Can Medicaid pay for a nursing home if Mom has savings?

Updated October 6, 2026 · General information, not professional advice

Can Medicaid pay for a nursing home if Mom has savings?

Medicaid does pay for long-term nursing home care, but it is a needs-based program. If Mom has savings above her state's asset limit, she generally pays privately until her countable assets fall to that limit. After that, Medicaid can cover the nursing home, and most of her monthly income goes toward the cost of care, minus a small personal needs allowance.

Asset limits are set by each state. Many use a limit of around $2,000 for a single person, but some are far higher. For example, California reinstated a Medi-Cal asset limit on January 1, 2026, of $130,000 for one person.

Income rules matter too. In most states, Mom's Social Security and pension go toward the nursing home bill each month once she's on Medicaid, and Medicaid pays the rest at its approved rate.

What counts and what doesn't

Usually countable: checking and savings accounts, CDs, stocks, bonds, mutual funds, second homes, and the cash value of some life insurance.

Usually exempt (rules vary by state):

• Her home, in many cases, if she intends to return or a spouse or certain relatives live there. Home equity above a state cap may be counted; in 2026 states set that cap between $752,000 and $1,130,000.
• One vehicle.
• Personal belongings and household goods.
• Prepaid funeral or burial plans and small burial funds.
• Some retirement accounts, depending on the state and whether they are paying out.

How spend-down works

Spend-down means using savings on things that benefit Mom, at fair value, until she reaches the limit. Common permitted ways:

• Paying the nursing home privately.
• Paying off her debts, including a mortgage.
• Home repairs or modifications on her exempt home.
• Buying a prepaid, irrevocable funeral plan.
• Medical equipment, hearing aids, dental work or new clothing.

Keep every receipt. The state will ask for bank statements and will want to see where large amounts went.

Spending must be for Mom's benefit. Paying a family member for care can count as a permitted expense only with a written agreement at a fair rate, signed before the care is provided; otherwise the state may treat it as a gift.

The 5-year look-back rule

When Mom applies for nursing home Medicaid, the state reviews asset transfers made during the 60 months before the application. Gifts to children, selling property below market value, or adding someone's name to an account can trigger a penalty period: months during which Medicaid will not pay for her nursing home care.

The penalty is generally calculated by dividing the amount given away by the average monthly cost of nursing home care in the state. Some states use a shorter look-back; California applies a 30-month look-back to transfers made on or after January 1, 2026. Some transfers are allowed, such as to a spouse or a disabled child. Do not move money before talking with an elder law attorney.

If Dad is still living at home

Federal "spousal impoverishment" rules protect the spouse who stays home. In 2026:

• The at-home spouse can keep a share of the couple's countable assets, between a federal minimum of $32,532 and a maximum of $162,660, depending on the state's method.
• The at-home spouse may keep some of the nursing home spouse's income, up to a monthly maximum of $4,066.50 in 2026, if their own income is low.

These protections can make a big difference, so get the couple's assets reviewed before anything is spent or moved.

Next steps

1. Make a list of Mom's accounts, balances and any transfers in the last five years.
2. Ask the nursing home's business office whether it accepts Medicaid and has Medicaid beds.
3. Contact your state Medicaid office or local Area Agency on Aging for the current asset limit and application.
4. Consult an elder law attorney, especially if there's a spouse at home, a house or recent gifts.

seniorcare.si can show licensed nursing homes near your ZIP code that accept Medicaid.