Medicaid Long-Term Care: What Is It and What’s Covered?

Medicaid long-term care offers essential financial support for people with limited income who need ongoing care and assistance with daily activities due to aging, disabilities, or chronic illness.

Unlike regular care under Medicaid, long-term care focuses on both medical services and nonmedical assistance. Medicaid long-term care can help cover the costs of assistance with activities of daily living (ADLs) such as bathing, dressing, eating, using the toilet, and moving around safely. It may also cover services such as housekeeping, transportation, and accessibility adjustments in the home (e.g. grab bars in the bathroom, wheelchair lift installation, widened doorways, etc.).

Medicaid long-term care participants may receive financial assistance to cover the cost of care services in a variety of settings. These may include the person’s own home or the home of a loved one, an assisted living facility, a nursing home, and more. However, care coverage at specific settings varies by state, so it’s important to check with your state’s Medicaid long-term care program.

In all states, nursing home care and home health care are entitlement programs under Medicaid, meaning that all eligible individuals will qualify. Medicaid offers three different long-term care programs targeting different care needs.

Nursing Home Medicaid

Medicaid provides financial assistance for people who need full-time care and supervision in a nursing facility. To qualify for this long-term care program, your loved one must meet the Nursing Facility Level of Care (NFLOC) requirement. Each state has its own assessment tools and specific criteria to determine whether a person needs the level of care provided at a nursing home. Financial eligibility requirements are also set at the state level, so it’s important to check with your state’s Medicaid programs to understand if your loved one may qualify.

Medicaid coverage for nursing home care typically includes room, board, medical services, and personal care. This may be the best Medicaid program for your loved one if they have advanced dementia, Alzheimer’s, severe mobility issues, or complex medical needs that require round-the-clock attention. However, it’s important to know that Medicaid coverage is only available for care provided at Medicaid-certified nursing homes.

Aged, Blind, and Disabled (ABD) Medicaid

This program provides coverage for long-term care services to people with disabilities who are 65 or older. To qualify for this program, your loved one will need to meet specific income and asset criteria determined by the state where they live. In addition to medical care, supplies, and equipment, this program may also cover services such as personal care assistance, day health programs, or case management to help coordinate care. However, services covered by this program vary by state.

Depending on your loved one’s needs, ABD Medicaid can provide services at home, in an assisted living facility, or in another community-based setting (such as an adult day care center). This allows people to remain as independent as possible while receiving the support they need.

Home and Community-Based Services (HCBS) waivers

This Medicaid program provides waivers to people to receive long-term care services in their homes or other community settings rather than in a nursing home. Community settings include assisted living facilities, adult day care centers, or group homes.

The level of care covered under this program varies depending on the state and the person’s needs. However, covered services can include personal care assistance, meal delivery, transportation, and home modifications such as wheelchair ramps or grab bars.

Read more:Does Medicaid Pay for Assisted Living?

Let our care assessment guide you

The services covered by each state’s Medicaid long-term care program vary. Some of the different services you can expect to be covered include:

• Assistance with ADLs
• Full-time medical care in a nursing home
• Medical equipment and supplies
• Meal preparation or delivery services
• Case management
• Home modifications
• Respite care
• Transportation to medical appointments, grocery stores, or community events

Medicaid is designed to help low-income individuals pay for their healthcare needs. To qualify for Medicaid long-term care, an applicant must meet medical requirements (such as needing the level of care that a nursing home can provide) and financial requirements (income and asset limits). Specific eligibility requirements for long-term care coverage vary by state and the type of Medicaid program.

Medical requirements

One of the main criteria for receiving Medicaid long-term care is to demonstrate the need for constant medical attention and assistance with ADLs. Individuals who receive long-term care through Medicaid must be 65 or older or have a permanent disability.

In order to qualify for Medicaid long-term care, your loved one must require the same level of care as someone in a nursing home according the criteria set by the state where they live. Each state uses tools to assess a person’s ability to perform essential day-to-day tasks and how much assistance they need for essential functions.

Financial requirements

There are also financial criteria for people who apply for Medicaid. In order to qualify, a person’s assets and income must not exceed specific limits dictated by their state.

Income limits: Medicaid has set income thresholds, which are based on the applicant’s monthly income. For people applying for long-term care, income limits may range from about $1,000 to $3,000 per month, depending on the state.^[01] Income requirements also differ depending on the long-term care program. For example, in Florida, a resident who’s single must earn less than $2,901 per month to qualify for Nursing Home Medicaid or less than $1,105 per month for ABD Medicaid.

Asset limits: Applicants must have limited countable assets to qualify for Medicaid. For Nursing Home Medicaid or HCBS Waivers, this limit is $2,000 for a single person in most states ($3,000 to $4,000 for couples). However, not all assets count toward this limit. Here are some assets that do not generally count toward the asset limit for Medicaid long-term care:

• The primary residence
• Vehicles
• Personal belongings
• Term life insurance policies
• Long-term care policies

How to become eligible for Medicaid through Medicaid “spend down”

In many cases, older adults may have income above the Medicaid threshold yet still find themselves in need of public assistance due to high medical costs. Several states address this through a Medicaid “spend down,” which allows individuals to reduce their countable income by subtracting allowable medical expenses.^[02] By lowering their countable income, these individuals may become eligible for Medicaid long-term care. This may also be referred to as the medically needy pathway to Medicaid eligibility.

For example, a single person might receive $2,000 each month in income but live in a state that requires Medicaid recipients to have a monthly income below $1,200. If their state has a Medicaid spend-down program, they could qualify for Medicaid by spending $785 each month on medical expenses, including prescription drugs, doctor copays, and long-term care costs.

