What Medicaid Covers for Dementia Patients in Nursing Homes

Medicaid will cover all essential nursing home costs, including room and board, for dementia patients who can’t live on their own and have limited financial resources. There are some nursing home expenses Medicaid will not cover, however, including a private room. Dementia Medicaid beneficiaries can receive financial assistance from family members to pay for nursing home expenses Medicaid won’t cover, but those contributions must follow certain guidelines. Plus, Nursing Home Medicaid beneficiaries must give almost all of their income to the state.

Medicaid’s Nursing Home Benefits for Dementia Patients

Medicaid will pay for the following long-term care services and supports for qualified applicants:

• Nursing and medical services: Regular healthcare provided by registered nurses that might include pain control, ostomy care, intravenous therapies or wound dressing, as well as well all medically-necessary care from physicians and specialists.
• Medication management: Assistance paying for, acquiring and taking all necessary prescription medication.
• Mental health services: Therapy for beneficiaries struggling with mental health issues.
• Routine hygienic items and services: Soap, toothbrush, nail clippers and any other items needed to stay healthy and clean, as well as any assistance the beneficiary needs to properly use these items.
• Room and board: All eating expenses, including diet appropriate meals, and living costs for a shared room. This is different from Medicaid’s assisted living and memory care coverage, which does not include room and board.
• Programs and activities: Social activities, exercise classes and other programs that promote well-being.

What Nursing Home Medicaid Does Not Cover

Nursing homes may also offer some services and extras that are not covered by Medicaid, such as:

• A private room
• Phone
• TV
• Special care services not considered medically-necessary
• Classes, events or activities beyond the standard residential program

There are some other items nursing home residents might need that are not covered by Medicaid, such as books, flowers, clothes, cosmetics and personal comfort items like tobacco or sweets. Medicaid beneficiaries can purchase these items using their Personal Needs Allowance, which is discussed in the next section.

Finally, it’s important to note that Medicaid does not cover short-term stays (100 days or less) in nursing homes, which are most common for people recovering from surgeries or traumatic events. Most seniors will have this type of nursing home care covered by Medicare.

Financial Requirements for Nursing Home Medicaid

All applicants, including those with Alzheimer’s disease and other dementias, must meet two financial eligibility requirements to qualify for Medicaid long-term care in nursing homes, at home and in memory care – an asset limit and an income limit. These limits can vary by state and marital status, but in most states in 2026 the individual asset limit for Nursing Home Medicaid is $2,000 and the individual income limit is $2,982/month.

In addition to meeting these limits, Nursing Home Medicaid beneficiaries are required to give most of their monthly income to the state to help cover the cost of care with a few exceptions, including the Personal Needs Allowance mentioned above. This allowance can range from $30 to $200 per month, depending on the state, and the beneficiary can spend it on whatever they want, like a cell phone, clothes, haircuts, etc.

Nursing Home Medicaid beneficiaries are also allowed to keep enough income to cover the following:

• Health insurance premiums, including Medicare
• Medical expenses not covered by Medicaid or another insurance
• Home maintenance costs
• Spousal income allowance – Married Nursing Home Medicaid beneficiaries who have a low-income spouse not enrolled in Medicaid can give some or all of their income to that spouse thanks to the Monthly Maintenance Needs Allowance, which ranges from $2,643.75/month (effective July 1, 2025 – June 30, 2026) and $4,066.50 /month (effective Jan. 1, 2026 – Dec. 31. 2026), depending on the state and the couple’s financial situation.
• Family/dependent allowance – Nursing Home Medicaid beneficiaries who claim minor children, adult children, parents or siblings for tax purposes can use part of their monthly income to support those family members. The amount of the allowance varies by state and situation.

For married couples with just one spouse applying for Medicaid, the income of the non-applicant spouse will not be counted toward the income limit of the applicant spouse. If the applicant spouse is accepted, the non-applicant spouse (also called the community spouse) does not have to contribute any of their income to Medicaid to help cover the cost of care.

Medical Requirements for Nursing Home Medicaid

In addition to the financial requirements, all Nursing Home Medicaid applicants must also meet the medical requirement of needing a Nursing Facility Level of Care (NFLOC). How a NFLOC is defined and evaluated can vary by state, although there is also plenty of crossover. All states will take into consideration an applicant’s ability to complete the Activities of Daily Living (mobility, bathing, grooming, eating, toileting), but in some states needing help with three of them might be required for a NFLOC designation, while in other states it might be needing help with two.

It’s important to note that a diagnosis of Alzheimer’s disease or any other dementia does not guarantee a NFLOC designation. However, cognitive functioning is taken into consideration during NFLOC evaluations and many dementia patients will meet the criteria, and even dementia patients that don’t initially meet the NFLOC criteria probably will in the future due to the progressive nature of the disease.

Family Supplementation Rules

In states that allow Family Supplementation, dementia patients with Nursing Home Medicaid can receive financial contributions from family members that supplement their existing Medicaid coverage. This can include paying for a private room, more hours of personal care or an in-room TV. If these contributions are made within Medicaid’s guidelines, they will not impact the dementia patient’s eligibility or coverage. If the contributions don’t follow Medicaid’s rules, the dementia patient’s eligibility and coverage would be in jeopardy.

Family supplementation payments can not be made directly to the Medicaid beneficiary. They can go directly to the facility or caregiver, but it should be noted these payments could impact the dementia patient’s Supplemental Security Income (SSI) eligibility. Family supplementation payments will not affect Medicaid or SSI eligibility if family members use a third-party Supplemental Needs Trust for their financial contributions.