Medicaid Benefits for Dementia & Alzheimer’s Care: At Home, In Memory Care & Nursing Homes

What is Medicaid?

Medicaid is a public health insurance program for financially limited Americans of all ages. It’s funded by the federal government and administered by state governments, which means Medicaid’s rules, benefits and even its name can change depending on the state.

Medicaid is often confused with Medicare, but they are not the same. Medicare is for all Americans age 65 and over. Medicaid, as mentioned above, is for Americans of all ages who are financially limited. There are, however, certain Medicaid programs designed specifically for seniors. These are the programs that can cover both medical needs and non-medical long-term care needs for individuals with Alzheimer’s disease and other dementias, and they are described next.

Medicaid Programs for Dementia

There are three Medicaid programs most relevant to seniors, including those with Alzheimer’s disease and other dementias: Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid.

Nursing Home Medicaid
Medicaid will cover essential nursing home expenses, including room and board, for qualified applicants in all 50 states and Washington, D.C. Nursing Home Medicaid is an entitlement, which means all qualified applicants are guaranteed coverage. This doesn’t mean they’re guaranteed a place in any nursing home they choose – not all nursing homes accept Medicaid and those that do might have a waitlist for new residents.

HCBS Waivers
These Medicaid programs cover long-term care for beneficiaries who need a high-level of care but live in their own home or the home of a loved one. In some states, HCBS Waivers also cover care in other settings in the community, such as assisted living residences, including memory care facilities, although they will not cover room and board. HCBS Waivers are not an entitlement. Instead, they have a limited number of enrollment spots, and once those spots are full, additional applicants will be placed on a waitlist.

ABD Medicaid
This is also known as regular or state Medicaid, but it should not be confused with the regular Medicaid that’s available to financially limited people of any age. ABD Medicaid will also cover long-term care in the community, but in most states its coverage is not as extensive as HCBS Waivers, and the ABD Medicaid financial requirements tend to be more restrictive. ABD Medicaid is an entitlement, so all qualified applicants are guaranteed coverage without wait.

Medicaid Benefits for Alzheimer’s & Dementia by Location

Medicaid is known for its long-term care nursing home benefits, but, as mentioned above, it also covers care at home. In some states, it covers care in other locations in the community, such as assisted living residences, memory care facilities, adult day care and adult foster care.

It’s important to remember that Medicaid’s long-term care benefits, eligibility requirements and rules can all vary by state. To learn more about the Medicaid rules in your area, find your state page here. Or consult with a professional.

At Home

Medicaid will cover care in a beneficiary’s home or the home of a loved one (if that’s where the beneficiary lives) in every state via HCBS Waivers and/or ABD Medicaid. This is in addition to covering doctor’s visits, prescription medication and short-term hospital stays, including emergency room visits. Again, these at home benefits can change depending on the state and the program, but in general they include:

• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Personal care assistance with the Instrumental Activities of Daily Living (shopping, cooking, cleaning, paying bills, medication management, etc.)
• Transportation
• Meal delivery
• Personal Emergency Response Systems/Medical Alert Devices
• Home modifications for safety and accessibility (hand rails, wheel chair ramps, stair lifts, etc.)
• In-home skilled nursing and doctor’s visits
• Physical therapy
• Occupational therapy

Many of these benefits are critical for Medicaid recipients with Alzheimer’s disease or other dementias who are living at home, especially the personal care assistance. What’s more, many Medicaid programs that cover at-home care allow the beneficiary to select a caregiver of their choice to provide the personal care assistance, including family members and even spouses in some states. In many cases, the family member is paid by Medicaid for care they were already providing. Learn more about how Medicaid compensates loved ones who provide care.

In Assisted Living/Memory Care

Many assisted living residences provide enough care to support people in the early stages of Alzheimer’s disease or other dementias. When the disease progresses and patients require a higher level of care, a memory care facility designed specifically for people with dementia can be an excellent option. Most states will cover long-term care services and supports in either of these settings via an HCBS Waiver or their ABD Medicaid program. However, Medicaid will not cover room and board expenses in assisted living residences or memory care facilities with only a few exceptions, like California’s Assisted Living Waiver, for example.

Medicaid benefits available in these settings can very by state and program. In general, they include:

• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Personal care assistance with the Instrumental Activities of Daily Living (shopping, cooking, cleaning, paying bills, medication management, etc.)
• Transportation
• Meal delivery
• Personal Emergency Response Systems/Medical Alert Devices

To find out if there’s an HCBS Waiver in your state that covers care in assisted living and/or memory care, consult the table on this webpage that organizes these Waivers by state.

