How to qualify for a nursing home? A comprehensive guide

Oct 24, 2025 4 min read •

senior care Finance Healthy Aging

According to the Centers for Medicare and Medicaid Services (CMS), eligibility for nursing home care is based on meeting state-specific medical and financial criteria. This guide breaks down exactly how to qualify for a nursing home, from the necessary health assessments to navigating the complex payment options.

Quick Summary

Qualifying for a nursing home requires a medical assessment certifying the need for institutional-level care and meeting financial eligibility standards, which vary by state and payment source, such as Medicaid, Medicare, or private insurance.

Key Points

Medical Need is Primary: Eligibility begins with a medical assessment confirming the need for 24/7 institutional-level care due to functional decline, chronic illness, or cognitive impairment.
Medicaid is Needs-Based: Qualifying for Medicaid involves strict income and asset limits, with different rules for single individuals versus couples. States also have a five-year 'look-back' period for financial transactions.
Medicare is Temporary: Medicare only covers short-term, rehabilitative skilled nursing care for up to 100 days following a qualifying hospital stay, not long-term custodial care.
Gather Essential Documents: The admission process requires a physician's order, medical history, proof of immunizations, financial paperwork, and legal documents like a Power of Attorney.
Veterans May Have Options: Eligible veterans and surviving spouses can apply for VA benefits, such as Aid and Attendance, to help cover the costs of long-term care.
Private Pay Until Depleted: Without other funding, care must be paid for privately until resources are depleted, after which Medicaid may be an option via a 'spend-down'.

Understanding Nursing Home Eligibility

Qualifying for a nursing home is a multi-faceted process that depends on a combination of medical necessity, functional ability, and financial resources. While federal guidelines exist, the specific rules for nursing home care eligibility often vary by state, particularly for government-funded programs like Medicaid. The first step typically involves a professional medical and functional assessment to determine if a nursing home or institutional level of care (NFLOC) is required for safety and well-being. After meeting clinical criteria, the next hurdles are financial, which depend on the intended payment method.

Clinical and Medical Requirements

The primary qualification for nursing home admission is a certified medical need for the level of care provided. This means a physician or qualified healthcare professional must evaluate the individual and determine that their needs cannot be safely met at home or in a less intensive setting, such as assisted living.

Commonly assessed factors include:

Functional Limitations: A major component is the inability to perform activities of daily living (ADLs), suchas bathing, dressing, eating, and transferring. Assessments like the Katz Index or Barthel ADL Index help quantify the level of assistance required.
Medical Issues: Chronic illnesses, complex medical conditions, or disabilities requiring ongoing, 24/7 skilled nursing care and supervision are key.
Cognitive Impairment: Significant cognitive decline, such as that caused by Alzheimer's or dementia, that compromises safety can be a major factor.
Behavioral Issues: Behavioral problems that cannot be managed in a home environment may necessitate institutional care.
Pre-Admission Screening (PASARR): For Medicaid and Medicare recipients, a federally mandated screening must be conducted to assess for mental illness or intellectual disabilities before admission.

Financial Requirements for Different Payment Options

Nursing home care is expensive, and understanding payment methods is crucial for qualification. The source of funding often dictates the financial criteria that must be met.

Medicaid

As the primary payer for long-term care in the U.S., Medicaid is a need-based program with strict financial eligibility rules.

Income Limits: A monthly income limit is set by each state, but may be around $2,829 for an individual in 2024. For those over the limit, a "spend-down" option or a Qualified Income Trust may be available.
Asset Limits: Medicaid has strict limits on "countable" assets, which generally must be below $2,000 for an individual in most states. Exempt assets typically include a primary residence (if the intent is to return), a vehicle, and personal belongings.
Look-Back Period: Medicaid reviews financial transactions from the past five years to prevent applicants from giving away assets to qualify for benefits. Uncompensated transfers can result in a period of ineligibility.
Spousal Protections: Specific rules are in place to protect the financial well-being of the non-applicant spouse (community spouse), including the Spousal Impoverishment Protection (SIP) and the Community Spouse Resource Allowance (CSRA).

