Does Medicaid Cover Nursing Home Care? (2026)

The Two Eligibility Tests for Medicaid Nursing Home Coverage

To qualify for Medicaid nursing home coverage, applicants must pass both a functional/medical need test and a financial need test. Both must be satisfied simultaneously.

The functional test requires a clinical determination that the applicant needs help with at least 2 activities of daily living (ADLs) such as bathing, dressing, eating, toileting, transferring, or continence. A physician assessment or nursing evaluation typically establishes this level of care requirement.

The financial test in 2026 has two components: income and assets. In most states, the income limit is 300% of the SSI Federal Benefit Rate, which works out to $2,982 per month for a single applicant in 2026 (the FBR is $994/month). Even if income exceeds this threshold, medically-needy or spend-down programs in some states allow applicants to qualify after spending excess income on medical costs.

• Asset limit (single): $2,000 in most states
• Asset limit (married couple, both applying): $3,000 in most states
• California exception (2026): $130,000 single / $195,000 married
• New York exception: $33,038 single / $44,796 married (2026)
• Home equity limit: $752,000 in most states (primary home is generally exempt while applicant or spouse lives there)

Spousal Protections: The Community Spouse Rules

When one spouse enters a nursing home and applies for Medicaid, federal law requires that the spouse remaining at home (the community spouse) be protected from poverty. These spousal impoverishment rules set minimum floors on both assets and income that cannot be counted against the nursing home applicant.

The Community Spouse Resource Allowance (CSRA) is the amount of assets the at-home spouse is allowed to keep. For 2026, the federal minimum CSRA is $32,532 and the maximum is $162,660. States may choose to use figures within that range. The Minimum Monthly Maintenance Needs Allowance (MMMNA) protects the community spouse's monthly income. In 2026, the federal MMMNA floor is $2,643.75 per month, with a maximum of $4,066.50 per month.

These protections mean the at-home spouse does not lose everything just because a partner enters a nursing home. If the community spouse's income falls below the MMMNA floor, income from the institutionalized spouse can be diverted to the community spouse to bring them up to the minimum.

The 60-Month Look-Back Period and Penalty Rules

When you apply for Medicaid nursing home coverage, the state reviews all financial transactions (asset transfers, gifts, and sales) made in the 60 months (5 years) prior to your application date. This is the look-back period. Transfers made below fair market value during that window are flagged as potentially improper asset transfers.

If a disqualifying transfer is found, Medicaid imposes a penalty period during which no nursing home benefits are paid. The penalty period is calculated by dividing the value of the improper transfer by the average monthly private-pay nursing home rate in your state. Gifting $60,000 in a state with a $6,000/month rate would produce a 10-month penalty period, for example.

Important exceptions apply. Transfers to a spouse, to a blind or disabled child, or to a caregiver child who lived in the home for at least 2 years are exempt from the look-back. California is implementing its look-back gradually, reaching 30 months (not 60) by July 2028. New York has no look-back for Community Medicaid (HCBS).

Medicaid Estate Recovery: What Happens After Death

Federal law (42 U.S.C. 1396p) requires every state to operate a Medicaid Estate Recovery Program (MERP). After a Medicaid long-term care recipient dies, the state must seek reimbursement from the estate for the cost of care paid on their behalf after age 55. In practice, this most often means a claim against the deceased's home when it is eventually sold.

Recovery is deferred (postponed) while a surviving spouse is still alive, while a child under age 21 is living, or while a blind or permanently disabled child is living. States may also defer recovery for a sibling or adult caregiver child who lived in the home. Once deferral conditions no longer apply, the state can file its claim.

Planning strategies exist to reduce or avoid estate recovery, including the use of irrevocable trusts, life estates, and other legal tools. Consulting a Medicaid-certified elder law attorney before applying is strongly advisable when significant assets like a home are involved.

Medicare vs. Medicaid: What Each Actually Covers

Medicare and Medicaid both interact with nursing home care, but in very different ways. Understanding the distinction prevents the most common and costly planning mistake: assuming Medicare will pay long-term.

