What nursing homes can charge you for
A nursing home cannot take all your money, but it can charge you for the care and services you receive there. What they charge depends on whether you pay privately, use Medicaid, or have Medicare coverage. Private-pay residents typically pay a daily or monthly rate that covers room, board, nursing care, and basic services. Medicaid covers nursing home costs for people who meet income and asset limits, but the resident is usually required to contribute their income toward the cost of care — this is called the patient responsibility or resident contribution.
The amount a resident must contribute varies by state. Medicaid allows residents to keep a small monthly personal needs allowance (usually $30 to $75, depending on your state) for things like haircuts, toiletries, or phone calls. The rest of your income — Social Security, pensions, or other benefits — goes to the nursing home to pay for your care. Your home, one vehicle, and certain other assets are typically protected and do not count against Medicaid limits, but liquid assets like savings accounts do.
Key Takeaways
- Nursing homes can require you to pay for care from your income and assets, but Medicaid protects your home and allows you to keep a small monthly allowance for personal needs.
- Each state sets different limits on how much money and assets you can have and still receive Medicaid; these limits change yearly.
- A nursing home cannot legally take money from you beyond what is owed for services rendered, and they must provide a written cost breakdown before or when you admit.
- If you believe a nursing home is taking money illegally or charging for services you did not receive, you can file a complaint with your state's long-term care ombudsman.
How Medicaid protects your assets
Medicaid has rules designed to keep nursing home residents from losing everything. When you explore for Medicaid to cover nursing home care, the program counts your "countable assets" — mainly cash, bank accounts, and investments. The asset limit varies by state but is often around $2,000 for a single person (some states allow slightly more). However, certain assets do not count toward this limit and are protected.
Your primary home is protected as long as you or a spouse still lives there or you intend to return home. One vehicle is also protected, regardless of its value. Household goods, personal items, and wedding rings are not counted. Some states protect additional items like life insurance or burial funds up to a certain amount. If you are married and one spouse is in a nursing home while the other lives at home, the spouse at home can keep more assets — this is called the community spouse resource allowance, and the amount varies by state.
Before you spend down your savings to may have access to for Medicaid, talk to a Medicaid planner or elder law attorney in your state. The rules are complex, and some strategies — like giving money away or setting up trusts — can affect when you become Medicaid-may be able to access. Improper transfers can result in a penalty period during which Medicaid will not pay for your care.
What happens to your income when you enter a nursing home
When you move into a nursing home and start receiving Medicaid, most of your monthly income goes directly to the facility to pay for your care. This includes Social Security, pensions, annuities, and any other regular income. The nursing home is required to set up a separate account for your funds and keep detailed records of what they receive and spend on your behalf.
You are allowed to keep a small portion of your income each month for personal needs — this is the personal needs allowance mentioned earlier. The amount is set by your state and typically ranges from $30 to $75 per month. You can use this money for things like clothing, haircuts, phone service, or gifts. Any income above what the nursing home charges and your personal needs allowance should be held in trust for you; the facility cannot straightforward keep it.
If you have income that exceeds the cost of care plus your personal allowance, the extra money should be returned to you or held in your account. Ask the nursing home for a monthly statement showing what income they received, what they charged, and what balance remains in your account. If the numbers do not add up, request an explanation in writing.
Red flags that a nursing home may be overcharging
Watch for these warning signs that a nursing home may be taking money improperly. Charges for services you did not receive — such as therapy sessions you never had or medications you were not given — are illegal. Surprise charges for items that should be included in your daily rate, like basic hygiene supplies or standard meals, may also be improper. Some facilities charge extra for things like phone service, cable, or activities, which is legal, but they must disclose these charges upfront and get your written consent before charging.
Another red flag is if the nursing home refuses to show you an itemized bill or a monthly accounting of your funds. By law, they must provide this information. If you notice money missing from your account, charges that seem unusually high, or the facility pressuring you to sign documents without explaining them, these are reasons to ask questions and seek help.
If a family member is managing the resident's finances, watch for signs of financial exploitation — sudden large withdrawals, changes to the will or power of attorney, or the family member preventing the resident from seeing bank statements. Financial abuse of nursing home residents is a crime, and it should be reported when ready.
