Nursing Home Medicaid: How Medicaid Pays for Long-Term Care

According to the American Health Care Association, nursing home Medicaid is the biggest payor of long-term nursing home care in the United States, providing approximately half of all nursing home residents. The economic driver of this dependency is harsh. In 2025, the median monthly stay at a semi-private nursing home room was $9,555, and this amount is increasing over time, ranging from $5,808 in Texas to $32,220 in Alaska. The cost of memory care is $11,000+ per month. The total cost of a senior who has to stay in a nursing home for 2.5 years (the average duration of stay) without Medicaid coverage can be over $250,000. For dementia or memory care, this time frame is often 5-10 years, with total costs of $500,000 or more. In most states, the income maximum for a single person in a nursing home to qualify for Medicaid is $2,982 a month (up from $2,901 in 2025), and the asset limit for most states is $2,000.

This guide provides information about nursing home Medicaid eligibility, coverage, the application process and the different coverage provided by Medicare. Data from Medicaid.gov, CMS and state Medicaid programs.

What nursing home Medicaid covers

For those who qualify for nursing home Medicaid, benefits generally cover most of the services provided at a skilled nursing facility. Federal law mandates that every Medicaid facility that participates in the Medicaid program provide services for nursing, medical care, room and board, meals, basic personal care, medicines, rehabilitative services (such as physical and occupational therapy and speech-language pathology), social services, and activities programming designed to keep each resident as physically and mentally active as possible.

There's no official time limit on nursing home Medicaid coverage. Care is covered by Medicaid indefinitely, as long as the eligibility requirements are met. This differs significantly from Medicare that will only pay for a maximum of 100 days of skilled nursing after a qualifying 3-day hospital stay. Days 1-20 are covered once Medicare has paid $1,736 in 2026 toward its Part A deductible, then the days 21-100 will have a $217 copay per day, after day 100 there will be no coverage.

Medicaid will only cover the cost of a shared room, unless there is documentation that a private room is medically necessary. There are some states that permit a "family supplementation" option where family members may pay additional fees for a family member to upgrade to a private room. Some other states determine that family supplementation is a disqualifying gift and will end Medicaid coverage. Confirm your state's regulations prior to making any supplementation arrangements.

See our pillar guide for more information about Medicaid eligibility.

2026 nursing home Medicaid income limits

Most states use the “300% of the Federal Benefit Rate” formula for income eligibility when applying to nursing home Medicaid. For 2026, this calculates to $2,982 per month for single applicants (up from $2,901 in 2025). Married couples where both spouses apply for Medicaid can have combined income up to $5,964 per month.

Other states have more stringent income requirements or other methods for qualifying. Two-thirds of States use the hard cap of $2,982/month. The remaining one-third is available for the Medically Needy Pathway, which means that if a person's income is more than $2,982 they can become eligible through "spending down" their over income on medical costs. The 32 Medically Needy Pathway states are: Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and the District of Columbia.

Under the strict income-cap states, if your monthly income is above $2,982 by one dollar, you must use a Qualified Income Trust otherwise you will not be eligible. The trust is given surplus income monthly with the state being the residual beneficiary. There is a flow of funds through the trust to enable persons with higher income to be considered as eligible.

See our Medicaid spend down guide for income spend-down strategies.

2026 nursing home Medicaid asset limits

Most states have an asset threshold of $2,000 for those applying for nursing home Medicaid as an individual. State variations range from $1,600 (Connecticut), to $4,000 (Mississippi), to $17,500 (Illinois), $33,038 (New York), and $130,000 (California - re-instated as of January 1, 2026 after being removed in 2024-2025).

Some assets are not included in the calculation. Your main residence will be exempt up to a certain amount of equity, generally $730,000 – $1,071,000, depending on your state. One vehicle (no matter how much its worth) is exempt. There is no limit on household furnishings, personal effects or money spent on a funeral up to $1,500 to $15,000 (depending on State) that is exempted. When you have a retirement account in income distribution mode (RMD), they may only include the income, not the principal balance.