Medicare Part A covers skilled nursing facility (SNF) care only after a qualifying 3-day inpatient hospital stay. Coverage is 100% for days 1-20 of each benefit period, then $217/day coinsurance for days 21-100 in 2026, and zero after day 100. Skilled care means medically necessary services like physical therapy, wound care, or IV medications. The moment care becomes custodial (help with ADLs only, no active skilled therapy), Medicare stops.

Medicaid covers custodial care indefinitely. That is the defining difference. Most long-term nursing home residents start on Medicare (for post-hospital rehab) and transition to Medicaid once skilled care ends and they cannot pay privately. Dual-eligible beneficiaries (enrolled in both Medicare and Medicaid) get the strongest protection: Medicare pays for the skilled phase, Medicaid picks up custodial care with no time limit.

HCBS Waivers: The Nursing Home Alternative

Home and Community-Based Services (HCBS) Medicaid waivers allow states to provide nursing-home-level services to people in their own homes, assisted living facilities, or community settings instead of institutional nursing homes. 47 states and DC operate at least one HCBS 1915(c) waiver program, though eligibility rules vary and many programs have waiting lists.

HCBS waivers often have more generous financial eligibility rules than nursing home Medicaid, particularly around asset limits. Income limits may also differ. Services covered commonly include personal care attendants, adult day health programs, home modifications, respite care, and care coordination. If nursing home placement is not yet required, an HCBS waiver may fund care at home for significantly less public cost.

Does Medicaid cover 100% of nursing home costs?

Yes, for eligible residents. Once approved for Medicaid nursing home coverage, the resident pays almost all of their income toward the cost of care (this is called the patient pay amount or share of cost), and Medicaid pays the balance directly to the nursing facility. The resident typically keeps a personal needs allowance of $30 to $100 per month depending on the state.

What is the income limit for Medicaid nursing home in 2026?

In most states, the income limit is 300% of the SSI Federal Benefit Rate, which equals $2,982 per month for a single applicant in 2026. Some states use a medically-needy spend-down pathway for people above this limit. A few states (like New York) have different income rules. Your state Medicaid agency has the exact current limit.

Can I keep my house if I go on Medicaid in a nursing home?

Generally yes, while you are alive. Your primary home is typically exempt from Medicaid asset counting if a spouse, minor child, or blind or disabled child lives there. However, after death, the state may file an estate recovery claim against the home. Home equity must be under $752,000 in most states. Planning tools like life estates or irrevocable trusts can protect the home.

How much can a spouse keep if the other goes on Medicaid?

Federal law protects the community spouse (the one not in the nursing home). In 2026, the community spouse can keep between $32,532 and $162,660 in assets depending on the state's rules (the Community Spouse Resource Allowance). The community spouse is also protected to keep at least $2,643.75/month in income (the MMMNA minimum for 2026).

How long does the Medicaid look-back period last?

In 49 states, the look-back period for nursing home Medicaid is 60 months (5 years). California is an exception, gradually implementing a 30-month look-back between 2026 and 2028. New York has no look-back for its community-based HCBS program. Any asset transfers below fair market value during the look-back window can trigger a penalty period.

What is the difference between Medicare and Medicaid for nursing homes?

Medicare covers only short-term skilled nursing care after a hospital stay, up to 100 days per benefit period (with $217/day coinsurance for days 21-100 in 2026). Medicare does not cover custodial care. Medicaid covers long-term custodial nursing home care indefinitely for eligible residents. Most people who need nursing home care long-term end up on Medicaid.

Can I get Medicaid nursing home coverage if I have too much income?

Possibly, through a spend-down or income cap trust. In states with medically-needy programs, applicants can spend their excess income on medical bills each month until income reaches the Medicaid limit (this is the spend-down). In income-cap states, a Miller Trust (Qualified Income Trust) can redirect excess income so it does not count against eligibility. Rules differ significantly by state.

Can I get home care instead of a nursing home through Medicaid?

Yes. Most states operate Home and Community-Based Services (HCBS) Medicaid waiver programs that fund personal care, adult day services, and other supports at home or in assisted living settings instead of a nursing home. Financial eligibility for HCBS waivers is often more generous than for nursing home Medicaid. Many programs have waiting lists, so applying early matters.