What Medicaid Covers for Seniors

Seniors who qualify for Medicaid receive comprehensive health coverage plus long-term care benefits that Medicare does not provide:

• Nursing home care — Medicaid is the primary payer for long-term nursing home stays
• Home and community-based care — personal care, home health aides, adult day programs
• Medicare cost-sharing — Medicaid can pay Medicare premiums, deductibles, and copays for dual-eligible seniors
• Prescription drugs (through Medicaid or Medicare Part D with Medicaid assistance)
• Dental, vision, and hearing services (varies by state)
• Transportation to medical appointments

Eligibility Rules for Seniors

Seniors applying for long-term care Medicaid face stricter financial eligibility rules than those applying for standard Medicaid. Both income and assets are evaluated.

Income limits for long-term care Medicaid are typically set at 300% of the SSI benefit rate — approximately $2,829/month for an individual in 2026. Asset limits are typically $2,000 for an individual, though certain assets are exempt.

• Income limit: ~$2,829/month for individuals (varies by state)
• Asset limit: typically $2,000 for individuals
• Exempt assets: primary home (with conditions), one vehicle, personal belongings, burial funds
• Non-exempt assets: bank accounts, investments, second homes, most retirement accounts

Spousal Impoverishment Protections

When one spouse needs nursing home or home-based long-term care, federal law protects the other spouse (the "community spouse") from being left impoverished. These spousal impoverishment rules allow the community spouse to keep a portion of the couple's income and assets.

In 2026, the community spouse can typically keep between $30,828 and $154,140 in assets (the exact amount varies by state) and a minimum monthly income allowance. These protections are important for married couples navigating Medicaid planning.

The Five-Year Lookback Period

Medicaid has a five-year lookback period for long-term care applications. This means that when you apply, the state reviews all asset transfers made in the five years before your application date. Transfers of assets for less than fair market value during this period can result in a penalty period during which Medicaid will not pay for care.

This rule is designed to prevent people from giving away assets to qualify for Medicaid. Proper Medicaid planning — ideally done years in advance — can help families navigate this rule legally.

Medicaid and Medicare Together

Many seniors qualify for both Medicare and Medicaid — called "dual eligibility." For dual-eligible seniors, Medicaid can pay Medicare premiums, deductibles, and copays, significantly reducing out-of-pocket costs. Medicaid also covers services that Medicare does not, particularly long-term custodial care.

Medicaid Planning

Because of the complexity of senior Medicaid rules — particularly the asset limits and lookback period — many families work with a Medicaid planning specialist or elder law attorney to structure their finances in a way that preserves assets while qualifying for needed care. This planning is most effective when done well in advance of needing care.