Medicare & Medicaid
Coverage Guide
Understand what government programs DO and DON'T cover for senior living and long-term care
Understanding Government Coverage for Senior Care
One of the biggest sources of confusion for families is understanding what Medicare and Medicaid actually cover when it comes to senior living. The short answer: Medicare is extremely limited, Medicaid is comprehensive but has strict income/asset requirements.
Many families mistakenly believe Medicare will pay for assisted living or memory care—it doesn't. Medicare is health insurance designed for short-term medical treatment, not long-term custodial care. It covers skilled nursing for rehabilitation (post-hospital) but only for up to 100 days.
Medicaid, on the other hand, DOES cover long-term care in nursing homes for those who meet financial eligibility requirements. Some states also offer Medicaid waivers that cover assisted living and memory care, but these programs have waiting lists and limited availability.
This guide clarifies exactly what each program covers, eligibility requirements, application processes, and state-specific variations. Understanding these rules early helps families plan financially and avoid costly mistakes.
Critical Facts
- Medicare does NOT cover: Assisted living, memory care, or long-term nursing home stays
- Medicare DOES cover: Skilled nursing for rehab (up to 100 days post-hospital)
- Medicaid covers: Nursing homes in all states, AL/MC in some states (waivers)
- To qualify for Medicaid: Must spend down assets to state limits ($2,000-$15,000)
Medicare vs. Medicaid: Quick Comparison
Understand the fundamental differences
| Feature | Medicare | Medicaid |
|---|---|---|
| Who Qualifies | Age 65+ or disabled (any income) | Low income/assets (any age) |
| Program Type | Federal health insurance | Federal-state assistance program |
| Independent Living | ❌ Not Covered | ❌ Not Covered |
| Assisted Living | ❌ Not Covered | ⚠️ Some states (waiver) |
| Memory Care | ❌ Not Covered | ⚠️ Some states (waiver) |
| Nursing Home (Short-term) | ✓ Up to 100 days | ✓ Covered |
| Nursing Home (Long-term) | ❌ Not Covered | ✓ Fully Covered |
| Asset Limits | None (pay premiums) | $2,000-$15,000 varies by state |
| Income Limits | None | Varies by state (~$2,800/mo) |
Medicare
Medicaid
What Medicare Covers (and Doesn't)
Medicare has very limited coverage for senior living
Medicare DOES Cover
Skilled Nursing Facility (SNF) Care
Post-hospital rehabilitation only (not custodial care)
- ✓ 3-night hospital stay immediately before SNF
- ✓ Admitted to SNF within 30 days of hospital discharge
- ✓ Need daily skilled nursing or rehab (PT, OT, speech)
- ✓ Care ordered by doctor as medically necessary
Home Health Care
Part-time skilled nursing or therapy at home (IF homebound and medically necessary). Does NOT cover 24/7 care or assistance with ADLs as primary service.
Hospice Care
End-of-life palliative care (6-month prognosis). Can be provided at home, assisted living, memory care, or nursing home. Covers medications, medical equipment, counseling.
Medicare Does NOT Cover
Lifestyle choice, not medical necessity—never covered
Personal care/ADL assistance not considered skilled medical care
Dementia supervision/activities not skilled nursing—zero coverage
After 100 days, Medicare coverage ends completely
Help with bathing, dressing, eating—unless part of skilled nursing/rehab
Even in skilled nursing, Medicare doesn't cover the housing/meals portion
Medicare Advantage (Part C) plans may offer some additional benefits like meal delivery or transportation, but they still do NOT cover long-term assisted living or memory care monthly fees.
Medicaid Coverage for Long-Term Care
Medicaid IS the primary payer for long-term senior living care
What Medicaid Covers for Seniors
Nursing Homes (All States)
Medicaid covers long-term nursing home care in every state once you meet income/asset limits. This is the most common use of Medicaid for seniors.
