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

Summary
For people with limited financial resources who can’t live on their own, Nursing Home Medicaid will cover all the basic costs of living in a nursing home, including room and board and personal care. However, there are some nursing home services Medicaid won’t cover. There are also rules that limit family contributions, and Nursing Home Medicaid beneficiaries are required to give most of their income to the state. This page will summarize the benefits and rules of Nursing Home Medicaid.

 

 

What is Nursing Home Medicaid?

Designed for financially limited 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. As mentioned, this includes room and board, which is different than other Medicaid Long Term Care programs.

Nursing Home Medicaid is available in every state and is classified as an entitlement, which means applicants who meet the financial and medical eligibility requirements in their state are guaranteed by law to receive benefits. However, it’s important to note that not all nursing homes accept Medicaid, and those that do may not have any available spaces when you or your loved one is ready for nursing home care. So, just because you are guaranteed to receive nursing home coverage doesn’t mean you’re guaranteed a bed in any nursing home you choose.

It’s also important to remember that Medicaid’s financial and level-of-care requirements are not the same in every state, and they vary depending on your marital status and which of the three Medicaid Long Term Care programs you’re applying for. You can find the eligibility criteria for your situation by clicking here.

 

Medicaid Benefits in Nursing Homes

Nursing Home Medicaid will cover all of the essential costs associated with residing and receiving care in a nursing home.

Nursing Home Services Covered by Medicaid

  • 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.
  • Assistance acquiring and administering medications: Medicaid considers help taking medications as one of its most important nursing home benefits.
  • Programs and activities: Nursing Home Medicaid will cover some social activities and programs, which are crucial for the mental well-being of seniors in nursing homes.
  • 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.
  • Emergency dental services
  • Diet appropriate meals: Nursing Home Medicaid will cover the cost of serving you or your loved one foods that are healthy and considerate of your dietary restrictions.
  • Mental health services: Nursing Home Medicaid will cover some form of therapy for beneficiaries who are struggling with mental health issues.
  • Community social services: In many communities, there are local resources that can support nursing home residents in various ways, and Medicaid can help connect you or your loved one with those programs.

 

Nursing Home Services Not Covered by Medicaid

The following are services often available in nursing homes that are typically not covered by Nursing Home Medicaid, although the coverage rules do vary by state:

  • 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
  • Flowers or other plants
  • Social events beyond the residential activity program
  • Special care services not considered medical or necessary
 Medicaid Does Not Cover 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.

 

What Happens to Income When You Enter a Nursing Home?

Nursing Home Medicaid beneficiaries are expected to contribute a large portion of their monthly income to the state to help cover the cost of residing in a nursing home. The technical term for this monthly contribution is a monthly patient liability, and it’s also known as a share of cost, co-payment, or patient pay amount.

Nursing Home Medicaid beneficiaries are allowed to keep part of their income for certain allowances and deductions. These are:

  • Personal Needs Allowance – a small amount ($30 – $200/month) that Nursing Home Medicaid beneficiaries are allowed to keep for themselves and spend on things like clothes, haircuts, phones, books, gifts, etc.
  • Uncovered Medical & Remedial Expenses – any healthcare related expenses that are not covered by Medicaid can be deducted from your monthly patient liability, including Medicare and private health insurance premium payments, deductibles and co-insurance, dental expenses, hearing aids, eyeglasses and over-the-counter supplements and medicines.
  • Home Maintenance Allowance – the amount of this allowance can vary greatly by state, but it’s purpose is the same: to allow Nursing Home Medicaid beneficiaries maintain their home in their absence, for up to months. This money could be used for expenses like mortgage payments, property taxes, utility bills, homeowners insurance, etc.
  • Spousal Income Allowance – Nursing Home Medicaid beneficiaries who have a low-income, non-Medicaid spouse at home are allowed to keep part of their income to supplement their spouse’s income, which is known as a Monthly Maintenance Needs Allowance. As of July 1, 2024, this amount is between $2,555/month and $3,853.50/month depending on the state and the couple’s financial situation. For more on spousal protections, click here.
  • Family / Dependent Allowance – Nursing Home Medicaid beneficiaries who claim minor children, adult children, parents or siblings on their tax return (or their spouse claims them on their return), can use part of their monthly income to support those family members. The amount of the allowance varies by state and situation.

 

Spouse’s Income

Spouses of Nursing Home Medicaid beneficiaries are not expected to give any of their income to the state to help cover the cost of care for their spouse. What’s more, your spouse’s income will not count against the income limit when you are applying for Nursing Home Medicaid, as long as your spouse is not applying as well.

 

Understanding Family Supplementation

Nursing Home Medicaid beneficiaries can receive financial help from family members to enhance, or “supplement,” their existing Medicaid coverage in states that allow Family Supplementation. If done correctly, this financial help will not count against the Medicaid beneficiary’s income limit. Done incorrectly, contributions from family members could be counted as income and lead to ineligibility.

Nursing Home Medicaid beneficiaries most commonly use Family Supplementation to upgrade from a semi-private to a private room. Family Supplementation can also be used to pay for goods and services offered by the nursing home but not covered by Medicaid, like cable television.

Family Supplementation payments should not be made directly to the Medicaid beneficiary because that would likely be treated as income, even if it was used to supplement Medicaid coverage. The payments could be made directly to the nursing home without affecting Medicaid eligibility, but it might impact the Medicaid beneficiary’s Supplemental Security Income (SSI), if they have any. The contributions won’t affect SSI or Medicaid eligibility if family members use a third-party Supplemental Needs Trust to make their financial contributions.

 Proceed with Caution: Follow your state’s rules carefully when it comes to Family Supplementation, otherwise your family’s contributions could be counted as income and potentially cause you to lose your benefits.

 

Nursing Home Medicaid Eligibility

To qualify for Nursing Home Medicaid, applicants have to meet certain financial and functional (medical) requirements. These requirements vary by state and marital status, but we can speak in general times about the criteria.

  • The functional or medical requirement for Nursing Home Medicaid is needing a Nursing Facility Level of Care (NFLOC), but how a NFLOC is defined and measured can vary from state to state. Most definitions focus on the applicant’s ability to complete the Activities of Daily Living – mobility, bathing, dressing, eating and toileting. In some states, applicant’s who need hands-on help with two of those activities may be considered to need a NFLOC, while other states may require the applicant to need help with three of them. In most cases, states will conduct an in-person assessment to see if applicants meet their definition of NFLOC, but the nature of these assessments and the tests used to complete them are not the same from state to state, either.
  • The financial requirement is broken down into an income limit and an asset limit. In most states in 2024, the Nursing Home Medicaid income limit for an individual applicant is $2,829/month and the individual asset limit is $2,000. This changes for married couples, and it also can vary widely by state. In California, for example, there is no income or asset limit for Nursing Home Medicaid. In Illinois, on the other hand, the individual income limit is $1,255/month and the asset limit is $17,500, effective from April 2024 to March 2025. After that, they may change again.

To find the financial requirements for your situation and state, click here.

 

Finding a Nursing Home that Takes Medicaid

After being approved for Nursing Home Medicaid, you or your loved will need to find the nursing home that best meets your needs and accepts Medicaid. As we mentioned above, not all nursing homes take Medicaid, and those that do may not have any available spaces.

It can be a challenge to find the right nursing home, especially if you’re looking in a specific location. You can use Nursing Home Compare to find and compare nursing homes in your state. It’s a search tool administered by the Centers for Medicaid & Medicaid Services that has detailed information about more than 15,000 nursing homes across the country. The search can be filtered by nursing homes that accept Medicaid and those that do not, and the site also has data on health inspections, staffing and overall rating.