supports can have some of them paid for by ABD Medicaid. These benefits can include in-home nursing services, meal delivery, medication management, adult day care and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting). The amount and types of benefits depends on the individual needs and circumstances of the individual, as well as the availability of care providers in their area. These benefits can be delivered in multiple settings depending on the state and program (such as the beneficiary’s home, the home of a loved one, assisted living facilities, adult foster homes, etc.), but ABD Medicaid will not pay for room and board costs in any of those settings, such as mortgage payments, rent, facility fees, utility bills or food expenses.

Like Nursing Home Medicaid, ABD Medicaid is an entitlement. However, eligible ABD Medicaid applicants are only guaranteed basic healthcare coverage, they are not necessarily guaranteed long-term care services and supports. The availability of those benefits may also depend on the programs, caregivers and funds that are available in the beneficiary’s location.

 

How Medicaid Recovers Costs through the Estate Recovery Program

Following the death of a nursing home beneficiary or an individual 55+ years old who is not institutionalized, Medicaid can seek reimbursement of long-term costs for which it paid via Medicaid’s Estate Recovery Program (MERP). If the deceased has no remaining assets, the Medicaid agency cannot collect any reimbursement. However, it is common for one to leave behind a home, and often via one’s home, Medicaid is reimbursed. However, with careful planning one can implement Medicaid planning strategies to protect assets from MERP. It is recommended one contact a Certified Medicaid Planning Professional to inquire about options. Implementing a planning strategy incorrectly can result in Medicaid ineligibility. Note that MERP is prohibited if the deceased beneficiary has a surviving spouse, minor child (under 21 years old), or a child who is blind or disabled. More on Medicaid’s Estate Recovery Program.