Seven Things People Get Wrong About Medicaid When They're Older

What you've probably heard that isn't quite right

If you're over 65 and someone has told you that Medicaid is "only for poor people" or "won't cover nursing homes," you've heard a myth. Medicaid rules change at 65, and the version you might have heard about from a younger relative works differently for older adults. The program covers things Medicare doesn't — like long-term care, hearing aids, and dental work — but only if you understand which myths are steering you wrong.

These seven misunderstandings come up so often that they keep people from looking into coverage they may actually have access to. Each one has a grain of truth that makes it believable, which is exactly why it sticks.

Key Takeaways

• Medicaid for people over 65 is not the same program as Medicaid for working-age adults, and the income and asset limits are higher than most people think.
• You can have both Medicare and Medicaid at the same time — Medicaid fills gaps that Medicare leaves, like nursing home costs and dental care.
• Medicaid will pay for nursing home care, assisted living in some states, and home care services that Medicare will not cover.
• Your state's Medicaid program sets its own rules, so what your neighbor in another state told you may not apply where you live.
• Medicaid does not take your house if you are still living in it, even if you receive long-term care benefits.

Myth 1: "Medicaid is only for people with almost no money"

The income and asset limits for Medicaid do exist, but they are higher for people over 65 than for younger adults. The exact numbers vary by state, but most states allow a single person to have between $2,000 and $3,000 in countable assets and still receive Medicaid. For a married couple, one spouse can have significantly more if the other spouse is in a nursing home.

Income limits also vary. Some states use a "medically needy" pathway that lets people with higher income get Medicaid if their medical costs are high enough. Your state's Medicaid office can tell you the exact threshold where you live — it is not a guess.

Myth 2: "I have Medicare, so I don't need Medicaid"

Medicare and Medicaid are two separate programs that do different things. Medicare covers hospital stays, doctor visits, and some prescription drugs. It does not cover nursing home care, assisted living, hearing aids, dental work, or most vision care. Medicaid covers all of those things.

Many people over 65 have both programs at the same time. When you have both, Medicare pays first for what it covers, and Medicaid fills in the gaps. This combination is sometimes called "dual coverage," and it can mean you pay very little out of pocket for medical care.

Myth 3: "Medicaid won't pay for nursing homes"

Medicaid is actually the largest payer for nursing home care in the United States. Medicare covers only the first 100 days of skilled nursing care after a hospital stay, and only under specific conditions. After that, Medicaid takes over if you meet the income and asset limits.

Some states also use Medicaid to pay for assisted living facilities or home care services that let you stay out of a nursing home longer. The services covered vary by state, so ask your state's Medicaid office what long-term care options they fund.

Myth 4: "Medicaid will take my house to pay for my care"

Medicaid does not take your house if you are living in it, even if you receive nursing home benefits. Your primary residence is protected. This protection applies whether you own it outright or still have a mortgage.

After you die, Medicaid may try to recover costs from your estate, but the rules about this vary by state and depend on your age and the type of care you received. Your state's Medicaid office or a legal aid organization can explain what recovery means in your state.

Myth 5: "The rules are the same everywhere"

Medicaid is a federal program, but each state runs its own version with its own rules. Income limits, asset limits, covered services, and how long you have to wait for approval all differ from state to state. What your friend in another state told you about Medicaid may not be true where you live.

The only way to know what your state covers and whether you meet the requirements is to contact your state's Medicaid office directly or use your state's website. The Centers for Medicare and Medicaid Services (CMS) website has links to every state's program.

Myth 6: "If I give away my money, I can get Medicaid faster"

Medicaid has a "look-back" period that examines financial transfers you made in the months before you applied. If you gave away money or assets during this period, Medicaid may penalize you by delaying your coverage. The look-back period is usually five years for nursing home care.

This rule exists to prevent people from hiding assets to may have access to for benefits. If you are thinking about restructuring your finances before applying for Medicaid, talk to an elder law attorney first. Some transfers are allowed, but others will trigger a penalty.

Myth 7: "Medicaid covers everything Medicare doesn't"

Medicaid covers many things Medicare does not, but not everything. For example, Medicaid in most states does not cover cosmetic procedures, experimental treatments, or services that are not medically necessary. The specific services covered depend on your state's Medicaid program.

Your state's Medicaid office publishes a list of covered services. Before you assume Medicaid will pay for something, check that list or call and ask. Assuming coverage and then finding out later that you have to pay out of pocket is a costly mistake.

Frequently Asked Questions

Can I have Medicaid and Medicare at the same time?

Yes. Many people over 65 have both programs. Medicare pays first for services it covers, and Medicaid pays for services Medicare does not cover or pays for the portions Medicare does not cover. This is called dual coverage.

What is the income limit for Medicaid if I'm over 65?

Income limits vary by state. Most states allow monthly income between $1,000 and $2,500 for a single person, but some states use a "medically needy" pathway that allows higher income if medical costs are high. Contact your state's Medicaid office for the exact limit where you live.

Will Medicaid take my house if I go into a nursing home?

No. Your primary residence is protected from Medicaid recovery while you are living in it. After you die, your state may try to recover costs from your estate, but the rules vary by state. An elder law attorney can explain what this means in your situation.

How long does it take to get approved for Medicaid?

Processing times vary by state and by whether you are applying for regular Medicaid or emergency Medicaid. Some states approve applications in two to three weeks; others take longer. Your state's Medicaid office can tell you the typical timeline where you live.

What happens if I transferred money to my children before applying for Medicaid?

Medicaid looks back five years for nursing home care and looks at transfers you made during that time. Transfers may trigger a penalty that delays your coverage. If you have already made transfers, talk to an elder law attorney about what it means for your situation.