Medicaid Long-Term Care: Nursing Home Eligibility, Assets, and Income Rules

Medicaid long term care is the part of Medicaid that pays for help with daily living when someone can no longer manage alone. It covers nursing home stays with no end date, and in most states it also pays for care at home through waiver programs or PACE.

To get it, a person has to pass two tests. The first is medical: the state must agree they need a nursing home level of care. The second is financial: in most states, about $2,000 in countable assets and, in 41 states, monthly income under $2,982 in 2026, or a trust that holds the extra.

Most families meet these rules in a hurry, often while a parent is still in the hospital or in a short rehab stay. This guide is written for that moment. It uses the 2026 figures from the CMS 2026 SSI and spousal impoverishment standards and federal law, and it points out where your state may differ.

Key Takeaways

• Medicaid pays for long-term nursing home care, including room and board, once a person meets the state’s level of care test and its financial rules. Medicare does not pay for this kind of custodial care.
• The usual 2026 asset limit is $2,000 for one person. The home, one car, personal belongings and small burial funds are not counted, within limits.
• In 41 states the income cap is 300% of SSI: $2,982 a month in 2026. Over that, a Miller trust (qualified income trust) can hold the extra income.
• A spouse at home keeps between $32,532 and $162,660 of the couple’s assets in 2026, plus a monthly income allowance of at least $2,705 and up to $4,066.50.
• After the person dies, the state must try to recover nursing home and home care costs from the estate of anyone who was 55 or older, unless a spouse or a young or disabled child survives.

What does Medicaid long term care pay for?

Medicaid long term care pays for ongoing help for people who need a nursing home level of care. In a Medicaid certified nursing home it covers nursing, room and meals, drugs, therapy, activities and personal hygiene items. In most states it can also pay for care at home or in assisted living through waivers.

Federal rules set a floor for what a Medicaid nursing facility must provide without charging the resident extra. According to Medicaid.gov’s nursing facility page, that list includes:

• Nursing and related services
• Specialized rehabilitative services
• Medically related social services
• Pharmacy services
• Meals planned around each resident’s needs
• A program of activities
• Emergency dental care (and routine dental care if your state plan covers it)
• Room and bed maintenance
• Routine personal hygiene items

The same page lists what a home may still charge for: a private room that is not medically needed, a phone, TV or radio, personal clothing, special food, cosmetics beyond the basics, and outings beyond the activity program.

The home must be certified by Medicaid. If your parent’s home takes Medicaid, they can usually stay put when the payer changes; if it is private pay only, they would have to move.

The three places Medicaid long-term care can happen

Setting	Who it is for	Catch
Nursing facility	Anyone 21 or older who meets the state’s level of care test and the money rules	Must be a Medicaid certified home; nearly all income goes to the cost of care
Home and community-based services (HCBS) waiver	People who would qualify for a nursing home but want care at home, in adult day care or in assisted living	States cap enrollment, so many have waiting lists; assisted living room and board is usually not covered
PACE	People 55 or older who need a nursing home level of care and live near a PACE center	Only in some areas; you get care through the PACE team and its network

The nursing home benefit is the only one of the three that states cannot ration. Medicaid.gov says states “may not limit access to the service, or make it subject to waiting lists, as they may for home and community based services.” That is why a nursing home bed is sometimes faster to get than help at home.

Why does Medicare stop paying for a nursing home?

Medicare covers short skilled nursing stays after a hospital admission, not long-term custodial care. Medicare.gov says plainly that “Medicare doesn’t pay for long-term care.” Once a person needs help with daily living rather than daily skilled care, Medicare stops and Medicaid, savings or insurance must take over.

The handoff usually goes like this. A parent has a fall or a stroke, spends at least three days as an inpatient, then moves to a skilled nursing facility for rehab. In 2026, Medicare pays in full for days 1 to 20 and the resident pays $217 a day for days 21 to 100, and Medicare stops after day 100 in a benefit period.

Coverage can end well before day 100, once the staff decide your parent no longer needs daily skilled care. If they still cannot live safely at home, the stay continues as private pay or Medicaid. Our guide to what Medicare Part A covers walks through the skilled nursing rules in detail.

That rehab stay is the time to start a Medicaid application, not after the savings run out. If you are still sorting out which program does what, see Medicare vs Medicaid.

How does someone qualify for a nursing home level of care?

Each state sets its own nursing home level of care test and scores it through a functional assessment, run by the state or its contractor. The assessment looks at how much help the person needs with daily activities such as eating, bathing and dressing, and at their other care needs.

Federal law leaves the details to states. Medicaid.gov says need for nursing facility services “is defined by states, all of whom have established NF level of care criteria.” KFF’s 2026 survey of state programs adds that states “define an institutional level of care differently from one another.”

