Paying for Nursing Home Care

ON THIS PAGE: What You Should Know | For More Information

If you're thinking about nursing home care, you probably wonder how much it costs -- and how you will pay for it. You probably already know that nursing home care is expensive. The average cost is close to $50,000 a year. Like many people, you may think Medicare pays for it,  but unfortunately it dosen't. Medicare covers only short periods of skilled nursing home care after a hospital stay. So how do people manage the cost of nursing homes?



Many have private long-term care insurance.


Almost a third pay all the costs out of their own pockets.


Many receive help from Medicaid, the government health care safety net program for lower-income people or those impoverished by high medical expenses.


Many nursing home residents pay the full cost of their care when they are admitted, but they deplete their savings and other assets paying for care and then qualify for Medicaid.

What You Should Know

Medicaid is funded and regulated by both federal and state governments. As a result, Medicaid rules are different from state to state. This fact sheet provides general information on minimum benefits and requirements set by federal law. It is important for you to learn your state's specific requirements.

What does Medicaid pay for?


Medicaid will pay the part of your nursing home costs that your own income doesn't cover. In most states, you cannot keep more than $30 to $50 a month for personal needs.


Medicaid will cover all your nursing home care as well as some basic needs, such as toiletries and over-the-counter medications. It will not pay for clothing.


Medicaid will pay for prescription drugs and some other services not paid for by Medicare.

The bottom line:

Medicaid coverage of long-term care varies by state. Learn your state's rules.

As a Medicaid beneficiary, will I be treated the same as if I paid out of my own pocket? You have a right to the same basic care and services that private pay residents receive. However, the federal government and a majority of states let nursing homes restrict the number of people they serve who are eligible for Medicaid so you could have a problem finding a Medicaid placement. Nevertheless, the law guarantees Medicaid beneficiaries certain rights.


Nursing homes:


Cannot make you agree to pay privately for care for a period of time before you apply for Medicaid or make a "donation" in order to be admitted.


Cannot require a third party (for example, a son or daughter) to guarantee to pay for your care.


Cannot make you pay privately for any services or products that are covered by your state's Medicaid program.


To qualify for Medicaid, generally you must:


Have $2,000 or less in savings and other assets. Some assets are not counted, such as your home or a burial fund.


Meet the income requirements set by the state. You may also qualify for Medicaid if your income is higher than this limit but your nursing home bills and medical expenses exceed it.


Undergo a screening to make sure you meet the state's medical and functional criteria for nursing home care.


To use Medicaid, you must be in a nursing home that accepts Medicaid. Most, but not all, nursing homes do.


Can I be forced to sell my home if I get Medicaid?

Your state is required to recover money from your estate to cover what it spent on your nursing home care. Therefore, the state may place a lien on your home. However, it cannot require you to sell your home while you are living if there is a reasonable chance you will go back there, or if you have a living spouse or dependents. Ask a lawyer, the long-term care ombudsman, (see "For More Information" below), or your local Medicaid office for details about your state's laws and practices on "Medicaid estate recovery."

Should I try to protect my assets or give some of my money to relatives before I qualify for Medicaid? You may have heard of people giving their assets to relatives or using legal loopholes to qualify for Medicaid without "spending down" their savings. Congress has closed most of the loopholes, and there are penalties for improperly transferring assets. Unfortunately, the law sometimes punishes good deeds.

If you are considering giving money or other assets to help out a family member -- for example, to buy a new home or finance a college education -- your gift could affect your eligibility for Medicaid. If the gift occurs within three years of the date you apply for Medicaid, the amount you give away could be considered assets you should have spent toward your care.

Consult a qualified financial advisor or an attorney trained in "elder law" if you are considering protecting assets through a trust or another means, or giving some of your assets to others.

What will my spouse live on if I'm in a nursing home on Medicaid? If you are married, you can ensure that your spouse's resources are protected to the maximum extent allowed by the law. If you're considering Medicaid, it is important to know your state's policies on spousal protection.



Your spouse can keep at least $1,382 a month in income, though your state may allow him or her to keep up to the federal maximum of $2,049.


Your spouse can keep between $16,392 and $81,960 in assets (in addition to your home and some other assets).


Your state cannot force you to sell your home while your spouse or dependent children are living, if they do live in the home.


For More Information

The long-term care ombudsman is an advocate for all nursing home residents. The ombudsman in your state or local community can inform you about your Medicaid rights and help with any problems you have.

State and local agencies on aging also can provide information about eligibility and residents´ rights in your state. You can obtain Medicaid information from your local or state Medicaid agency.

For the phone numbers of these offices in the state or area in which you want Medicaid assistance, call the Eldercare Locator, 1-800-677-1116, Monday through Friday, 9 a.m. - 11 p.m. Eastern time.

Web Resources

Health Care Financing Administration (HCFA)

HCFA is the federal agency that oversees Medicaid. Its Web site has information about rights and services covered by Medicaid.

You can also find where to go for state Medicaid information.

Legal Services Corporation

Legal Services offices can inform you about Medicaid rights and help you resolve Medicaid problems. You can locate the nearest you on their website.

National Academy of Elder Law Attorneys (NAELA)

NAELA has prepared a guide, Questions & Answers When Looking for an Elder Law Attorney, for individuals who are considering hiring an attorney. URL:


Long Term Care Return                            Top Return
Long Term Care Return             Top Return