All states have a Medicaid program for individuals who need nursing home or long term care—also called Institutional Medicaid—that provides general health coverage and coverage for nursing home services. These services include room and board, nursing care, personal care, and therapy services. Remember that Medicare covers some skilled nursing facility (SNF) care: up to 100 days per benefit period. If you do not meet Medicare’s requirements for the SNF benefit or you reached Medicare’s limit of covered SNF care, Medicaid may pay for this care.

Institutional Medicaid may pay for a stay in a nursing home if you:

• Need a nursing home level of care or meet nursing home functional eligibility criteria
• And, have income and assets below certain guidelines (remember, your state may have higher Medicaid income guidelines if you need nursing care, or a spend-down program to help you qualify)

States have different standards for determining whether you need a nursing home level of care. Generally, states assess your ability to function, as measured by your need for help with activities of daily living (such as toileting, bathing, and dressing).

When you have institutional Medicaid, Medicare still covers medical services you may need beyond your nursing care. For example, if you need to go to a doctor or specialist’s office, Medicare will pay first for most of these services, and Medicaid will pay second by covering your remaining costs, such as coinsurances, copayments, and deductibles.

There are a few things you should keep in mind before applying for Institutional Medicaid:

• The program will consider you and your spouse together when counting your income and assets, but you typically will be able to set aside a certain amount of your income and assets for your spouse to keep. This amount will not be counted when you apply for Medicaid.
• If you qualify, you will be able to keep a small amount of your income for a personal allowance. This amount varies by state, so contact your local Medicaid office to learn more. You will have to pay the remainder of your income to the nursing home.
• In most states, Institutional Medicaid has a look-back period of up to five years. This means that your state will count any assets you transferred in the past few years when determining your eligibility. If Medicaid determines that you transferred assets in violation of the Medicaid rules, it can penalize you by not paying for part or all of your nursing home stay.
• If you own your home, be sure to talk to an elder law attorney about how it will affect your Medicaid eligibility and coverage. Depending on your circumstances, the equity from your home may count as an asset. When you no longer need long-term care, or when you are deceased, such assets may be used to repay Medicaid for care that it covered for you.