How to challenge improper charges or missing money
If you believe a nursing home is overcharging or mishandling your money, start by asking for a written explanation from the facility's business office. Request an itemized bill showing exactly what services you received and what you were charged. Keep copies of all statements, bills, and correspondence. If the nursing home cannot explain the charges or if the explanation does not make sense, escalate your concern in writing to the facility administrator.
Your state's long-term care ombudsman is a free resource that investigates complaints about nursing homes. The ombudsman can look into billing disputes, financial exploitation, and other violations. You can find your state ombudsman by calling the Eldercare Locator at 1-800-677-1116 or visiting the National Long-Term Care Ombudsman Resource Center website. The ombudsman can also help if you are having trouble getting records or if the nursing home is retaliating against you for asking questions.
If you suspect criminal theft or fraud, you can file a report with your state's attorney general office or local law enforcement. Many states also have adult protective services agencies that investigate financial abuse of seniors. An elder law attorney can review your situation and advise you on whether to pursue a civil claim against the facility.
Understanding the difference between Medicare and Medicaid coverage
Medicare and Medicaid cover nursing home care differently, and it is important to know which one you have. Medicare is a federal health insurance program for people 65 and older (and some younger people with disabilities). Medicare covers up to 100 days of skilled nursing care per benefit period, but only after a may have access to hospital stay of at least three days. Medicare does not cover custodial care — help with daily activities like bathing or dressing — and it does not cover long-term stays.
Medicaid is a joint federal and state program for people with low income and limited assets. Medicaid covers both skilled nursing care and custodial care for as long as you need it, as long as you remain Medicaid-may be able to access. Unlike Medicare, Medicaid requires you to contribute your income toward the cost of care. Most people who stay in a nursing home for more than a few months end up on Medicaid because Medicare's coverage runs out.
If you have both Medicare and Medicaid (called "dual may be able to access"), Medicare pays first for the services it covers, and Medicaid pays for services Medicare does not cover or after Medicare benefits run out. Understanding which program is paying for your care helps you know what you should and should not be charged for.
What to ask your nursing home about costs before you admit
Before you or a family member enters a nursing home, ask for a complete written list of all charges. This should include the daily or monthly room and board rate, nursing care, medications, therapy, meals, and any other services included in that rate. Ask separately about charges that are not included — such as phone service, cable television, activities, or specialized equipment — and what those charges are. Request a sample bill or statement so you can see exactly how charges are itemized.
Ask whether the facility accepts Medicaid and, if so, whether the Medicaid rate is the same as the private-pay rate or lower. Ask what happens to your personal needs allowance and how the facility will account for it. Ask who you should contact if you have questions about your bill and how often you will receive statements. Get all of this information in writing, and keep it with your admission paperwork.
Frequently Asked Questions
Can a nursing home refuse to admit me if I cannot pay upfront?
No. A nursing home cannot refuse to admit you based solely on your inability to pay when ready. If you are Medicaid-may be able to access or will become may be able to access soon, the facility must admit you. However, they can require a deposit or payment plan if you are paying privately. Ask about their payment policies before you admit.
What if I run out of money while I am in the nursing home?
If your assets fall below your state's Medicaid limit, you can explore for Medicaid to cover your care going forward. The nursing home's social worker or business office can help you with the process. Medicaid will cover your care once you are approved, even if you have no money left.
Can the nursing home take my house to pay for care?
No. Your primary home is protected under Medicaid rules and cannot be taken to pay for nursing home care while you are alive. However, after you pass away, Medicaid may try to recover costs from your estate, which could include a lien against your home. An elder law attorney can explain your state's recovery rules.
Who should I contact if I think the nursing home is stealing from me?
Contact your state's long-term care ombudsman (call 1-800-677-1116 to find yours), your state attorney general's office, or local law enforcement. If a family member is involved, also contact adult protective services. The ombudsman can investigate for free and does not require you to hire a lawyer.
Can I move my money to my children to protect it before entering a nursing home?
Giving money away before explore for Medicaid can trigger a penalty period during which Medicaid will not pay for your care. Medicaid looks back five years at your financial transfers. Talk to a Medicaid planner or elder law attorney before moving any money — there are legal ways to protect assets, but timing and method matter.