Medicaid & paying for long-term care, by state

Long-term care — a nursing home, assisted living, or ongoing help at home — is the largest expense most families face in old age, and it is not what people expect it to be. Here is what to know before you dig into the numbers.

• Medicaid, not Medicare, pays for long-term care. Medicaid is the single largest payer of long-term care in the U.S. Medicare does not cover long-term custodial care (help with bathing, dressing, eating, and daily living) — only short, skilled stays after a hospital visit. How Medicaid covers long-term care →
• Who it covers. Medicaid pays for nursing-home care for people who meet strict income and asset limits. Many — but not all — states also cover assisted living through a Home- and Community-Based Services waiver, which usually pays for care services (not room and board) and often has a waitlist. Whether your state does is shown on each state page below.
• The asset limit is low. For a single applicant it is commonly around $2,000 in countable assets (illustrative — the exact figure varies by state and is listed on each state page). Your home (up to an equity limit), one car, and personal belongings usually do not count.
• What the resident keeps. Once Medicaid pays, almost all of the resident’s own income goes to the home as their share of the cost. What they keep is the personal needs allowance — for clothing, haircuts, a phone. Federal law sets a floor of only $30 a month and lets each state set its own higher figure, so this is a state-by-state answer worth asking for by name.
• Spend-down. If you are over the asset limit, qualifying usually means spending the excess down to the limit on care and legitimate expenses. You cannot simply give it away — see the look-back. And if you are doing this for a parent or spouse under a power of attorney, read the document first: most POAs don’t grant the express gifting or transfer authority a spend-down move needs, and acting without it can void the transfer on top of any penalty (what an agent owes). Estimate a spend-down →
• The look-back on gifts. When you apply, Medicaid reviews recent gifts or transfers made for less than fair value. A last-minute transfer can trigger a penalty period in which Medicaid will not pay — exactly when care is needed most, so plan early. The window varies by state: most use 60 months (5 years), but California uses 30 months and does not count transfers made during 2024 and 2025, when the state had no asset test at all. Your state page shows its window, and cites the rule. How to apply →
• The healthy spouse is protected. When only one spouse needs care, spousal impoverishment rules let the spouse who stays at home keep a share of the couple’s assets (the CSRA) and enough of the couple’s income to reach the minimum monthly maintenance needs allowance (MMMNA), so they are not left with nothing. These federal protections apply to all legally married couples, including same-sex spouses. Spousal protection rules →
• Estate recovery — and how far it can reach. After a recipient dies, states must seek repayment from the estate for long-term-care costs (nursing facility, home- and community-based services, and related hospital and drug care) received at age 55 or older. That is the federal floor, not the ceiling: the same statute lets a state recover instead for any service its Medicaid plan paid after 55, and some states have taken that option — so don’t assume the claim stops at the nursing-home bill; ask your state which it does (42 U.S.C. § 1396p(b)(1)(B)). Important protections: recovery is barred or deferred while a surviving spouse, a child under 21, or a blind or disabled child of any age is living. And where the state placed a lien on the home, it cannot recover while a sibling who lived there for the year before the move into care — or a son or daughter who lived there for two years and provided the care that kept the parent out of an institution — is still lawfully living in it, having lived there ever since. That sibling does not have to own any part of the house: § 1396p(b)(2)(B)(i) asks only for the year of residence. (The equity stake you may have read about belongs to two other clauses of the same section — the lien bar at (a)(2)(C) and the transfer exception at (c)(2)(A)(iii) — not to this one.) States must also grant undue-hardship waivers, and some states recover only from the probate estate. How estate recovery works →

This is general information, not legal advice. The rules vary by state and change, and the stakes are high. Confirm anything before you rely on it with a certified elder-law attorney, your state Medicaid office, or free local help: your Area Agency on Aging (1-800-677-1116), 2-1-1 (dial 211), or your State Health Insurance Assistance Program (SHIP) (shiphelp.org).