Medicaid: The Primary Program Covering Nursing Home Care Costs

Nursing homes offer a vital lifeline for seniors who can no longer live independently, providing a safe, supportive, and engaging community. These facilities also offer crucial respite for families and caregivers who may be struggling to provide round-the-clock care at home. For many older adults and their families, the cost of nursing home care can be a significant financial burden. Fortunately, Medicaid is the primary public program in the United States that covers the extensive costs associated with nursing home care for those who qualify, offering essential financial relief and access to necessary long-term services and supports.

Understanding Medicaid’s Role in Long-Term Care

Medicaid is a joint federal and state government program that provides healthcare coverage to millions of Americans with limited income and resources. It’s a comprehensive program, serving not only older adults but also children, pregnant women, individuals with disabilities, and families. It is crucial to differentiate Medicaid from Medicare, another government health insurance program. Medicare primarily focuses on healthcare for seniors and younger people with disabilities, but it offers very limited coverage for long-term care services like nursing homes.

If you or a loved one are facing the prospect of nursing home care and are concerned about the costs, understanding Medicaid’s role is paramount. Delving into the specifics of long-term care and how Medicaid can help is the first step in navigating this complex landscape.

What Exactly Are Nursing Homes?

Nursing homes, also known as skilled nursing facilities (SNFs), are residential care facilities designed for individuals who require a level of medical and personal care that cannot be adequately provided at home but do not necessitate hospitalization. These facilities offer 24-hour supervision and skilled nursing care, along with a range of essential services, including:

Nutritious, balanced meals served three times daily.
Assistance with activities of daily living (ADLs) such as dressing, bathing, and toileting.
Rehabilitative therapies including physical, occupational, speech, and respiratory therapy.
Social and recreational programs to promote engagement and well-being.

While some individuals may utilize nursing homes for short-term rehabilitation following a hospital stay, the majority of nursing home residents require ongoing, long-term care due to chronic health conditions or disabilities. For these individuals, nursing homes become their permanent residence, providing the continuous support and medical attention they need.

Medicaid: A Key Payer for Nursing Home Expenses

The answer to whether Medicaid covers nursing home costs is definitively yes. Medicaid is the most significant payer for nursing home care in the United States. While most nursing homes are certified to accept Medicaid payments, it is important to verify this when researching facilities, as not all participate. Medicaid coverage for nursing home care is specifically intended for eligible individuals who lack other financial resources to pay for this essential care. It acts as a safety net for those who have exhausted their savings and require long-term skilled nursing care.

Comprehensive Coverage: What Nursing Home Expenses Does Medicaid Pay For?

For individuals who meet Medicaid’s eligibility criteria, the program provides comprehensive coverage, typically paying 100% of the costs associated with necessary nursing home care. This eliminates significant out-of-pocket expenses for residents and their families for essential services. Services generally covered by Medicaid in nursing homes include:

Standard room and board.
Skilled nursing services provided by licensed nurses.
Essential personal hygiene supplies.
All meals, including special diets when medically necessary.
Prescription and over-the-counter medications administered by facility staff.
Rehabilitation services such as physical, occupational, and speech therapy.
Medically-related social services and support.
Tailored activity programs designed to meet residents’ needs and interests.
Emergency dental care for urgent needs.
Routine room and bed maintenance.

While Medicaid covers a wide range of essential services, residents may be responsible for paying for certain ancillary or convenience items and services not considered medically necessary. These may include:

The added cost of a private room, if desired and available.
Cosmetic and grooming items beyond basic hygiene supplies.
Personal plants and flowers.
Specially prepared meals requested for personal preference rather than medical necessity.
Personal reading materials and entertainment.

Medicaid’s commitment to covering nursing home care for eligible beneficiaries extends for as long as the individual requires that level of care. Whether it’s for a short rehabilitation period, an extended recovery, or long-term residency, Medicaid provides crucial financial support.

State-Specific Nuances: Variations in Medicaid Eligibility

It’s essential to remember that Medicaid is administered at the state level, resulting in variations in eligibility requirements and specific coverage details from state to state. To get precise information about Medicaid guidelines for nursing home care, it’s always best to contact your state’s Medicaid office directly.

However, some general principles of Medicaid eligibility for nursing home care apply across most states. Eligibility is primarily determined by two key factors: income and assets. The specific income and asset limits vary by state and are updated annually. Importantly, individuals may qualify for Medicaid coverage for nursing home care even if they have not been eligible for other Medicaid programs in the past, as the financial criteria for long-term care often differ.

Assessing Your Eligibility: Two Key Criteria

To qualify for Medicaid coverage for nursing home care, individuals must typically meet two sets of criteria:

Level-of-Care (LOC) Criteria: This assessment determines if an individual requires the level of care typically provided in a nursing home setting. Each state establishes its own specific criteria for Nursing Home Level of Care (NHLOC) and utilizes various assessment tools. These assessments commonly evaluate an individual’s physical functioning, cognitive abilities, medical needs, and behavioral health. If the assessment concludes that an applicant does not require nursing home level care, Medicaid will not cover the costs.
Financial Criteria: To be financially eligible for Medicaid nursing home coverage, applicants must meet specific income and asset limitations set by their state. These limits are based on marital status and the state of residence and are subject to annual adjustments. Most states examine an applicant’s financial history for the past five years to ensure compliance with eligibility rules.
Medicaid Spend-Down: For individuals who initially exceed Medicaid’s financial limits and are paying for nursing home care privately, a pathway to Medicaid eligibility exists through a process called “Medicaid spend-down.” By spending down countable assets (as defined by state rules) to a specified level, individuals can then become eligible for Medicaid. At that point, Medicaid will assume responsibility for covering the remaining nursing home expenses.
Income Allocation: In exchange for Medicaid covering nursing home costs, residents are typically required to contribute the majority of their income towards their care. However, they are generally permitted to retain a small personal needs allowance each month, the amount of which varies by state.