If both spouses do not need nursing home care, but one does, then the Community Spouse Resource Allowance (CSRA) is in place to safeguard the spouse at home. In 2026, the CSRA can be as high as $162,660, with a minimum of $32,532. Some states have lower CSRA caps: South Carolina: $66,480, Illinois: $143,172 (HCBS waiver) and Washington: $72,529 (HCBS waiver).

The Minimum Monthly Maintenance Needs Allowance (MMMNA) is to protect the income of the community spouse. If they have below the state MMMNA (up to $4,066.50 per month for 2026), they are able to retain some of the income of the applicant spouse prior to the income being used to pay for nursing home expenses.

The Personal Needs Allowance (PNA)

Nursing home Medicaid beneficiaries must contribute nearly all of their monthly income toward care costs, with the state covering the difference between the resident's payment and the facility's negotiated Medicaid rate. The beneficiary keeps only a small Personal Needs Allowance (PNA) for non-care expenses.

PNA amounts vary significantly by state in 2026. The federal minimum is $30 per month, set in 1988 and never adjusted for inflation. Most states set higher PNAs but they remain modest. Pennsylvania's PNA is among the lowest at $45 per month. Florida sets the PNA at $160 per month. Some states reach $200 per month for the maximum. The PNA covers personal items like toiletries, clothing, magazines, phone services, and small comforts.

Beyond the PNA, beneficiaries can also deduct Medicare premiums (typically $202.90 for Part B in 2026), private health insurance premiums, and certain medical expenses not covered by Medicaid from their patient liability.

For 2026, Medicare premium costs and how they interact with Medicaid for dual eligibles, see our Medicare vs Medicaid bridge guide.

The 5-year look-back period

Federal law requires nursing home Medicaid to look back 60 months (5 years) when reviewing applications. Any asset transfers or gifts made within this look-back period below fair market value can create a penalty period of Medicaid ineligibility. California's previous 30-month look-back is phasing back to 60 months starting January 1, 2026.

The penalty period is calculated by dividing the gift amount by your state's average monthly nursing home cost (the "penalty divisor"). For example, gifting $100,000 in a state with $10,000 monthly nursing home costs creates a 10-month penalty period. Pennsylvania's 2026 penalty divisor is $421.20 per day, meaning a $50,000 gift creates approximately 119 days (about 4 months) of ineligibility.

Exceptions exist for certain transfers. The Caregiver Child Exception allows transferring the home to an adult child who lived in the home and provided care for at least two years that delayed nursing home placement. The Sibling Exception allows transfer to a sibling with equity interest who lived in the home for at least one year before institutionalization. Transfers between spouses are unlimited and don't trigger penalties.

For comprehensive planning strategies, see our Medicaid planning and Medicaid planning attorney guides.

How to apply for nursing home Medicaid

The application process involves multiple steps and significant documentation. First, confirm the applicant requires a Nursing Facility Level of Care (NFLOC) through a clinical assessment, typically conducted by your state's Medicaid agency or a designated assessor. NFLOC determinations require functional limitations in activities of daily living (bathing, dressing, eating, toileting, transferring, continence) and/or cognitive impairment requiring 24-hour supervision.

Gather extensive financial documentation: bank statements for the past 60 months (the look-back period), tax returns for the past five years, all retirement account statements, real estate deeds, vehicle titles, life insurance policies, documentation of any large gifts or transfers during the look-back period, and Medicare cards plus any current health insurance information.

Apply through your state Medicaid agency. Most states accept applications online through state portals (California's BenefitsCal, Pennsylvania's COMPASS, Illinois's ABE, etc.), by phone, by mail, or in person at local Medicaid offices.

Application processing typically takes 30-45 days for MAGI Medicaid categories and up to 90 days for disability-based or long-term care applications requiring additional verification.

For state-specific guides, see our Medicaid California, Medicaid Pennsylvania, and Medicaid Illinois guides.