In practice, the assessor checks activities of daily living, which KFF describes as tasks like eating, bathing and dressing, and instrumental tasks such as preparing meals, managing medication and housekeeping.

Be there for the assessment if you can, because many older adults say they are fine when a stranger asks. Bring a written list of what you do for your parent each week, with real examples of falls, missed medications or confusion.

People with a serious mental illness or an intellectual disability also go through a federal screening called PASRR (Preadmission Screening and Resident Review) before admission.

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

The common Medicaid asset limit for nursing home care in 2026 is $2,000 for a single person, the same as the SSI resource standard. Most states use it, though some set a higher limit. Only countable assets are measured; the home, one car and personal belongings are usually exempt.

The CMS April 27, 2026 bulletin lists the SSI resource standard at $2,000 for an individual and $3,000 for a couple. Married couples get much more room when only one spouse needs care, as the spousal section explains.

Countable vs exempt assets

States that follow SSI rules use the list on SSA’s SSI resources page as their starting point. Some states add their own twists, so treat this as the federal baseline.

Usually counted	Usually not counted
Checking and savings accounts, CDs	The home and the land it sits on (up to the home equity limit)
Stocks, bonds, mutual funds	One vehicle, regardless of value, if used for transportation
Cash value of life insurance over a combined $1,500 face value	Life insurance with a combined face value of $1,500 or less
Second homes, rental property and land not exempt by state rules	Household goods and personal effects, such as wedding rings
Retirement accounts (state rules vary)	Burial spaces; burial funds up to $1,500 each for you and your spouse

Two details trip families up. A joint bank account may be counted in full for the applicant, so be ready to show who deposited the money. And the burial fund exclusion has a $1,500 cap, so check how your state treats a prepaid funeral contract before you buy one.

Can you keep your house and still get Medicaid long-term care?

Usually yes. A home is exempt for Medicaid long-term care up to a home equity limit that every state sets between $752,000 and $1,130,000 in 2026. The limit does not apply at all if a spouse, a child under 21, or a blind or disabled child lives in the home.

The home equity cap comes from section 1917(f) of the Social Security Act. It started at $500,000, with states allowed to choose up to $750,000, and both amounts rise each year with inflation. The 2026 range of $752,000 to $1,130,000 comes from the CMS 2026 standards chart.

Equity means market value minus any mortgage or home equity loan. A parent with a $400,000 house and no mortgage is well under the cap in every state. A family in a high-cost metro area with a paid-off home near $1 million should check the exact figure their state uses.

The cap is changing. Under the 2025 federal budget law, the maximum home equity limit drops to $1,000,000 starting January 1, 2028, and it will no longer rise with inflation, according to KFF’s tracker of the law. States may also set different rules for homes on farms.

Keeping the house during life is not the same as keeping it after death. The state may place a lien on the home of someone who is permanently in a nursing home, and it may later seek repayment through estate recovery, covered below.

What is the income limit for Medicaid long-term care?

In most states the income limit for Medicaid long-term care is 300% of the SSI federal benefit rate, which is $2,982 a month in 2026. KFF counts 41 states that use this special income rule for both nursing homes and home care, plus Massachusetts for home care only.

This cap is separate from the general Medicaid income limits for adults, which are set by the federal poverty level and differ by state. If you want those numbers, see our Medicaid income limits guide. The long-term care cap is tied to SSI, so it moves when the SSI rate does.

The 2027 SSI rate is already set. SSA’s SSI federal payment amounts page lists $1,029 a month for one person in 2027, a 3.6% increase. Three times that figure is $3,087, which is where the cap would land in states that use 300% of SSI. CMS confirms the official standards in its yearly bulletin.

States that do not use a hard cap usually rely on a medically needy program instead. There, a person with higher income can still qualify once their medical bills, including the nursing home bill, bring their remaining income under a set limit. KFF counts 32 states that offer medically needy coverage to older adults.

What is a Miller trust, and when do you need one?

A Miller trust, also called a qualified income trust (QIT), is a special account that lets someone whose income is over the long-term care cap still qualify. Each month the income above the cap goes into the trust, is paid out toward the cost of care, and the state is repaid from anything left when the person dies.

The legal basis is section 1917(d)(4)(B) of the Social Security Act. It allows a trust “composed only of pension, Social Security, and other income,” on the condition that “the State will receive all amounts remaining in the trust upon the death of such individual,” up to what Medicaid paid.

The same section ties these trusts to states that use the income cap without medically needy coverage for nursing home care. Elsewhere, the spend down route usually handles excess income instead.

Here is how one works in a 2026 cap state. Say your mother gets $3,400 a month from Social Security and a pension, which is $418 over the $2,982 cap. Each month, at least $418 is deposited in a bank account titled to the trust. The trustee, such as an adult child, then pays it out according to the state’s rules.

