Many people assume Medicare will pay if they need long-term care. It does not, apart from short skilled-nursing stays after a hospital admission. The program that actually covers most long-term care in the United States is Medicaid, the joint federal and state health program for people with limited income and resources.
What Medicaid covers for seniors
For eligible seniors, Medicaid can pay for nursing home care, and in most states also for services that help people stay at home, such as personal care aides, adult day care and respite for family caregivers, through home and community-based services waivers. It can also cover Medicare premiums and cost-sharing when you are enrolled in both programs, a situation known as dual eligibility.
Financial eligibility
Each state sets its own income and asset limits within federal rules. Countable assets usually include savings, investments and property other than your primary home. Your home is generally exempt while you or a spouse live in it, and rules protect a spouse who remains in the community from being impoverished by the other spouse's care costs. Because the rules are complex and vary by state, many families consult an elder law attorney before applying.
The look-back period
To prevent people from giving away assets to qualify, Medicaid reviews financial transfers made during a look-back period, five years in most states, before the application. Gifts or below-market sales during that window can trigger a period of ineligibility. Planning ahead matters: transfers made well before care is needed are treated differently from last-minute ones.
How to apply
Applications go through your state Medicaid agency, often with help from a hospital or nursing home social worker or your local Area Agency on Aging. Gather several years of bank statements, deeds, insurance policies and proof of income before you start.
Medicaid and long-term care insurance
Long-term care insurance and Medicaid are not either/or. Some states run Partnership programs that let people who buy qualifying long-term care insurance protect additional assets if they later need Medicaid. Our guide to long-term care insurance explains the private-insurance side of the equation.
