When families begin exploring assisted living options, one of the first questions that surfaces is how to pay for it. With median costs for assisted living hovering around $6,000 per month nationally, many families wonder whether Medicaid, a program that helps millions of Americans cover health care costs, might help with the expense.

The short answer is: sometimes. Medicaid can help pay for assisted living in many states, but the rules, coverage, and eligibility requirements vary significantly depending on where you live. Understanding how Medicaid works for assisted living requires navigating a complex landscape of state-specific programs and waiver options.

What Medicaid is and what it covers

Medicaid is a joint federal and state program that provides health coverage to eligible low-income individuals, including seniors. Unlike Medicare, which is a federal health insurance program primarily for people 65 and older that covers hospital stays, doctor visits, and skilled nursing care, Medicaid is designed to help people with limited income and assets pay for a broader range of long-term care services.

One of the most important things to understand about Medicaid is that while it operates under federal guidelines, each state administers its own program. This means the rules about what Medicaid covers, who qualifies, and how much it pays can differ considerably from one state to another. What’s available in Florida may look quite different from what’s offered in Oregon or Pennsylvania.

For seniors, Medicaid can cover nursing home care, home health care services, personal care assistance, and, in some cases, certain services provided in assisted living communities. However, the extent of this coverage, and whether it’s available at all for assisted living, depends entirely on your state’s policies.

Does Medicaid pay for assisted living?

The answer depends on where you live. Unlike nursing home care, which Medicaid is federally required to cover, coverage for services provided in assisted living is optional. States can choose whether to offer Medicaid assistance for assisted living residents, and many do so through special programs called home- and community-based services (HCBS) waivers.

These waivers allow states to use Medicaid funds to help pay for care in community settings like assisted living rather than limiting coverage to institutional settings like nursing homes. The goal is to give seniors more options and allow them to receive care in less restrictive environments.

Currently, most states offer some form of Medicaid assistance for assisted living through these waiver programs, though a handful do not. Even in states that do participate, not all assisted living communities accept Medicaid, and the number of Medicaid-funded beds may be limited.

What Medicaid may cover in assisted living

When Medicaid does help pay for assisted living, it covers services rather than room and board. This is a crucial distinction that often surprises families.

Medicaid assistance in assisted living generally covers:

• Personal care services: This includes help with activities of daily living such as bathing, dressing, grooming, toileting, and transferring from bed to chair.
• Health-related services: Medication management, medication reminders, and health monitoring may be covered depending on the state’s program.
• Care coordination: Some states include care planning and coordination services to ensure residents receive appropriate support.

The specific services covered vary by state waiver program. For example, Wisconsin’s Family Care program provides comprehensive long-term care services in community-based residential settings, including personal care, nursing services, and therapies. Through Pennsylvania’s Community HealthChoices (CHC) program, Medicaid can fund personal care and other long-term services and supports for eligible residents living in assisted living residences or personal care homes.

What Medicaid does not cover in assisted living

Understanding what Medicaid doesn’t cover is just as important as knowing what it does pay for. It does not cover:

• Room and board: Medicaid does not cover the room and board portion of assisted living costs, which includes rent, utilities, meals, and housekeeping. Residents are expected to cover these basic living expenses themselves, typically through their Social Security income, pensions, long-term care insurance, Veterans benefits, or personal funds.
• Extra amenities and activities: Social activities, entertainment, beauty salon services, and other amenities that enhance quality of life are generally not covered by Medicaid.
• Application and community fees: Move-in fees, deposits, and similar charges are the resident’s responsibility.

The exact division between what Medicaid covers and what the resident must pay out of pocket depends on the state’s specific waiver program design.

How state programs work

For states that do allow Medicaid to help pay for assisted living, the process typically works through HCBS waiver programs. Each state designs its own waiver with specific names, rules, and coverage parameters. Some states have multiple waivers serving different populations or offering different levels of support. 

These programs often have enrollment caps, meaning there may be waiting lists. The application process requires documentation of both financial eligibility and medical necessity, and approval can take several weeks or months.

How can you find out the rules for your state? The best starting point is your state’s Medicaid office or Department of Health and Human Services website. You can also contact your local Area Agency on Aging, which can explain available programs and help you navigate the application process. Additionally, a qualified elder law attorney in your state can provide guidance on Medicaid planning strategies specific to your situation.

Eligibility requirements

Qualifying for Medicaid assistance with assisted living involves meeting both financial and health-related criteria. While specific thresholds vary by state, there are general patterns to understand.

Financial eligibility looks at both income and assets. For 2025, most states set income limits around $2,900 per month for an individual, though this varies. Asset limits are typically around $2,000 for an individual, though some assets, like your primary home (up to a certain equity value), one vehicle, personal belongings, and certain prepaid burial arrangements, are usually exempt from this calculation.

If your income or assets exceed the limits, you may still qualify through “spend down” strategies. This means using excess assets to pay for care or other allowable expenses until you meet the threshold. Certain legal and financial planning tools can also help. For example, Qualified Income Trusts (also called Miller Trusts) allow individuals whose income exceeds the limit to redirect excess income into a trust, making them financially eligible. Additionally, some asset transfers or conversions may be permissible, though Medicaid has strict rules and look-back periods to prevent improper asset transfers.

Working with an elder law attorney experienced in Medicaid planning is essential if you’re considering these strategies.

Health needs eligibility, often called functional or clinical eligibility, requires demonstrating that you need a certain level of care assistance. States typically assess whether you need help with activities of daily living such as bathing, dressing, eating, toileting, or transferring. Most states require that you need assistance with at least two or three of these activities, though the exact number varies.

This assessment is usually conducted by a nurse or social worker through your state’s Medicaid program, and it considers both your physical limitations and any cognitive impairments.

Finding the right path forward

Navigating Medicaid coverage for assisted living can feel overwhelming, especially when you’re already managing the emotional and practical challenges of finding the right care for yourself or a loved one. The state-by-state variations, waiver programs, and eligibility requirements create a complex system that’s difficult to understand without guidance.

If you’re exploring assisted living options and wondering how to make it affordable, connecting with professionals who understand both the care landscape and the financial aspects can make all the difference. Your local Oasis Senior Advisor can help you identify communities in your area that accept Medicaid, understand what your specific state offers, and navigate the care selection process with clarity and confidence. Find your local Oasis advisor to get personalized support as you make these important decisions.