Rosalind Newsholme, Program Associate with NCOA’s Center for Economic Well-Being, emphasizes the state-specific nature of Medicaid programs: “While there is some overlap, Medicaid programs tend to be very individual to each state. That’s why it’s so important to check directly with your state’s Medicaid agency to find out what their specific guidelines are for nursing home coverage.”

Finding Nursing Homes That Accept Medicaid

Medicaid-Certified Facilities: Ensuring Quality and Standards

To accept Medicaid payments, nursing homes must be licensed and certified as Medicaid Nursing Facilities (NFs). Medicaid-certified facilities are required to provide a specific range of medically necessary care that aligns with Medicaid coverage guidelines. These facilities are also subject to rigorous quality and safety standards and are regularly monitored by state survey agencies to ensure compliance and resident well-being.

A valuable resource for finding Medicaid-certified nursing homes is the Medicare.gov website. Their Nursing Home Compare tool allows you to search for and compare Medicare and Medicaid-certified nursing homes in your local area.

Researching Nursing Home Facilities: Asking the Right Questions

Finding the right nursing home is a crucial decision. Visiting potential facilities in person is highly recommended to get a firsthand impression of the environment and interact with residents and staff. Prepare a list of questions to ask during your visits or phone calls to nursing homes. Here are some key questions to consider when researching Medicaid nursing facilities:

Is the nursing home certified for both Medicaid and Medicare?
What are the staff-to-resident ratios, and what is the staff turnover rate?
What is the facility’s staff screening and hiring process?
Are staff members required to receive vaccinations, such as for flu and COVID-19?
What are the current visitation policies for family and friends?
Does the facility allow residents to have some choice in their daily routines, such as wake and sleep times?
What infection prevention protocols are in place?
What types of meals are offered daily, and are special dietary needs accommodated?
What social and recreational activities are available to residents?
Who should residents or family members contact if there are concerns about care?

Medicaid vs. Medicare: Understanding the Coverage Differences

It’s vital to distinguish between Medicaid and Medicare regarding long-term care coverage. While both programs are government-funded, their roles in nursing home care are very different. Medicaid stands out as the primary program that covers long-term nursing home care, while Medicare’s coverage is limited to short-term, skilled care in specific circumstances.

For eligible individuals, Medicaid provides comprehensive coverage for care in Medicaid-certified nursing facilities, potentially covering 100% of the costs. While residents may need to contribute a significant portion of their income towards care, there is no set time limit on how long Medicaid will cover a nursing home stay, as long as the level of care remains medically necessary.

In contrast, Original Medicare offers very limited coverage for skilled nursing facility (SNF) care, and it does not cover long-term care in nursing homes, assisted living facilities, or at home. Medicare Part A may cover up to 100 days of skilled nursing facility care per benefit period following a qualifying hospital stay of at least three days. For days 1-20, Medicare typically pays 100% of covered services. For days 21-100, a daily copayment applies. Beyond 100 days, Medicare provides no further coverage for SNF care within that benefit period, and it does not cover custodial long-term care at all. Therefore, for extended or permanent nursing home stays, individuals must rely on other payment sources, with Medicaid being the most significant option for those who qualify.

Frequently Asked Questions About Nursing Homes and Medicaid

How much of nursing home costs does Medicaid cover?

In most cases, Medicaid covers 100% of the allowable costs for care in a Medicaid-certified nursing home, provided that the individual meets all eligibility requirements, both in terms of level of care and financial need.

Which nursing home facilities accept Medicaid?

While nursing homes are not legally mandated to accept Medicaid, the vast majority do participate in the program. Facilities that are Medicaid-certified are committed to providing specific nursing and related services focused on maintaining and improving residents’ physical, mental, and psychosocial well-being. To locate Medicaid-certified facilities in your area, utilize the Medicare’s Nursing Home Compare tool.

How can I determine if I am eligible for Medicaid?

Medicaid eligibility rules are determined at the state level and vary accordingly. To understand the specific eligibility criteria in your state and to determine if you qualify for Medicaid, contact your state’s Medicaid office. You can also explore the HealthCare.gov website for general information on Medicaid eligibility based on income.

What are “Medicaid beds” in a nursing home?

The term “Medicaid bed” refers to beds within a skilled nursing facility that are specifically designated for residents whose care is funded by Medicaid. Some nursing homes may primarily or exclusively serve Medicaid recipients, while others may have a mix of “Medicaid beds” and beds for private-pay residents. It is legally mandated that nursing homes provide the same standard of care to all residents, irrespective of their payment source.

Navigating Long-Term Care Options: Informed Decision-Making

Choosing the right nursing home and understanding the complexities of long-term care financing can be overwhelming. Thorough research is essential when seeking a Medicaid nursing home for yourself or a loved one. It is highly advisable to seek guidance from experts in elder care and financial planning to navigate these decisions effectively. NCOA’s BenefitsCheckUp is a valuable resource to explore various benefits programs that can assist with healthcare costs, medications, food, utilities, and more, providing further support as you plan for long-term care needs.