Medicaid Eligibility Requirements for Alzheimer’s Disease & Other Dementias
Overview
Medicaid will cover all or some of the cost of long-term care for qualified Alzheimer’s and dementia patients in a nursing home, their own home, the home of a loved one and, in most states, assisted living residences, including memory care. To qualify for Medicaid long-term care, all applicants need to meet functional and financial eligibility requirements.
The functional (medical) requirement for most of Medicaid’s long-term care programs is needing a Nursing Facility Level of Care (NFLOC). It’s important to note that a diagnosis of Alzheimer’s or other dementias does not guarantee a NFLOC designation, but some dementia patients will meet the NFLOC criteria. Medicaid’s financial requirements are all relatively low, but they can vary depending on the applicant’s state of residence and marital status, as well as the program.
Medicaid’s Functional Eligibility Criteria for Nursing Home Care Dementia and Alzheimer’s
For Nursing Home Care
The functional eligibility requirement for Medicaid’s nursing home coverage for all applicants, including those with Alzheimer’s disease and other dementias, is needing a Nursing Facility Level of Care (NFLOC). Nursing Home Medicaid will cover all essential nursing home expenses, including room and board, doctor’s visits, skilled nursing care, prescription medications, medication management, exercise programs, social activities, mental health counseling and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting).
As the name suggests, a NFLOC means needing the kind of constant supervision and care generally associated with a nursing home. However, the exact definition of a NFLOC can vary by state, as can the process used to determine if one needs a NFLOC or not. Some states may weigh cognitive issues more heavily than others. Some states may place extra emphasis on a primary care provider’s opinion about dementia patients; other states will lean more heavily on their own evaluation. In some states, needing hands-on help with three of the Activities of Daily Living is required for a NFLOC designation, in other states it may only be needing help with two of them.
What does not vary between states is that a diagnosis of Alzheimer’s disease or another dementia does not automatically lead to a NFLOC designation. Many Alzheimer’s and dementia patients will, in the end, receive the NFLOC designation, but only after being evaluated by the state.
For In-Home Care
HCBS Waivers
Medicaid’s Home and Community Based Services (HCBS) Waivers cover long-term care services and supports for beneficiaries, including Alzheimer’s and dementia patients, who live in their own home or the home of a loved one, and in most states they also cover long-term care in assisted living, including memory care. HCBS Waivers benefits can include in-home nursing, assistive technology, medical supplies, housekeeping assistance, chore services and personal care assistance with the Activities of Daily Living.
The functional requirement for most of Medicaid’s HCBS Waivers is also requiring a NFLOC, but a few HCBS Waivers only require applicants to be “at risk” of needing a NFLOC.
Aged, Blind and Disabled (ABD) Medicaid
Alzheimer’s and dementia patients can also receive long-term care benefits in the community via Aged, Blind and Disabled (ABD) Medicaid, which is also called regular or state Medicaid. ABD Medicaid’s long-term care benefits are similar to those for HCBS Waivers, but there tend to be fewer of them available and the coverage is focused on personal care assistance with the Activities of Daily Living.
There is no functional requirement to receive basic healthcare coverage via ABD Medicaid, but to receive long-term care via ABD Medicaid, applicants must meet the functional requirement of showing a need for that specific long-term care benefit. So, they tend to qualify for their long-term care one benefit at a time. ABD Medicaid applicants do not, however, need to require a NFLOC.
Medicaid’s Financial Eligibility Criteria for Dementia and Alzheimer’s Patients
All Medicaid long-term care applicants, including Alzheimer’s and dementia patients, must meet two financial eligibility requirements – an asset limit and an income limit. While these limits tend to be low in every state, there can be differences depending on the state, as well as the Medicaid program and if the applicant is single or married.
Many assets are counted toward the limit, but some are exempt. Countable assets include bank accounts, retirement accounts, CDs, bonds, stocks, cash and anything that can be easily liquidated into cash. Exempt assets can include a primary home (depending on the value and the owner’s equity interest), a primary vehicle, clothing, essential home furniture and appliances, and personal items like wedding and engagement rings. Applicants can’t simply give away their assets to meet the limit, but there are legal and ethical ways to reduce assets and qualify for Medicaid, which are discussed below.
