Does Medicaid Pay for Nursing Home Care? 2026 Rules and Limits

Yes. Medicaid pays for long-term nursing home care for people who need a nursing home level of care and meet their state’s income and asset limits, and it’s the largest payer of nursing home care in the US: more than 6 in 10 nursing home residents have Medicaid as their primary payer. Unlike Medicare, which covers only short rehab stays, Medicaid covers room, board, nursing and personal care for as long as you stay eligible. You’ll usually have to contribute most of your monthly income toward the bill and keep only a small personal needs allowance.

Nursing facility care is a mandatory Medicaid benefit for eligible adults, so there’s no program waiting list the way there is for assisted living waivers. The hard part is qualifying financially, especially for married couples and families with a home or savings. This guide walks through the 2026 numbers, what counts and what doesn’t, the 5-year look-back, estate recovery, and how to apply.

How much of nursing home care does Medicaid pay?

Nursing homes are expensive. According to the CareScout Cost of Care Survey, the 2025 national median was $315 a day ($114,975 a year) for a semi-private room and $355 a day ($129,575 a year) for a private room. Very few families can pay that for long, which is why Medicaid ends up paying for most long-stay residents.

Nursing home fact	Figure
Residents with Medicaid as primary payer	More than 60% (July 2024)
People living in nursing facilities	About 1.2 million (July 2024)
Federally certified nursing facilities	Nearly 15,000
Medicaid share of US institutional long-term care spending	44% of $147 billion (2023)
Median semi-private room cost	$315/day, $114,975/year (2025)
Median private room cost	$355/day, $129,575/year (2025)

Sources: KFF, 5 Key Facts About Nursing Facilities and Medicaid (2025); CareScout Cost of Care Survey 2025.

For a closer look at prices in your state, see our guide to how much a nursing home costs.

What Medicaid covers in a nursing home

Once you’re approved, Medicaid pays the nursing home’s Medicaid daily rate, minus the amount you contribute from your income (often called your “patient pay” or “share of cost”). That rate covers:

• A shared room (a private room only if medically necessary, or if you or family pay the difference where allowed)
• Meals, including special diets
• 24-hour nursing care and supervision
• Help with bathing, dressing, eating, toileting and mobility
• Medication administration
• Rehab therapy, social services and activities
• Basic medical supplies and laundry

Doctor visits, hospital stays and prescriptions are covered by Medicare first if you have it, with Medicaid filling gaps. Items like a private phone line, hair salon visits or personal clothing usually come out of your personal needs allowance.

Medicare vs Medicaid for nursing home care

This is the source of most confusion. Medicare and Medicaid both pay nursing homes, but for very different things.

	Medicare	Medicaid
Type of care	Short-term skilled nursing or rehab after a hospital stay	Long-term custodial and skilled care
Eligibility	Age 65+ or disabled; qualifying 3-day inpatient hospital stay; daily skilled need	Nursing facility level of care plus income and asset limits
How long	Up to 100 days per benefit period	As long as you remain eligible
Cost to you (2026)	$0 for days 1 to 20; $217/day for days 21 to 100; full cost after day 100	Most of your income, minus a personal needs allowance
Long-term custodial care	Not covered	Covered
Facility must be	Medicare-certified	Medicaid-certified

Source: CMS, 2026 Medicare Parts A and B Premiums and Deductibles fact sheet.

Many people use both: Medicare pays for the first weeks of rehab, then Medicaid takes over for a long-term stay. If you’re still in the Medicare phase, read does Medicare pay for nursing home care.

Medical and functional eligibility

Before income and assets matter, you must show you need a nursing home. States call this “nursing facility level of care” (NFLOC), and each state sets its own criteria and assessment tool. It usually means one or more of:

• Needing hands-on help with several activities of daily living (bathing, dressing, eating, toileting, transferring, mobility)
• Needing daily skilled nursing, such as wound care or tube feeding
• Significant cognitive impairment, such as moderate to advanced dementia, that requires supervision for safety

A doctor usually completes a form, and a state-approved assessor reviews it. Every applicant to a Medicaid-certified nursing home is also screened under the federal PASRR process for serious mental illness or intellectual disability, to make sure the setting is appropriate.