- ✓ Room & board (semi-private room)
- ✓ All meals
- ✓ 24/7 skilled nursing care
- ✓ Medications & medical supplies
- ✓ Therapy services (PT, OT, speech)
- ✓ Personal care assistance
Assisted Living & Memory Care (Some States)
Many states offer Medicaid HCBS (Home & Community-Based Services) waivers that cover assisted living and memory care as alternative to nursing homes.
- ⚠️ Not available in all states
- ⚠️ Long waiting lists (months to years)
- ⚠️ Not all AL/MC facilities accept Medicaid
- ⚠️ May not cover full monthly cost (family pays difference)
- ⚠️ Must qualify medically (need assistance with ADLs)
Oregon, Washington, Arizona, Florida, North Carolina, Virginia, New Jersey, Connecticut
Medicaid Financial Eligibility Requirements
To qualify for Medicaid long-term care, you must meet both income and asset limits. Rules vary by state, but here are typical thresholds:
Income Limits (2026)
If married, healthy spouse can keep $2,465-$3,853/month of couple's income (2026 ranges)
Asset Limits (2026)
Spouse: Can keep $30,828-$154,140
- • Primary home (up to $713,000 equity in 2026)
- • One vehicle (any value)
- • Personal belongings, household items
- • Prepaid burial/funeral (up to $15,000)
- • Life insurance (face value up to $1,500)
Medicaid reviews all asset transfers made in the 5 years before application. Gifts, below-market sales, or improper transfers can result in penalty periods where you're ineligible for coverage. Consult an elder law attorney BEFORE moving assets.
VA Aid & Attendance Pension
Additional financial help for wartime veterans and surviving spouses
2026 Maximum Monthly Benefits
Both vet and spouse living
Veteran living alone
Widow/widower of wartime vet
Both spouses are veterans
Eligibility Requirements
Service Requirements
- ✓ Served during wartime period (WWII, Korea, Vietnam, Gulf War, etc.)
- ✓ 90 days active duty (at least 1 day during wartime)
- ✓ Discharged honorably
Disability Requirements
- ✓ Age 65+ OR
- ✓ Permanently disabled OR
- ✓ Resident of nursing home OR
- ✓ Need help with 2+ ADLs (bathing, dressing, etc.)
Financial Requirements (2026)
- • Net worth < $155,356 (vet + spouse combined)
- • Income below max pension rate (unless offset by medical expenses)
- • Primary home and vehicle excluded from net worth limit
- ✓ Assisted living monthly fees
- ✓ Memory care costs
- ✓ Nursing home care
- ✓ In-home care services
- ✓ Adult day care
Application Processing Time
VA Aid & Attendance applications currently take 3-6 months to process. Start the application process early. Benefits are paid retroactively to application date once approved. Work with a VA-accredited agent or elder law attorney for help—NEVER pay upfront "application fees" to unaccredited consultants.
How to Apply for Medicaid Long-Term Care
Step-by-step application process
Gather Financial Documents
Medicaid requires extensive financial documentation for the past 5 years (look-back period).
- Bank statements (5 years)
- Investment accounts
- Property deeds
- Vehicle titles
- Life insurance policies
- Retirement account statements
- Social Security award letter
- Pension documentation
- Tax returns (3 years)
- Trust documents
- Annuity contracts
- Record of all asset transfers/gifts
Consult an Elder Law Attorney (Highly Recommended)
Before applying, meet with an attorney who specializes in Medicaid planning to legally preserve assets.
Submit Application to State Medicaid Office
Apply through your state's Medicaid agency (often Department of Health & Human Services or Social Services).
Medical Assessment
State will evaluate if you meet "level of care" requirements for nursing home admission.
Wait for Approval Decision
Processing time varies by state: 30-90 days typical. You may start care before approval if facility accepts "Medicaid pending."
Annual Recertification
Medicaid eligibility must be renewed annually—submit updated financial documentation each year.
Medicaid Rules Vary by State
Select your state to find local Medicaid offices, waiver programs, and senior living communities that accept Medicaid
Need Help Navigating Medicare & Medicaid?
Our advisors help families understand coverage, find facilities that accept Medicaid, and connect with elder law attorneys for application assistance—completely free.
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