Most income is counted toward the limit, including Social Security benefits, pension payments, salary, wages, rental income, business revenue, etc. The Basic Veterans Affairs (VA) Pension counts toward the income limit, but the VA Aid & Attendance Pension is exempt in many states. Holocaust restitution payments are exempt in every state.
For Nursing Home Care
In most states in 2026, the asset limit for Nursing Home Medicaid for all applicants, including dementia patients, is $2,000 for an individual and $3,000 for a married couple with both spouses applying. When only one spouse is applying, the non-applicant spouse can keep up to $162,660 of the couple’s assets depending on the state and the couple’s financial situation, thanks to the Community Spouse Resource Allowance, while the asset limit for the applicant spouse is $2,000 (in most states in 2026).
These asset limits can vary greatly by state. In New York, for example, the asset limit is $33,038 for an individual and $44,796 for a married couple with both spouses applying. In Illinois, it’s $17,500 for both. In California, the asset limit was completely eliminated in 2024, but it was reinstated on Jan. 1, 2026, at $130,000 for an individual and $190,000 for a married couple.
The income limit for Nursing Home Medicaid in most states in 2026 is $2,982/month for an individual and $5,964/month combined for a married couple with both spouses applying. When only one spouse is applying, the income of the non-applicant spouse is not counted and the income limit for the applicant spouse is $2,982/month (in most states). If the non-applicant spouse has limited income, the applicant/beneficiary spouse is allowed to transfer up to $4,066.50/month of their income to their spouse, depending on the state and the couple’s financial situation, thanks to the Minimum Monthly Maintenance Needs Allowance (MMMNA).
It’s important to note that Nursing Home Medicaid beneficiaries are required to give most of their income to the state to help cover the cost of care. They are only allowed to keep a small, monthly personal needs allowance (between $30 and $300, depending on the state), enough to pay premiums for other insurance (including Medicare), and enough to make Medicaid-approved allowance payments to low-income spouses
These income limits can also vary by state. In some states, like North Carolina, Maryland and Connecticut, an applicant’s income cannot exceed the cost of care. In Massachusetts and California, there is no set income limit for Nursing Home Medicaid. In New York, the Nursing Home Medicaid income limit is $1,836/month for an individual and $2,489/month for a married couples with both spouses applying.
For In-Home Care
In most states in 2026, the asset limit for in-home care via Home and Community Based Services (HCBS) Waivers or Aged, Blind and Disabled (ABD) Medicaid is $2,000 for an individual and $3,000 for a married couple with both spouses applying. When only one spouse is applying for HCBS Waivers, the non-applicant spouse can keep up to $162,660 of the couple’s assets, depending on the state and the couple’s financial situation, thanks to the Community Spouse Resource Allowance (CSRA), while the asset limit for the applicant spouse is $2,000 (in most states in 2026). But the CSRA does not apply to ABD Medicaid, so all the assets of both spouses will count toward the limit, which is $3,000 in most states in 2026 for married couples with one or both spouses applying.
The income limit for HCBS Waivers in most states in 2026 is $2,982/month and $5,964/month combined for a married couple with both spouses applying. When only one spouse is applying, the income of the non-applicant spouse is not counted and the income limit for the applicant spouse is $2,982/month (in most states). If the non-applicant spouse has limited income, the applicant/beneficiary spouse is allowed to transfer up to $4,066.50/month of their income to their spouse, depending on the state and the couple’s financial situation, thanks to the Minimum Monthly Maintenance Needs Allowance (MMMNA). HCBS Waivers beneficiaries are allowed to keep all of their income.
The individual ABD Medicaid income limit in 2025 ranges from $994/month to $1,845/month, depending on the state. The income limit for married couples with one or both spouses applying ranges from $1,491/month combined to $2,732/month combined. The MMMNA does not apply to ABD Medicaid.
As with Nursing Home Medicaid, all of these asset and income limits for HCBS Waivers and ABD Medicaid can vary significantly by state, as well as program. In Florida, for example, the individual asset limit for HCBS Waivers is $2,000, but it’s $5,000 for ABD Medicaid. In Missouri, the individual income limit for HCBS Waivers is $1,737/month, and the individual asset limit is $6,068.80. To see if you or your loved one meet your Medicaid eligibility requirements, including the income limit, use our online test.