Medicare

Medicare only covers short-term, skilled nursing care following a hospital stay of at least three days. It is not a source of payment for long-term nursing home custodial care. Coverage is limited to up to 100 days per benefit period, with a daily coinsurance payment starting on day 21.

Veterans Benefits

Eligible veterans and their spouses may be able to use VA benefits to help pay for nursing home care. Eligibility varies based on service-connected disability, financial need, and other factors. The VA offers several programs, including the Aid and Attendance benefit, to supplement income for long-term care.

Long-Term Care Insurance (LTCI)

If you have a private LTCI policy, qualification for benefits is typically triggered when a physician certifies a chronic illness and a need for assistance with a certain number of ADLs (commonly two) for a specified period (often 90 days).

The Nursing Home Admission Process

Once medical necessity is certified and a payment source is identified, the application process for admission begins.

Gather Necessary Paperwork: This includes a physician's order for admission, medical history, proof of recent tests and vaccinations, financial documentation, and any legal documents like a power of attorney or advanced directives.
Contact Facilities: Reach out to nursing homes that meet your medical and financial needs. It is crucial to verify if they are certified for your specific payment plan (e.g., Medicaid-certified).
Complete Applications: Fill out the facility's admission paperwork and return it promptly. Many facilities have waitlists, and the application date can determine your place in line.
Financial Assessment: The facility will conduct a financial assessment to verify your ability to pay for care. If applying for Medicaid, this is a formal step in the process. For more information on Medicaid, you can visit the official Medicaid.gov website.

Comparison of Payment Options


Feature	Medicaid	Medicare	Private Pay	Long-Term Care Insurance
Covers Long-Term Care?	Yes, if financially eligible	No, only short-term skilled care	Yes, until funds are spent	Yes, according to policy
Eligibility Criteria	Financial and functional needs	Recent hospital stay + need for skilled care	Ability to pay out-of-pocket	Impairment with ADLs or cognitive decline
Asset Limits	Very strict; typically $2,000 for single individual	N/A	None	None for receiving benefits (pre-qualification required)
Cost	Income-based coinsurance after eligibility	Coinsurance starts day 21	Full, private rates	Premium payments + potential deductible
Coverage Length	Indefinite, as long as eligibility is maintained	Limited to 100 days per benefit period	Indefinite, until funds are exhausted	Dependent on policy maximums

Conclusion

Qualifying for a nursing home is a detailed process that involves navigating complex medical, functional, and financial criteria. For many, Medicaid will be the primary source of funding, but its strict financial rules require careful planning, often years in advance, to avoid spending down all assets. Medicare offers temporary, post-hospitalization care, while veterans benefits and private insurance offer other options for those who qualify. Consulting an elder law attorney or a qualified social worker can provide invaluable guidance to ensure a smooth transition and secure the care needed for a loved one.

Frequently Asked Questions

A 'spend-down' occurs when an individual's income or assets are above the state's Medicaid limits. They must use their excess resources on qualifying medical expenses or other approved expenditures until they meet the eligibility threshold.

The Medicaid look-back period is a 60-month (five-year) period during which the state examines financial records for any uncompensated transfers of assets. Gifting assets within this timeframe can result in a penalty period of ineligibility.

Yes, in many cases, your primary residence is considered an exempt asset for Medicaid purposes, especially if you intend to return home. However, there are rules about its value, and the state may attempt to recover costs from the estate after death.

Medicaid has spousal impoverishment protections that allow the non-applicant spouse (community spouse) to keep a portion of the couple's combined income and assets to prevent financial hardship. The specifics vary by state.

The coverage provided by long-term care insurance depends on the specific policy. It often has daily or monthly benefit limits and a maximum coverage period. It may not cover all costs, and there is typically an elimination period before benefits begin.

Essential legal documents include a durable power of attorney for finances, a healthcare power of attorney or advanced directive, and a will. These ensure a designated person can make decisions on your behalf.

Skilled nursing care requires the daily involvement of a licensed nurse or therapist, such as for wound care or IV medications. Custodial care involves assistance with daily activities like bathing and dressing and is not typically covered by Medicare.

References

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.