2026 income rules

States handle income in one of two broad ways for nursing home Medicaid.

Income cap states

About half the states set a hard income cap, usually 300% of the SSI federal benefit rate: $2,982 a month in 2026. According to ElderLawAnswers, income cap states include Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas and Wyoming.

If your income is over the cap, you aren’t automatically shut out. You can set up a Qualified Income Trust (Miller trust): income above the cap is deposited into the trust each month and used toward your nursing home bill. The trust must name the state as beneficiary for any money left when you die.

Medically needy (spend-down) states

Most other states let you “spend down” excess income on medical and care costs. In practice, if your income is less than the nursing home bill, you qualify, because your income goes toward your care and Medicaid pays the rest. Pennsylvania, for example, lets applicants with income above $2,982 deduct six months of anticipated nursing home costs as a medical expense to reach eligibility.

What happens to your income once you’re approved

Nearly all of your income goes to the nursing home each month, after these deductions:

• Personal needs allowance (PNA): a small monthly amount you keep
• Spousal allowance: income moved to a spouse at home (see below)
• Health insurance premiums, such as Medicare Part B or a supplement
• In some states, a short-term home maintenance allowance if you’re expected to return home

State	2026 nursing home personal needs allowance
Federal minimum	$30
Alabama (lowest)	$30
California	$35
New York	$50
Illinois	$60
Pennsylvania	$60
Georgia	$70
Texas	$75
Ohio	$75
Washington	$108.74
Arizona	$149.10
Florida	$160
Alaska (highest)	$200

Source: National Consumer Voice for Quality Long-Term Care, Personal Needs Allowance chart (2026).

Asset limits and exempt assets

The typical asset limit for a single nursing home applicant is $2,000, matching the SSI resource standard. Some states are higher. New York sets a much higher limit for its medically needy program, and California’s new Medi-Cal limit, starting January 1, 2026, is $130,000 for an individual and $195,000 for a couple.

Countable assets include cash, checking and savings, CDs, stocks, bonds and mutual funds, most IRAs and 401(k)s (rules vary by state), second homes and other real estate, and the cash value of some life insurance.

Usually exempt	Notes
Primary home	If equity is under the state limit ($752,000 to $1,130,000 in 2026) and you intend to return, or a spouse or dependent relative lives there
One vehicle	Usually regardless of value
Household goods and personal effects	Furniture, clothing, jewelry in most states
Burial plots and prepaid funeral	Irrevocable funeral contracts are generally exempt; burial funds may be capped
Small life insurance	Cash value often excluded below a small face value (for example, $1,500 in Pennsylvania)
Retirement accounts in payout status	Treated differently by state; some count only the income

Sources: CMS 2026 SSI and Spousal Impoverishment Standards; Pennsylvania DHS; state Medicaid manuals.

Two federal changes are coming. Starting January 1, 2028, a new federal home equity cap of $1,000,000 (not adjusted for inflation) will apply to non-farm homes, with exemptions when a spouse or a child under 21 or with a disability lives there. And starting January 1, 2027, retroactive Medicaid coverage for older and disabled applicants drops from three months to two months before the application month, so applying promptly will matter more.

2026 spousal impoverishment protections

When one spouse needs a nursing home and the other stays at home (the “community spouse”), federal rules stop the spouse at home from being left with nothing.