How Alzheimer’s and Dementia Patients Can Qualify for Medicaid When Over the Limits
If any potential Medicaid applicants, including dementia patients, are over their asset or income limits, they can still qualify for Medicaid by employing certain Medicaid Planning strategies. Employing these planning strategies ahead of time can help seniors with dementia maximize their resources, although it can be hard to know when someone might need Medicaid coverage. Applicants can potentially save assets to leave for their family, and provide a better quality of life for themselves and their spouse. Without these planning techniques, many people with Alzheimer’s disease or other dementias will simply exhaust all of their resources paying for care on their own, and only then will they, or their family, realize they need to apply for Medicaid.
Before reading about Medicaid Planning strategies, you should have two important pieces of information. First, these planning strategies are complicated. Before attempting to use any of them on your own, consulting with a professional like a Certified Medicaid Planner or an Elder Law Attorney is strongly recommended.
Second, potential applicants cannot simply give away their assets or income to qualify for Medicaid. To make sure they don’t, Medicaid uses the Look-Back Period. In most states, the Look-Back Period is 60 months (five years). This means the state will “look back” into the applicant’s financial history for the 60 months prior to their application date to make sure they have not given away any assets or sold them at less than fair market value. This includes things like paying for a grandchild’s education or passing on a used family car. It should be noted that the Look-Back Period does not apply to ABD Medicaid applicants, and California and New York have their own Look-Back Period rules. Applicants who violate the Look-Back Period will have their application denied and will receive a penalty period of ineligibility.
Over Assets
People with assets beyond their Medicaid limit for eligibility can reduce or protect those assets until they do meet their limit. They can do this in multiple ways, including:
Spend Down
The most common way for people to reduce their assets is by spending on themselves or their spouse, if they’re married. This often includes paying for long-term care, making home modifications and paying off debt. They shouldn’t spend on things like second cars, vacation homes or luxury items that will be counted toward the asset limit. And spending on anyone else would be a violation of the Look-Back Period, as described above. To see how much you or a loved one with dementia will have to “spend down” in order to qualify for Medicaid, use this free Spend Down Calculator.
Medicaid Compliant Annuities
A dementia patient who needs Medicaid but is over their asset limit can purchase a Medicaid Compliant Annuity to reduce their assets because the value of the annuity will not count against the asset limit. However, the annuity’s monthly payouts will count against the income limit, so seniors should understand their financial situation and limits before using this strategy. An annuity must meet several standards in order to be Medicaid compliant, including being irrevocable, immediate and naming the state as beneficiary.
Irrevocable Funeral Trusts
Purchasing an Irrevocable Funeral Trust (IFT) can reduce assets to help one meet the asset limit because its value will not count against the limit. Some states do put a maximum on how much of an IFT’s value can be exempt from the asset limit, but many states do not because any money in a Medicaid beneficiary’s IFT that is not spent on their funeral and burial expenses must be given to the state.
Medicaid Asset Protection Trust
Any asset placed in a Medicaid Asset Protection Trust (MAPT) will be exempt from the asset limit, including a home. However, creating a MAPT violates the Look-Back Period, so they need to be created at least five years in advance (in most states) to be an effective Medicaid Planning tool. They are also expensive to create, and they usually only make sense for people with $100,000 or more in assets.
Over Income
There are two ways to reduce income and qualify for Medicaid, and their availability depends on the state and Medicaid program. Some states allow Medicaid applicants/beneficiaries to use a Qualified Income Trust to reduce income and maintain their eligibility, others use the Medically Needy Pathway, and a few use a combination.
For states/programs that use Qualified Income Trusts (QITs), Medicaid beneficiaries make monthly deposits into the QIT in order to become income-eligible.
For states/programs that use the Medically Needy Pathway, beneficiaries spend their income on healthcare expenses until they meet their Medically Needy income limit, at which point Medicaid takes over and covers the expenses, so it works like an insurance deductible. Applicants need to have a certain amount of monthly care expenses for this strategy to be effective, but that shouldn’t be an issue for people with dementia.