Spend-down periods vary by state and may be anywhere from one month to six months in length. After an individual spends down to their state’s medically needy income limit, they’re eligible for Medicaid for the rest of the period (as long as they meet all other criteria). It’s important to track and document all medical expenses if your loved one is considering a Medicaid spend down.

If your family member is planning to apply for Medicaid, it’s a good idea to contact your state medical assistance office and an estate planning attorney for more details.^[03]

Can someone have long-term care insurance and Medicaid?

Yes, a person can have private long-term care insurance and Medicaid. In fact, many states offer partnerships for long-term care that combine public assistance with private insurance. That said, in most states, Medicaid will only cover costs that aren’t paid by the private insurance. It’s also important to note that certain types of long-term care insurance policies may affect eligibility for Medicaid, as they may be included an individual’s income and asset levels.

Medicaid is a type of health insurance. As with other health insurance, the insured person must pay some amount of money toward the care they receive.

Even after financial and medical criteria to receive Medicaid long-term care are met, individuals must pay a portion of their income towards medical care. This is known as “patient liability”. Patient liability is similar to the co-pay or co-insurance that people who have private insurance must pay. Generally, people eligible for Medicaid must spend most of their own money on long-term care expenses. That said, there are some allowable deductions for essential personal needs, dependents, and home maintenance. These vary by state.^[04] For example, in Florida, the Medicaid personal needs allowance is $160 per month, but in Alaska, this allowance is $200.

So, while Medicaid will generally cover all of the costs of long-term care, the coverage is not free, as patients are still required to pay some percentage of their income.

As a needs-based healthcare program, there is no set limit on the period of time a person can receive long-term care with Medicaid. As long as your loved one qualifies for a Medicaid long-term care program, they will continue receiving coverage. However, eligibility must be maintained over time, which means individuals must continue to meet medical and financial requirements.^[02]

Medicaid will periodically reassess people to ensure they still qualify for the program. So, any changes in income, assets, or care needs could impact eligibility for Medicaid coverage.

Talk with a Senior Living Advisor

As with most government programs, applying for Medicaid long-term care can be a complex and arduous process. Let’s take a look at some of the main steps.

Step 1: Determine which Medicaid program is the right choice

Medicaid offers various long-term care programs, such as Nursing Home Medicaid, ABD Medicaid, and HCBS waivers. Review the services available in your state and evaluate your loved one’s care needs to decide which program best suits them.

Step 2: Review the Medicaid eligibility requirements

To qualify for Medicaid long-term care, your loved one must meet medical and financial requirements. Assess their income, assets, and level of care needs. If you’re unsure, consult a Medicaid planner or estate law attorney for assistance.

Step 3: Gather necessary documentation

Once you’ve determined which long-term care program to apply for, prepare all the paperwork required for the Medicaid application process. The exact process and types of documentation individuals need depend on the state, but these are the general requirements:

• Proof of income (pay stubs or Social Security benefits statement)
• Asset documentation (bank statements, deeds, titles, proof of life insurance)
• Medical records demonstrating care needs and limitations with ADLs
• Personal identification (birth certificate, passport, driver’s license, Social Security card)
• Power of attorney documentation

Step 4: Submit the Medicaid application

Each state has its own Medicaid application form. In most cases, the most hassle-free option will be to submit online, but applications can also be submitted by mail or in person through the state’s Medicaid office or local Department of Health and Human Services. Be sure to complete all sections of the application accurately and attach any supporting documents.

Step 5: Wait for approval

After submitting the application, Medicaid will review it to determine if your loved one qualifies. Legally, Medicaid offices must review applications and notify individuals within a set number of days. In most cases, Medicaid must send out determination letters within 45 days. That said, if the applicant is applying for long-term care based on a disability, this timeframe is increased to 90 days.

You can only receive Nursing Home Medicaid coverage in a facility that is Medicaid-certified. Unfortunately, not all nursing homes accept Medicaid, so it’s crucial to ensure the facility your loved one chooses participates in the program. Even if your loved one qualifies for Medicaid long-term care, they may not be able to immediately move into a nursing facility, as availability in Medicaid-certified facilities can be difficult to find.

Once approved for a program, secure a spot in a Medicaid-eligible care facility or arrange for home and community-based services for your loved one. Keep in mind that in many states, Medicaid-eligible facilities have long waitlists due to high demand. While in theory all qualifying individuals are entitled to Medicaid long-term care, it may not be possible to receive care immediately.

Tips for finding a long-term care facility with Medicaid

• Contact the state Medicaid office: They can help connect you with long-term care communities that accept Medicaid and provide helpful resources.
• Ask the right questions: Verify if communities accept Medicaid, how many beds or units are Medicaid-eligible, if there’s a waiting list, and what happens if eligibility changes later.
• Tour communities: Schedule virtual or in-person tours to compare options and get a feel for community life.
• Use a checklist: Download A Place for Mom’s community touring checklist. This free resource suggests questions to ask and helps compare communities based on budget, care needs, observations, and preferences.
• Involve all decision-makers: Include your loved one, if possible, and any family members involved in the decision.
• Prepare documentation: Gather medical records, diagnoses, medication lists, and doctors’ notes. If your loved one is in the hospital, a case manager can often send these directly to facilities.

If you’re looking for guidance finding care for an aging loved one, A Place for Mom’s Senior Living Advisors can help you find options that match your loved one’s needs and budget. While A Place for Mom does not refer families who are using public pay options like Medicaid to cover senior living services, an advisor can recommend a short-term stay at an assisted living facility or temporary home care to help you through a Medicaid spend down period.