Medicaid Benefits in Nursing Homes: What is and is Not Covered

Summary
For people who need full-time care and cannot live in their own homes or in assisted living, Medicaid offers a Nursing Home Medicaid program that will cover all the costs of residing in a nursing home including medical and personal care and room and board. Beneficiaries must be financially eligible, with income below a certain amount every month and limited assets and demonstrate that they require nursing-home-level care. On this page, we will summarize the Medicaid benefits available for those who need a nursing home.

 

 

What is Nursing Home Medicaid?

Designed for low-income Americans who need a high level of care because of age or chronic illness, Nursing Home Medicaid covers 100% of the costs of nursing home care. Nursing Home Medicaid is available in every state and is classified as an entitlement, which means anyone who is eligible (financially and medically) must be covered. It is important to note, however, that the level-of-care and financial requirements are not the same in every state, and eligibility gets even more complex when factors like marital status and assets are considered. Determine your or your loved one’s specific eligibility criteria here.

Unlike other Medicaid Long Term Care programs, Nursing Home Medicaid will fully cover the cost of rent or room and board.

 

Types of Medicaid that Cover Nursing Homes

Nursing home Medicaid is also called Institutional Medicaid and is available for eligible Americans in every state. Nursing Home Medicaid is different from the other forms of Medicaid long term care, specifically Medicaid Waivers and Aged, Blind, and Disabled Medicaid (ABD is also called Regular Medicaid). HCSB waivers and ABD Medicaid can cover the some but not all of the costs of medical and personal care services in a home or assisted living community, but not room and board.

Different states have different names for Medicaid (California’s is called Medi-Cal, Massachusetts is called MassHealth, Washington state’s is Apple Care, etc.). Eligibility is based on need, meaning which specific Activities of Daily Living a person cannot do on their own, and financial limitations like monthly income and countable assets.

 

Medicaid Benefits in Nursing Homes

For those who are assessed as needing Medicaid (and who qualify financially), all costs including room and board are covered. What follows are the services that must be provided at nursing homes and covered under the Medicaid Long Term Care benefit.

 Medicaid is Not for Short-Term Rehabilitation
Entering a nursing home for a limited time to recover after an injury, short-term disability, or illness is considered “rehab.” If someone needs to stay in a nursing home for 100 days or fewer, Medicare is typically the program that covers those costs.

 

Services Paid for by Medicaid in Nursing Homes

– Nursing and medical services: Very broadly, this means health care provided by a registered nurse to maintain as high a standard of living as possible. Examples of services a nurse would provide include intravenous therapies, wound dressing, pain control, and ostomy care.

– Medically related social services: In many communities, there are local resources that can help someone who needs nursing care, and Medicaid can help find those programs and get your loved one engaged in them. Medicaid will also cover counseling for emotional issues, which has been shown in studies as effective for helping nursing home residents.

– Assistance with acquiring and administering medications: As someone ages, unfortunately, the number of medications they need increases while it becomes harder to actually take those medicines. Medicaid considers help taking medications as one of the most important benefits.

– Meals to meet the dietary needs of each resident: Nursing Home Medicaid will cover the cost of serving your loved one foods that are healthy and considerate of dietary restrictions.

– Programs and activities: Social engagement is crucial for the mental well-being of people who need nursing-home-level care. Medicaid will pay for activities that are entertaining or engaging, to provide stimulation beyond merely meeting medical needs.

– Emergency dental services

– Routine hygienic items and services: The basics we all need to stay healthy and clean would be covered under Nursing Home Medicaid, including soap and items for bathing, brushing teeth, washing hands, trimming nails, etc.

 

Service Not Paid for by Medicaid in Nursing Homes

These are the services often received in nursing homes that typically will not be covered under Medicaid LTC (though different states have different coverages):
– A private room unless medically necessary
– Specially prepared food beyond what the kitchen can prepare
– Phone, TV, and radio
– Personal comfort items like tobacco or sweets
– Cosmetics or grooming items beyond what’s considered routine
– Clothes
– Personal reading materials
– Gifts
– Flowers or other plants
– Social events beyond the residential activity program
– Special care services not considered medical or necessary

 

What Happens to Income When They Enter a Nursing Home?