Before you sign, ask your state three things: whether it requires its own trust form, what the trustee may pay for, and whether coverage can start before the month the trust was first funded.

A Miller trust holds income only. Putting savings or a house into it can cost your parent eligibility, so keep assets out of it.

How much of your income goes to the nursing home on Medicaid?

Nearly all of it. After Medicaid approval, the state runs a post-eligibility budget: the resident keeps a personal needs allowance of at least $30 a month, the state takes out allowances for a spouse at home and some medical costs, and the rest is paid to the nursing home as the resident’s share.

Medicaid.gov’s spousal impoverishment page lists the deductions: a personal needs allowance of at least $30, a monthly income allowance for a spouse at home, a family allowance if other family members live in the household, and amounts for medical expenses Medicaid does not cover.

Most states set the allowance above the federal floor. KFF’s 2026 survey found a median personal needs allowance of $70 for nursing home residents. Washington reported the largest increase this year, from $42 to $109 a month.

A simple example for a single parent with no other deductions: monthly income of $2,100 and a $70 personal needs allowance. The resident would pay $2,030 a month to the home as their share, and Medicaid would pay the rest of the bill.

Home care through a waiver works differently. Because a person living at home still has rent, food and utilities to pay, states let waiver participants keep much more. KFF found a median allowance of $2,982 for home care in 2026.

How does Medicaid protect the spouse who stays home?

Federal spousal impoverishment rules let the spouse at home keep part of the couple’s savings, called the Community Spouse Resource Allowance, between $32,532 and $162,660 in 2026. That spouse can also receive income from the spouse in care to reach a monthly floor of at least $2,705, up to $4,066.50.

These protections, in section 1924 of the Social Security Act, date from 1988. They apply when one spouse is likely to be in a nursing home for at least 30 days in a row, and states can also use them for home care waivers.

The asset side: the Community Spouse Resource Allowance

The state first adds up everything either spouse owns, in either name, as of the start of the first continuous stay in a nursing home or hospital. The spouse at home’s own savings count too, because federal law treats all of the couple’s resources as available at the time of application.

The state then protects a share for the spouse at home. Under section 1924(f)(2), it is the greater of the state’s standard or half of the couple’s countable assets, capped at the federal maximum. A state may set its standard as high as that maximum, $162,660 in 2026.

Worked example in a half-share state: a couple has $200,000 in countable savings at the snapshot date. Half is $100,000, which sits between $32,532 and $162,660, so the spouse at home keeps $100,000. The spouse in the nursing home must get down to the state’s own limit, such as $2,000, on the remaining $100,000.

If the same couple had only $50,000, half would be $25,000, which is below the 2026 floor. The spouse at home could keep $32,532 instead.

The income side: the monthly allowance

Income in one spouse’s name belongs to that spouse. Federal law says income paid “solely in the name of” one spouse “shall be considered available only to that respective spouse.” So the at-home spouse’s Social Security and pension are never used to pay the nursing home.

If the spouse at home has little income of their own, they can receive some of the nursing home spouse’s income. The allowance is the minimum monthly maintenance needs allowance (MMMNA) minus their own income. In most states the 2026 floor is $2,705 from July 1, 2026, or $3,381.25 in Alaska and $3,111.25 in Hawaii.

Example: the spouse at home receives $1,200 a month in Social Security. The allowance is $2,705 minus $1,200, or $1,505 a month, paid from the nursing home spouse’s income before anything goes to the facility.

High housing costs can raise the allowance. When rent or mortgage, property taxes, insurance and the state’s utility allowance exceed $811.50 a month in 2026, the excess can be added, up to the $4,066.50 maximum. A fair hearing or court order can set a higher amount in hardship cases.

These spousal rules sit alongside the 5-year look-back on gifts. Money either spouse gives to children or others during the look-back can still trigger a penalty.

What if your parent has too much money to qualify?

Assets above the limit generally have to be spent on your parent’s care or needs before Medicaid starts, a process called spending down. Gifts or below-value sales in the 60 months before applying can cause a penalty period with no Medicaid coverage for nursing home care.

Spending down is not the same as giving away. Money spent at fair value on your parent’s own care and needs is allowed; money handed to family is a transfer. In medically needy states, a separate income spend down uses monthly medical bills to qualify. Our guide to Medicaid spend down covers both kinds step by step.

The look-back is the other half of this picture. States review 60 months of financial records for transfers, and a gift can delay coverage by months. How the penalty is calculated, which transfers are exempt and how to fix a mistake are in our Medicaid look-back period guide.

Can Medicaid pay for long-term care at home instead of a nursing home?

Yes, in most states, through home and community-based services (HCBS) waivers and through PACE. These programs use the same level of care test as a nursing home but pay for care at home, in adult day programs or in assisted living. The catch is that states can cap waiver enrollment.