2026 spousal figure	Amount	What it means
Community spouse resource allowance (CSRA), minimum	$32,532	Least the spouse at home can keep in countable assets
CSRA, maximum	$162,660	Most the spouse at home can keep (unless a hearing or court raises it)
Minimum monthly maintenance needs allowance (MMMNA), from July 1, 2026	$2,705 (Alaska $3,381.25; Hawaii $3,111.25)	Minimum monthly income the spouse at home is allowed
Maximum MMMNA	$4,066.50	Cap on the spouse’s allowance in most cases
Excess shelter standard, from July 1, 2026	$811.50	Housing costs above this can raise the allowance
Home equity limit	$752,000 to $1,130,000	State-chosen limit; doesn’t apply if the spouse lives in the home

Source: CMS Informational Bulletin, 2026 SSI and Spousal Impoverishment Standards (April 27, 2026).

How it works in practice:

• Assets: Medicaid adds up both spouses’ countable assets as of the “snapshot” date (usually when the nursing home stay began). Depending on the state, the spouse at home keeps either half (within the min and max) or the full maximum. The rest must be spent down before the applicant qualifies.
• Income: The spouse at home keeps all income in their own name. If that’s below the MMMNA, part of the nursing home spouse’s income can be shifted to them.
• Exceptions: Either spouse can ask for a fair hearing to raise the allowance if there are exceptional circumstances.

The 5-year look-back and transfer penalties

Medicaid looks at every asset transfer made in the 60 months before your application. If you gave away money or property, or sold something for less than it was worth, Medicaid imposes a penalty period: a stretch of time when it won’t pay for your nursing home care.

The penalty is calculated with a “penalty divisor,” which is your state’s average monthly (or daily) private-pay nursing home cost:

Penalty period = value of gifts during the look-back ÷ state penalty divisor

For example, New York’s 2026 divisor for New York City is $15,282 a month. A $76,410 gift would trigger about a 5-month penalty. Crucially, the penalty doesn’t start when the gift was made. It starts when you’ve applied, are in the nursing home, and would otherwise be eligible, which is when you can least afford to pay.

New York region	2026 monthly penalty divisor
New York City	$15,282
Long Island	$15,193
Northern Metropolitan	$15,024
Northeastern	$14,783
Rochester	$15,675
Central	$14,146
Western	$13,765

Source: Littman Krooks, New York Medicaid Updates for 2026, citing NYS Department of Health figures.

Transfers that generally don’t cause a penalty include transfers to a spouse, to a child who is blind or permanently disabled, and (in the case of the home) to a “caregiver child” who lived in the home and provided care for at least two years, or a sibling with an equity interest. Planning tools like Medicaid-compliant annuities and certain trusts exist, but they’re technical and state-specific. Talk to an elder law attorney before you move any money.

Estate recovery

Federal law requires states to try to recover what Medicaid spent on nursing home care, home and community-based services and related hospital and drug costs for people who were 55 or older when they got the care. Recovery happens after death, from the person’s estate.

• Protections: States can’t recover while a surviving spouse is alive, or if there’s a surviving child under 21 or a child who is blind or disabled.
• Liens: For someone permanently institutionalized, states may place a lien on the home, but not while a spouse, a child under 21, a disabled child, or a sibling with an equity interest lives there.
• Hardship waivers: States must waive recovery when it would cause undue hardship, such as when the home is of modest value or is the family’s sole source of income.
• State options: According to KFF’s 2024 survey, 37 states also recover for optional services, and some states reach assets that pass outside probate.

