What Medicaid Covers in Memory Care for Alzheimer’s & Dementia

What is Medicaid?

Medicaid is a public healthcare insurance program for American citizens with limited resources. Applicants have to meet certain financial requirements in order to be eligible, but people who don’t meet the requirements can use Medicaid Planning strategies to manage their finances and eventually qualify.

Medicaid is open to people of all ages, and there are programs designed for seniors that cover healthcare as well as non-medical, long-term care services and supports: Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid. These are also the programs most relevant to individuals with Alzheimer’s disease and other dementias, and their families. The financial and medical eligibility criteria are discussed in more detail below, but here is a general overview of the three programs and their relevance to memory care:

• Nursing Home Medicaid covers all essential nursing home expenses, including room and board, for qualified applicants who need a high-level of care, but it does not cover memory care. Nursing Home Medicaid is an entitlement, which means all qualified applicants are guaranteed coverage without wait.
• HCBS Waivers cover care in community settings, including memory care residences in certain states, for qualified applicants who need a high-level of care, but they do not cover room and board. HCBS Waivers are not an entitlement. Instead, they have a limited number of enrollment spots and once those are full, additional applicants will be placed on a waitlist.
• ABD Medicaid covers care in community settings, including memory care in certain states, for qualified applicants, but it does not cover room and board. ABD Medicaid is also known as state or regular Medicaid, but it should not be confused with the regular Medicaid available to people of all ages. Like Nursing Home Medicaid, ABD Medicaid is an entitlement.

To sum up, HCBS Waivers and ABD Medicaid cover care in memory care residences in some states, but they do not cover room and board. Nursing Home Medicaid does not provide any coverage in memory care settings.

What is Memory Care?

Memory care residences are designed for patients with neurological conditions affecting their memory, most commonly Alzheimer’s disease and other dementias. On the continuum of residential care, memory care provides a higher level of care than assisted living, but less than a nursing home.

Memory care staff members receive specialized training on how to best care for dementia patients. The facilities themselves have dementia-friendly features, such as bright paint colors, circular hallways without dead ends, location monitoring devices, special locks to prevent wandering and secure outdoor areas so patients can safely be outside.

Memory care facilities are often found in a secured wing or floor of an assisted living residence, but there are also stand-alone memory care residences that offer a more home-like setting. There are pros and cons to each setting, but both provide room and board, medication management, activities that encourage socialization and help with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting).

While some memory care residences offer a nursing home level of care, most do not and many residents will eventually need to move on from memory care into a nursing home. If an individual has a feeding tube, is on an IV, needs extreme wound care or needs 24/7 nursing care (as opposed to merely supervision), memory care will not be able to meet their needs. The services provided in memory care can change depending on the residence, the state and the needs of the individual. This is also where Medicaid can play a role and provide additional services

Memory care admissions requirements can also vary by state. But in general, one can be admitted without an Alzheimer’s disease or dementia diagnosis, as long as they show:

• Signs of dementia
• That placing them in a memory care residence will be beneficial
• That the memory care residence can meet their needs

While there are no federal guidelines as to when a memory care community can evict someone, the general rule of thumb is that a person can not stay at a residence that can not care for them. Each residence has its own set of rules, so it’s important to understand those rules and the criteria for eviction before signing any contracts with a memory care residence.

Medicaid Benefits in Memory Care

HCBS Waivers typically cover a wider variety of long-term care services and supports in memory care than ABD Medicaid programs, but not always. As mentioned above, Medicaid benefits in memory care can vary depending on the state, the HCBS Waiver, the ABD Medicaid program and/or the beneficiary themselves. In general, Medicaid benefits in memory care can include:

• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Personal care assistance with Instrumental Activities of Daily Living (such as shopping, cooking, cleaning, laundry, etc.)
• Nursing services
• Medication management
• Assistive technology and devices
• Durable medical equipment and supplies
• Transportation to medical appointments
• Meal delivery

Medicaid will not cover services already being provided, but it can add to coverage. For example, if a memory care facility is providing 20 hours/week of personal care assistance with the Activities of Daily Living, Medicaid might pay for the beneficiary to receive an additional 5 or 10 hours/week.

The state can assign a caregiver to provide these services, but some HCBS Waivers and ABD Medicaid programs allow beneficiaries to self-direct their care. This means they can select a caregiver of their choice to provide some benefits, most often the personal care assistance. These caregivers can include family members and even spouses in some states. This is called Consumer Directed Care, Self-Directed Care, Participant Direction and other names, depending on the state, and it was previously referred to as Cash and Counseling. Learn more about Medicaid paying family members to provide care.

Medicaid Eligibility Requirements in Memory Care

As mentioned above, Medicaid can provide benefits in memory care through two programs – Home and Community Based Services (HCBS) Waivers, and Aged, Blind and Disabled (ABD) Medicaid – depending on the state.