In Adult Day Care

Adult day care centers can provide daytime supervision, meals, activities, exercise and, in most cases, healthcare services and supports. This can be critical for dementia patients who are living in the community. Many states cover adult day care costs via their ABD Medicaid program or an HCBS Waiver.

Adult day care is also a benefit of PACE (Program of All-Inclusive Care for the Elderly), which coordinates Medicaid and Medicare long-term care coverage for people who are over age 55 and require a high-level of care and live in the community. The National PACE Association estimates that more than half of program participants have dementia. All PACE programs have adult day health centers. The services in these centers can vary by location, but in general they include:

• Supervision
• Medical oversight
• Nursing services
• Vision, hearing, dental and foot care
• Physical therapy
• Exercise programs
• Social activities
• Lunch/snacks
• Transportation

In Adult Foster Care

Adult foster care homes are often the homes of private individuals who “take in” adults (including people with dementia) in return for compensation, sometimes from Medicaid. Medicaid’s coverage of adult foster care is difficult to generalize. In a few states, Medicaid has programs that pay for it, but most states do not have explicit laws defining their Medicaid policy for adult foster care, or laws that distinguish between adult foster care and assisted living. In those states, Medicaid can probably be used to cover care costs in adult foster care, but not room and board.

Adult foster care is similar to assisted living in that people with Alzheimer’s or dementia would live in this location full-time. However, there are far fewer residents in adult foster homes. Instead of the 10 to 100 residents that normally reside in an assisted living residence or memory care facility, there may be only 1 to 4 residents in an adult foster care home.

Adult foster care homes can have different names in different states. They can be referred to as adult family homes, group homes, adult family living, family care homes and community care foster family homes.

In Nursing Homes

As mentioned above, Nursing Home Medicaid will cover essential nursing home expenses for qualified applicants in all 50 states and Washington D.C. These expenses typically include:

• Room and board
• Nursing and medical services
• Medication management
• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Mental health counseling
• Emergency dental services
• Routine hygienic items and services (toothbrush, nail clippers, soap, shampoo, etc.)
• Diet appropriate meals
• Social activities
• Exercise programs

Essentially, Medicaid will cover any nursing home expenses that are considered medically necessary. However, there are plenty of nursing home expenses that Medicaid will NOT usually cover. These include:

• Private room
• Phone and TV
• Personal comfort items like sweets or tobacco
• Clothes
• Grooming items not considered routine
• Personal reading materials
• Flowers and other plants
• Specially prepared food
• Care services not considered medically necessary

Dementia Medicaid Eligibility

All applicants, including those with Alzheimer’s disease and other dementias, have to meet financial and medical eligibility requirements to qualify for Medicaid long-term care. The requirements can change depending on the state, the Medicaid program and the applicant’s marital status, and many of them are updated on an annual basis.

These eligibility requirements, including the asset and income limits, are discussed more below. For a detailed look at Medicaid eligibility criteria and benefits in a certain state, click here. For a quick eligibility test for your specific situation, click here.

Single Applicants

Financial Criteria
Applicants have to meet two financial requirements to qualify for Medicaid long-term care – an asset limit and an income limit. In most states in 2025, the individual asset limit for Nursing Home Medicaid, HCBS Waivers and ABD Medicaid is $2,000. Some assets are exempt from this limit, such as a primary vehicle, clothes, personal items, household furniture and appliances and, in many cases, a primary home. Most other assets are counted, including bank accounts, stocks, bonds, cash and anything that can be easily turned into cash. People who don’t meet their asset limit can still qualify for Medicaid, as we will discuss below.

The individual income limit for Nursing Home Medicaid and HCBS Waivers in most states in 2025 is $2,901/month. Almost all income is counted – Social Security benefits, pension payments, salaries, alimony, etc. It should be noted that Nursing Home Medicaid beneficiaries are required to surrender most of their income to the state to help cover the care of cost. For ABD Medicaid, the individual income limit in 2025 ranges from $967/month to $1,795/month, depending on the state.

Again, all of these limits can change depending on the state. To see if you or your loved meets the financial requirements in your state, take this free test from the American Council on Aging. Even if they don’t meet their limits, there are ways they can qualify with the help of a professional, like a Certified Medicaid Planner.

Medical Criteria
The medical, or functional, requirement for single applicants for Nursing Home Medicaid and for most HCBS Waivers is needing a Nursing Facility Level of Care (NFLOC). This means needing the type of constant supervision and access to skilled care that is typically associated with a nursing home.

A diagnosis of Alzheimer’s disease or another dementia does not guarantee a NFLOC. However, people who have been diagnosed with dementia will probably meet many of the NFLOC requirements. Plus, assessing cognitive abilities is part of the NFLOC evaluation in most states. It should be noted that some HCBS Waivers only require applicants to be “at risk” of needing a NFLOC.