Medicaid.gov reports that 47 states and DC run at least one 1915(c) waiver. Waivers pay for the hands-on help that defines long-term care, such as help with bathing, dressing and meals. States can also add services that help people move out of a nursing home or avoid one.

Waivers are not an entitlement. Medicaid.gov says states “choose the maximum number of people that will be served” and can limit a waiver to certain areas or groups. Federal rules also bar waiver funds from paying room and board, so in assisted living a waiver covers the care but not the rent and meals.

Waiting lists are real

KFF’s October 2026 survey found 40 states with waiting or interest lists and a total of almost 650,000 people on them. People who got services waited 34 months on average in 2026, up from 32 months in 2025.

Those numbers look worse for older adults than they are. KFF found that seniors and adults with physical disabilities make up about one-quarter of the people waiting, and most people on lists can get other home care while they wait.

Ask your state what home care is available now, and add your parent’s name to the waiver list early.

PACE

PACE (Program of All-inclusive Care for the Elderly) is a combined Medicare and Medicaid program for people who would otherwise need a nursing home. According to Medicare.gov’s PACE page, you can join if you:

• Are at least 55
• Live in the service area of a PACE organization
• Need a nursing home level of care, as certified by your state
• Are able to live safely in the community with help from PACE

A PACE team covers everything Medicare and Medicaid cover, including drugs, day center visits, home care and transport. With Medicaid, there is no monthly premium and no copays for approved care.

PACE runs only in some states and areas. Our guide to Medicare help for low-income seniors explains how it fits with other programs.

Will the state take the house after a Medicaid recipient dies?

It can try. Federal law requires every state to seek repayment from the estate of a Medicaid recipient who was 55 or older for nursing home care, home and community-based services, and related hospital and drug costs. Recovery is barred while a spouse, a child under 21, or a blind or disabled child survives.

The rules are on Medicaid.gov’s estate recovery page. States may also recover for other Medicaid services if they choose, but not for Medicare cost sharing paid through the Medicare Savings Programs. Every state must have a process for waiving recovery when it would cause undue hardship.

During life, a state may place a lien on the home of someone who is permanently in a nursing home. It cannot do this if the spouse, a child under 21, a blind or disabled child, or a sibling with an equity interest in the home lives there. If the person goes home from the facility, the lien must be removed.

What counts as the “estate” varies. Federal law requires states to include probate property and lets them also reach assets passed through joint ownership, a life estate or a living trust.

Ask your state Medicaid agency for its estate recovery rules and hardship process before you plan how the house will pass.

A Miller trust also pays the state back first. Any money left in it at death goes to Medicaid, up to the total Medicaid paid for that person’s care.

How do you apply for Medicaid long-term care?

Apply through your state Medicaid agency, often with a separate long-term care form rather than the general health coverage application. You will need proof of income, five years of financial records, and a level of care assessment. Apply as soon as care is needed, because retroactive coverage is limited.

Each state runs its own process, but most follow this order:

1. Find the right office. In many states, long-term care Medicaid has its own application or office, separate from regular health coverage. Our Medicaid program overview links to each state.
2. Gather records. Expect to provide ID, Social Security and pension award letters, 60 months of bank statements, deeds, insurance policies, burial contracts and any trust documents.
3. Get the level of care assessment. The state or its contractor schedules it. A hospital or nursing home social worker can often request it.
4. Set up a Miller trust if needed. In a cap state, do this before or with the application if income is over $2,982.
5. Respond fast. Missing a deadline to send more documents can lead to a denial.
6. Appeal if denied. You have the right to a fair hearing, and deadlines are short, so read the notice the day it arrives.

Timing matters more starting next year. Under current law, Medicaid can cover qualified bills from up to 90 days before the application. From January 1, 2027, the 2025 budget law limits that to two months for older adults and other traditional enrollees, and one month for the expansion group, according to KFF.

Veterans and surviving spouses may have other options, including VA nursing home care and state veterans homes. Our guide to veterans Medicaid explains how VA benefits and Medicaid fit together.

Questions to ask a nursing home before Medicaid takes over

Families who ask these questions early tend to avoid a forced move or a surprise bill later:

• Is the facility certified for Medicaid, and are Medicaid beds available on the unit where my parent lives now?
• Will my parent keep the same room when the payer switches from private pay to Medicaid?
• Who on staff helps with Medicaid applications, and how soon can they start?
• What will you charge for that Medicaid does not cover, such as a phone line, haircuts or a private room?
• How is the personal needs allowance handled, and can we see the account statements?
• If my parent’s condition improves, who helps plan a move home with waiver services?

Medicaid long-term care rules are federal at the core but set in detail by each state, and the dollar figures change every January and July. Check your state’s current numbers before you file, and keep copies of everything you submit.

Related reading:

• Medicare Savings Programs
• How SSI works
• SSI income limit
• Benefits for seniors