HCBS Waivers
Applicants have to meet two financial requirements to qualify for HCBS Waivers – an income limit and an asset limit. In most states in 2025, the individual income limit is $2,901/month. Almost all income is counted – pension payments, Social Security benefits, salary, rental income, alimony, etc. The asset limit is $2,000 in most states in 2025. Some assets can be exempt, like a primary vehicle, clothes, personal items, household furniture and appliance and, in many cases, a primary home. People who don’t meet these limits can still find ways to qualify with the help of a professional, like a Certified Medicaid Planner.

These limits can all change depending on the state, and the applicant’s marital status. In California, for example, there is no asset limit for any Medicaid program and the individual income limit for HCBS Waivers is $1,732/month. In Illinois, the asset limit is $17,500 and the income limit is $1,255/month, effective from April 2024 to March 2025. To see if you or a loved one meet the eligibility requirements in your state, take this free Medicaid eligibility test.

In most cases, these limits double for married couples with both spouses applying for HCBS Waivers, but there are special rules for married couples with one spouse applying. The non-applicant spouse, also known as the community spouse, is entitled to keep up $157,920 in assets (in most states in 2025) even though Medicaid considers the assets of a married couple to be jointly owned, thanks to the Community Spouse Resource Allowance. And the applicant spouse can transfer some or all of their income to low-income community spouses to help prevent them from living in poverty, which is known as the Monthly Maintenance Resource Allowance.

Functional criteria
The functional, or medical, requirement for most HCBS Waivers is needing a Nursing Facility Level of Care (NFLOC). This means the type of constant supervision and access to skilled care that is associated with a nursing home. The exact definition of a NFLOC and how it’s evaluated can vary by state. In some states, needing help with three of the five Activities of Daily Living (mobility, bathing, dressing, eating, toileting) is required for a NFLOC designation, in other states it’s only two of the five. Some states may place extra emphasis on the in-person evaluation, others might place extra value on the primary care provider’s recommendation.

Please Note: A diagnosis of Alzheimer’s disease or another dementia does not guarantee a NFLOC designation. Most states assess cognitive function as part of their NFLOC evaluation process, and dementia patients will likely have other symptoms that lead them to requiring a NFLOC, but dementia does not automatically equate to a NFLOC.

In some states, applicants are only required to be at risk of needing a NFLOC to meet the medical requirement for HCBS Waivers.

ABD Medicaid
ABD Medicaid applicants also have to meet an asset and income limit. In most states in 2025, the individual asset limit for ABD Medicaid is $2,000, but it can vary significantly. In Florida, for example, it’s $5,000, and it’s $17,500 in Illinois. Most assets are counted, but there are some major exemptions, like a primary vehicle, personal items and, in many cases, a home. The individual income limit for ABD Medicaid ranges from $967/month to $1,795/month, depending on the state.
For married ABD Medicaid applicants, the assets and income of both spouses are counted whether one or both spouses are applying. The married income limit for ABD Medicaid in 2025 ranges from $1,450/month to $2,658/month, depending on the state. The married asset limit is a combined $3,000 in most states in 2025, but it can also vary significantly.

Functional Criteria
There is no functional requirement to receive basic healthcare coverage (primary care visits, prescription medication, short-term hospital stays, etc.) through ABD Medicaid. However, in order to receive long-term care benefits via ABD Medicaid, applicants have to show a need for that benefit. In other words, you qualify for long-term care benefits bit by bit, instead of all at once, like with HCBS Waivers benefits.

Qualifying for Medicaid When Over the Requirements

Seniors who are over their asset or income limits can still qualify for HCBS Waivers or ABD Medicaid by employing Medicaid Planning techniques. People who are over their income limit can use a Qualified Income Trust or the Medically Needy Pathway, depending on the state and program, to become income-eligible for Medicaid. Individuals over their asset limit can “spend down” their assets, but they can’t simply give them away, that would be a violation of the Look-Back Period.

These strategies tend to be complicated, and making a mistake using them can lead to an application being being denied and a penalty period of ineligibility. That’s why consulting with a Medicaid Planning professional is strongly recommended before attempting to use any of them on your own. Not only can these experts help dementia patients qualify for Medicaid and get the long-term care they need, they can also help maximize resources so seniors can enjoy a better quality of life or save something to leave for their family or both. Click here to find a Certified Medicaid Planner.

Finding Memory Care that Accepts Medicaid

The best way to find out if a memory care community allows it residents to receive Medicaid benefits at the facility is to ask the facility itself. There is no national database, and state databases are often difficult to find and use.

You can, however, use our referral service to generate a list of memory care residences in your area. Then you can call those memory care residences and find out their policy on Medicaid before taking the next steps in the process, which should include a trip to the residence to see it first-hand and ask questions. You should not, however, expect the referral service to answer Medicaid-related questions.

To learn more about state-specific Medicaid benefits in memory care, contact your state office or your local Area Agency on Aging, or read more at this website sponsored by the American Council on Aging.