Although needing a NFLOC is a consistent requirement across the country, exactly how a NFLOC is defined and evaluated can vary by state. For example, in some states, needing help with three of the five Activities of Daily Living (mobility, bathing, dressing, eating, toileting) might be required for a NFLOC designation. In other states, it might be only two of the five. All states will evaluate applicants, but they can use different tests and place emphasis on different areas, such as physician recommendations, in-person assessments or medical needs. An online ADL assessment tool is available here.

There is no medical requirement to receive basic healthcare coverage (doctor’s visits, prescription medication, short-term hospital stays, emergency room trips) via ABD Medicaid. However, to receive long-term care benefits through ABD Medicaid, the applicant/beneficiary must show a need for each specific benefit.

Married Applicants with One Spouse Applying

Financial Criteria
When only one spouse in a married couple is applying for Nursing Home Medicaid or HCBS Waivers, there are rules and allowances to support the non-applicant spouse, who will need adequate financial resources to continue to live on their own. Most of these rules do not apply to ABD Medicaid.

Medicaid considers the assets of married couples to be jointly owned. However, when only one spouse in a married couple is applying for Nursing Home Medicaid or HCBS Waivers, the non-applicant spouse (also known as the community spouse) is allowed to keep up to $157,920, depending on the state and the couple’s financial situation. This is known as the Community Spouse Resource Allowance (CSRA). The applicant spouse is still required to meet their state’s individual asset limit, which is $2,000 in most states in 2025.

After the applicant is enrolled in Medicaid, the community spouse can accumulate assets without affecting their beneficiary spouse’s eligibility. This is because the community spouse’s assets are not counted during Medicaid Renewals, which is the annual process states use to ensure Medicaid beneficiaries still meet their eligibility criteria.

The income of the community spouse is not counted when it comes to their spouse’s eligibility as a Nursing Home Medicaid or HCBS Waivers applicant or beneficiary. Plus, the beneficiary spouse is allowed to make monthly income transfers to low-income community spouses. This is known as the Monthly Maintenance Needs Allowance (MMNA), which also allows the applicant/beneficiary spouse to have income beyond their normal income limit, which is $2,901/month in most states in 2025.

When it comes to ABD Medicaid, the assets and income of both spouses are counted toward the asset and income limit whether one or both spouses are applying. However, the other major spousal protection, which is relevant to homeowners, applies to all three Medicaid long-term care programs: The value of the home will be exempt from the applicant spouse’s asset limit if the community spouse lives there. Learn more about Medicaid’s rules for homeowners.

Calculating the CSRA and the MMNA is so complicated that even state Medicaid agencies get it wrong more than half of the time. Before attempting to use any of these strategies on your own, it’s best to consult with a professional, like a Certified Medicaid Planner or an Elder Law Attorney.

Medical Criteria
The medical, or functional, criteria for married couples with one spouse applying is the same as it is for single applicants described above. For Nursing Home Medicaid in all 50 states and for most HCBS Waivers, the medical requirement is needing a Nursing Facility Level of Care (NFLOC). To receive long-term care benefits via ABD Medicaid, applicants must show a need for the specific benefit.

Married Applicants with Both Spouses Applying

Financial Criteria
The income limit for a married couple with both spouses applying for Nursing Home Medicaid or HCBS Waivers is $2,901/month per spouse, or $5,802/month combined, in most states in 2025. For ABD Medicaid, it ranges from $1,450/month to $2,658/month, depending on the state. The income from both spouses is counted, and almost all income is included.

The asset limit for a married couple with both spouses applying for any of the three Medicaid long-term care programs discussed above is $3,000 or $4,000 in most states in 2025.

Medical Criteria
The medical, or functional, criteria for married couples with one spouse applying is the same as it is for the other types of applicants described above. For Nursing Home Medicaid most HCBS Waivers, the medical requirement is needing a Nursing Facility Level of Care (NFLOC). For long-term care benefits via ABD Medicaid, applicants must display a need for the specific benefit.

Qualifying for Medicaid when Over the Limits

Even if someone is over their asset or income limit, they can still qualify for Medicaid by employing certain Medicaid Planning strategies. It can be hard to know when someone might need Medicaid coverage, but employing these planning strategies ahead of time can help seniors with dementia maximize their resources. They 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 can not 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. Applicants who violate the Look-Back Period will have their application denied and will receive a penalty period of ineligibility. 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.

When an Applicant Has Assets Over the Limit

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 asset limit. Some states do put a limit 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.

When an Applicant Has Income Over the Limit

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.

• In states that use Qualified Income Trusts (QITs), Medicaid beneficiaries make monthly deposits into the QIT in order to become income-eligible.
• In states 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.