Beneficiary’s Income

While Nursing Home Medicaid beneficiaries are permitted to earn a certain amount of income each month, all of that income (except for a very small personal needs allowance) must be surrendered to the nursing home in which they are receiving care. If the beneficiary is married, some of their income may go to support their spouse provided that spouse is not also a Medicaid beneficiary and their spouse’s income is under a certain limit.

The “personal needs allowance,” or PNA in most states is between $50 and $200 per month.

The amount allowed to be transferred to a spouse depends on the year, the state in which they reside and the spouse’s income. Generally speaking, a spouse can be transferred up to approximately $3,435 per month in 2022, but that would only be for a spouse that had zero income of their own. Note this is a simplified view, actual transfers may take into consideration housing and utility costs and other state-specific nuances. More on spousal income transfer.

 

Spouse’s Income

A Medicaid applicant spouse’s income is not taken into consideration provided that spouse is not applying for Medicaid as well. The non-applicant spouse is allowed to retain all of their income. Again, some state-specific minor rules may impact a spouse’s income.

 

Understanding Family Supplementation

It is possible for family members to give additional money to their loved one in a nursing home to pay for services not covered by Medicaid. However, it’s important to be careful about how “Family Supplementation” is offered, because receiving additional money can affect Medicaid eligibility. For example, money given as a gift is usually considered “unearned income” and would affect how much gets paid as benefits from Medicaid. Simply put: Giving money as a gift is counter-productive because it will likely lessen the amount received from Medicaid. Even worse, it could affect eligibility to continue receiving Medicaid benefits. Gift recipients could even be disqualified from Medicaid.

Purchasing items and paying specific bills on your loved one’s behalf is less likely to impact benefits and eligibility than giving money, but it’s important to be clear on the rules in your state before doing so. Some states (including New York and Michigan) are strict about these kinds of payments, and they might provide fewer Medicaid benefits. Other states are called Family Supplementation States (Colorado and Illinois, for example) and have rules about how these gifts can be made so that Medicaid is not compromised.

The best option to give money to a loved one on Medicaid in a nursing home is called a supplemental needs trust (SNT). This is a legal financial arrangement for people who have a chronic illness or are over 65. SNTs are designed to provide a way to give your loved one financial help without affecting Medicaid eligibility. They do not get included among countable assets, but there are conditions. For example, SNT funds go directly to the nursing home, not your loved one, and pay for services and items that fall outside medical needs and are therefore considered “supplemental,” like clothes, transportation, and technology for entertainment purposes.

Nursing Home Medicaid will not pay for a private room unless it’s medically necessary. In some states, however, a loved one can provide family supplementation payments specifically to upgrade someone to a private room without affecting their Medicaid eligibility.

 States Allowing Family Supplementation
Family supplementation is allowed by Medicaid in the following states: Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Maine, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Tennessee, Texas, Utah, Virginia, Washington state, Wisconsin, and Wyoming.

 

Nursing Home Medicaid Eligibility

Eligibility requirements for Medicaid Long Term Care to cover nursing costs will vary by state and marital status. One can obtain their specific eligibility criteria here or read an article on Medicaid nursing home eligibility.

Generally, a person is assessed based on need and financial eligibility. Needs typically means they require a “nursing home level of care”, which is help with activities of daily living (ADLs). ADLs include eating, bathing, brushing teeth, and going to the bathroom. Someone who cannot perform ADLs cannot live independently. When someone applies for Medicaid LTC, a medical professional working with Medicaid will assess ADL abilities and other important health factors like cognition (thinking ability). Financial eligibility means that someone earns less than a certain amount every month (in most states in 2022 it’s $2,523) and has countable assets that are under a certain amount (often $2,000 but there are many exemptions).

 

Finding a Nursing Home that Takes Medicaid

 Medicaid beneficiaries cannot decide who provides them with care in the nursing home, but they can pick the nursing home where they’ll live.

Most nursing homes accept Medicaid, but they limit the number of “Medicaid beds,” meaning there is a cap on the number of residents they will accept who pay with their Medicaid LTC benefits. This is because people who pay privately pay more than those who pay through Medicaid. So, while the state must provide coverage for anyone who qualifies, the individual nursing homes do not have to admit these people if they don’t take Medicaid or have reached their cap on Medicaid beds. To find a nursing home that accepts payment through Medicaid Long Term Care, click here.