Medicaid must cover nursing-home care in every state, but states may choose whether to cover assisted living. Nursing-home coverage acts as an entitlement, while assisted-living coverage usually works through capped waivers that pay for care but not room and board. That difference shapes eligibility, costs, and wait times for families facing dementia.
Home- and community-based services, called HCBS, support people outside institutions. Nursing-facility level of care means a person needs the daily health care and supervision a nursing home provides. For dementia, that need often involves round-the-clock cueing, safety checks, and help with eating, bathing, and medications.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Official resources:
- Register through Maryland’s official page — Use this page to review requirements and register directly.
- Apply through CMS’s official page — Use this page to review requirements and apply directly.
Table of Contents
- Why is one path guaranteed?
- Do both use the same health and money test?
- What does each setting actually pay for?
- Why can you qualify and still wait?
- What should dementia families check now?
Why is one path guaranteed?
Justice in Aging reports that federal Medicaid law requires coverage of nursing-facility care but does not require HCBS, creating an institutional bias toward nursing homes Justice in Aging primer. Families may find a nursing-home bed easier to fund than assisted living, even when assisted living fits the person better.
States that cover assisted living generally do so through optional HCBS authorities such as 1915(c) waivers. The Maryland Department of Health shows that covered services, settings, and availability vary by state and waiver. A move across state lines can change what is covered.
Do both use the same health and money test?
Many assisted-living waivers use the same health test as nursing homes. Applicants must still need nursing-facility level of care, so milder needs do not qualify.
The money test also applies, and Maryland illustrates the dual test. Maryland's Community Options Waiver requires nursing-facility level of care plus monthly income at or below 300 percent of SSI and countable assets of 2,000 to 2,500 dollars Maryland Community Options Waiver page. Limits vary by state and waiver, so use this only as an example:.
- confirm the person needs nursing-facility level of care
- check the waiver's monthly income limit
- count assets under that waiver's asset limit
What does each setting actually pay for?
Nursing-home Medicaid pays the institutional stay as a covered benefit. Assisted-living waiver dollars work differently and leave housing costs with the resident. CMS requires states to address exclusion of Medicaid payment for room and board in each 1915(c) application CMS waiver application help.
In practice, waiver funds can pay personal care, nursing tasks, and support services. Rent, food, and utilities stay non-covered. A family choosing assisted living should ask what the monthly room-and-board rate is and how it will be paid.
Why can you qualify and still wait?
Unlike nursing-home entitlement, 1915(c) waivers may cap enrollment through a maximum unduplicated participant count. Maryland keeps a waiver registry or waitlist, with nursing-facility residents excepted after 30 Medicaid-paid days. Financial eligibility alone does not open a slot.
Caps produce national waiting lists. KFF's 50-state survey found 41 states had HCBS waiting lists, with enrollment rising about 14 percent from 2024 to 2025 KFF waiting-list survey. A person with dementia may wait for assisted-living waiver services while needs grow.
What should dementia families check now?
Medicare does not solve the gap. Medicare.gov states that Medicare and most Medigap plans do not pay for non-medical long-term care in nursing homes, assisted living, or the community. Families need Medicaid, private long-term-care insurance, or private pay.
Also plan for estate recovery. Georgia Medicaid notes that states must pursue Medicaid estate recovery from people age 55 or older who received nursing-facility or HCBS services. Both nursing-home and assisted-living waiver benefits can trigger post-death claims. Ask the state waiver office about registry rules before signing an assisted-living lease.
