Medicaid and nursing homes: how coverage works

Medicaid is the largest payer of long-term nursing home care in the United States. It is available only to people who meet both a medical eligibility and a financial eligibility test — but it pays for custodial care that Medicare does not.

What Medicaid covers

For eligible residents, Medicaid covers nursing facility services in participating facilities, including custodial care (help with daily living), which is the part Medicare excludes. Most, but not all, nursing homes in this directory are certified to accept Medicaid.

Medical eligibility

States generally require that the person needs a nursing-facility level of care — assessed by the state's functional assessment, not by the facility. Contact your state Medicaid agency for the assessment.

Financial eligibility

Limits on income and countable assets are set by each state, within federal rules. A home is often not counted if a spouse still lives there, subject to an equity limit. Some income can be diverted to a community spouse; 2026 federal rules set the minimum and maximum monthly maintenance needs allowance for spouses. Because the numbers change yearly and vary by state, always check with that state's Medicaid office before planning.

The five-year look-back

When you apply, states review five years of asset transfers. Gifts and below-market sales made in that window can cause a period of ineligibility, calculated by dividing the transferred value by the state's average daily nursing home rate. Keep records of every large transaction. Some transfers are exempt (for example, to certain family members or for fair-market value).

Spend-down and planning

If income or assets are slightly above the limit, a "spend-down" (medical expense deduction) process may allow eligibility. An elder-law attorney can explain state options — but beware of advisors who suggest hiding assets, which can itself trigger penalties.

How to apply

Apply through the state Medicaid agency or the county office, not the nursing home (the facility can help with paperwork). Start before assets are exhausted; processing can take weeks. Once approved, a redetermination is usually required annually.

Written and maintained by the US Nursing Homes data team · last reviewed 2026-10-24 · sources and methodology.