How to apply for nursing home Medicaid: step by step

1. Confirm the nursing home accepts Medicaid. Ask whether it is Medicaid-certified and has a Medicaid bed available. Most nursing homes are certified, but not all, and some limit the number of Medicaid beds. You can check certification and quality ratings on Medicare’s Care Compare tool.
2. Get the medical assessment started. The doctor’s form and state level of care assessment, plus PASRR screening, are usually handled with the nursing home or hospital discharge planner.
3. Gather documents. ID, Social Security and Medicare cards, proof of citizenship, income statements, five years of bank and investment statements, deeds, vehicle titles, life insurance policies, funeral contracts, and any trust documents.
4. Calculate the spend-down. Work out countable assets (and the spouse’s share if married). Legitimate spending, such as paying the nursing home, paying debts, home repairs or an irrevocable funeral plan, can bring assets under the limit.
5. Set up a Miller trust if needed. In an income cap state, do this before applying if income is over $2,982 a month.
6. Submit the application. Apply online, by mail or at your county or state Medicaid office. In Pennsylvania, for example, you apply through COMPASS or your county assistance office. Many nursing homes have a business office that helps with paperwork.
7. Respond fast to requests. Caseworkers often ask for extra statements. Missing deadlines is a top reason for denial.
8. Ask for retroactive coverage. If you had unpaid nursing home bills in the months before applying and you were eligible then, request retroactive coverage (three months now, two months for older and disabled applicants from 2027).
9. Appeal if denied. You have the right to a fair hearing. Deadlines are short, so act quickly.

While an application is pending, many facilities will admit you as “Medicaid pending.” Ask the business office about their policy and get it in writing.

Finding a Medicaid nursing home and other options

If your loved one has dementia, compare a nursing home with a dedicated memory care setting first. Our memory care vs nursing home guide explains the differences, and how much memory care costs covers pricing. If needs are lighter, Medicaid may cover services in assisted living instead. See does Medicaid pay for assisted living and browse our assisted living directory.

Veterans and surviving spouses should also check VA benefits. VA can pay for nursing home care in some cases, and the Aid and Attendance pension can help with private-pay costs before Medicaid. See our VA Aid and Attendance guide.

Rules vary by state. Confirm current limits and procedures with your state Medicaid agency or local Area Agency on Aging before acting.

FAQs

Does Medicaid cover nursing home care indefinitely?

Yes, as long as you continue to meet medical and financial eligibility and renew your coverage. There’s no day limit like Medicare’s 100-day cap on skilled nursing.

Do I have to give the nursing home all my income?

Most of it. You keep a personal needs allowance (from $30 to $200 a month in 2026, depending on the state), money for health insurance premiums, and any allowance for a spouse at home. The rest goes toward your care, and Medicaid pays the difference.

What is the Medicaid asset limit for a nursing home in 2026?

In most states it’s $2,000 for a single person. Some states are higher, such as California ($130,000 from January 2026). Your home, one car, personal belongings and a prepaid funeral are usually exempt.

Will Medicaid take my house if I go into a nursing home?

Not while you’re alive if it’s exempt, and not while a spouse or dependent child lives there. After death, the state may try to recover costs from the estate, including the home, unless a protection or hardship waiver applies.

What happens to my spouse’s money if I need nursing home Medicaid?

Your spouse can keep a protected share of the couple’s assets, between $32,532 and $162,660 in 2026 depending on the state, plus their own income. If their income is low, part of yours can go to them, up to $4,066.50 a month in most cases.

Can I give money to my kids to qualify for Medicaid?

Gifts made within five years of applying trigger a penalty period when Medicaid won’t pay. The penalty is the gift amount divided by your state’s average nursing home cost. Get advice from an elder law attorney before gifting.

Do all nursing homes accept Medicaid?

No. Most are Medicaid-certified, but some are private pay only, and others limit Medicaid beds. If you may need Medicaid later, choose a certified facility and ask about its policy for residents who switch from private pay.

Does Medicaid pay for a private room in a nursing home?

Usually not. Medicaid pays for a semi-private room unless a private room is medically necessary, such as for infection control. Some facilities let families pay the difference.

Can I get Medicaid if my income is over the limit?

Often, yes. In income cap states, a Miller trust can hold income above $2,982 a month. In medically needy states, you can spend down excess income on care costs. In both cases, your income still goes toward the nursing home bill.

How long does a nursing home Medicaid application take?

Federal rules give states up to 45 days to decide most applications (90 days if disability must be determined), but complex cases often take longer. Applying early and answering requests quickly helps.

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Related guides

• Does Medicare pay for nursing home care?
• How much does a nursing home cost?
• Does Medicaid pay for assisted living?