Medicaid pays an average of about $200 per day for nursing home care, which works out to roughly $6,000 per month per resident. That’s the national average base rate, but actual payments vary enormously by state, ranging from 62% to 182% of that national figure depending on local wages and how much care each resident needs. In total, Medicaid spent approximately $66.5 billion on nursing facility care in 2019 alone, making it the single largest payer for long-term care in the United States.
What Nursing Homes Receive Per Resident
The national average Medicaid base payment to nursing facilities is $200.39 per day. That covers room, board, and the daily nursing care a resident requires. States set their own reimbursement rates, so a facility in Mississippi may receive far less per day than one in Connecticut. These rates are adjusted for regional wage differences and the complexity of each resident’s medical needs.
Because Medicaid rates are lower than what private-pay residents or Medicare typically cover, some nursing homes limit the number of Medicaid beds they offer. Facilities with higher staffing ratings don’t necessarily receive higher Medicaid payments, which creates an ongoing tension between care quality and funding.
How Much You Keep From Your Own Income
When Medicaid pays for your nursing home stay, nearly all of your personal income (Social Security, pensions) goes toward the cost of your care. You’re allowed to keep a small monthly amount called the Personal Needs Allowance for things like toiletries, clothing, or a phone bill. In 2024, that allowance ranged from $30 to $200 per month depending on the state, with a national average of just $70. The median across states has historically hovered around $50. For most residents, this is the only money they control.
Home and Community-Based Care
Medicaid doesn’t only pay for nursing homes. Every state offers some form of home and community-based services, often called HCBS, which can include personal care aides, home-delivered meals, non-medical transportation, supported employment, and help with daily tasks like bathing and dressing. These services let people stay in their homes or in smaller residential settings instead of moving to a nursing facility.
How states deliver and pay for these services varies widely. Some build them into their standard Medicaid plan, meaning anyone who qualifies can access them. Others use waiver programs that give the state flexibility to cap enrollment, target specific groups (like people with intellectual disabilities or seniors over 65), or limit availability to certain regions. The dollar amounts paid to home care workers differ significantly by state, and not every state covers the same menu of services.
What Medicaid Covers in Assisted Living
Medicaid does not pay for room and board in assisted living facilities. That’s a critical distinction. Many states offer waiver programs that cover supportive services within assisted living, such as help with medications, personal care, or health monitoring. But the cost of your actual room, meals, and utilities remains your responsibility. Since room and board make up the bulk of assisted living expenses, Medicaid waivers reduce rather than eliminate what you pay out of pocket.
The PACE Program
The Program of All-Inclusive Care for the Elderly, known as PACE, is an alternative model available in many states for people age 55 and older who qualify for nursing home-level care but want to remain at home. Medicaid pays a fixed monthly amount to the PACE organization, which then coordinates all medical care, social services, and support the person needs. Federal rules require that this monthly payment be less than what Medicaid would have spent if the person were in a nursing home. The payment stays the same regardless of whether the person’s health improves or worsens, giving the PACE organization an incentive to keep participants healthy and out of institutions.
Financial Eligibility Requirements
Qualifying for Medicaid long-term care requires meeting strict financial limits. As of January 2026, the asset limit is $130,000 for an individual and $195,000 for a couple, with an additional $65,000 allowed per extra household member. Your primary home is typically excluded from the asset count as long as certain conditions are met, and some income generated by assets within your allowable limit may not count toward your share of cost.
One important exception: if you receive Supplemental Security Income (SSI), the much stricter SSI asset limits still apply, which are $2,000 for an individual and $3,000 for a couple.
Spousal Protections
When one spouse enters a nursing home and the other stays in the community, federal law provides what’s called spousal impoverishment protections. The spouse at home can keep a designated amount of the couple’s combined assets and income so they aren’t left destitute. The federal government sets a minimum and maximum range for these allowances each year, and individual states choose where within that range to set their own limits. This means the at-home spouse’s financial situation can look quite different depending on where they live.
The Look-Back Period for Asset Transfers
You can’t give away money or property to qualify for Medicaid and expect coverage to begin immediately. Medicaid reviews all financial transactions from the previous 60 months (five years) before your application date. This is the look-back period, and it applies in the majority of states.
If you gave away assets or sold them below fair market value during that window, Medicaid calculates a penalty period during which you won’t receive coverage. The formula is straightforward: the total value of all disqualifying transfers is divided by a state-specific number (called the penalty divisor, which roughly represents the average monthly cost of nursing home care in your state). The result is the number of months you must wait before Medicaid begins paying. A $100,000 gift in a state where the divisor is $10,000 per month, for example, would create a 10-month penalty.
Medical Eligibility: Level of Care
Financial qualification alone isn’t enough. You also need to demonstrate that you require a certain level of care. States assess this through a formal evaluation that looks at your functional abilities and medical needs. Generally, you must have significant difficulty with basic activities of daily living, such as bathing, dressing, eating, or moving around, or require skilled nursing services like wound care, injections, or tube feeding.
Most states use a two-tier system. The intermediate level applies to people who need help with at least one or two daily activities combined with some clinical services. The skilled level applies to people who need more intensive medical attention. Someone who is completely dependent in all activities of daily living automatically qualifies at the skilled level, regardless of other medical factors.
Estate Recovery After Death
Medicaid is not a gift. For anyone age 55 or older, states are federally required to seek reimbursement from the deceased person’s estate for the cost of nursing facility services, home and community-based services, and related hospital and prescription drug costs. This means Medicaid can place a claim against your home, bank accounts, and other assets after you die.
There are important exceptions. States cannot pursue estate recovery if the person is survived by a spouse, a child under 21, or a child of any age who is blind or disabled. States must also have a process in place to waive recovery when it would cause undue hardship to surviving family members. Additionally, money left in certain trusts after a Medicaid enrollee dies may also be subject to reimbursement. Planning for this recovery process is one of the main reasons families consult elder law attorneys before applying for Medicaid long-term care benefits.