Medicaid covers long-term care in two very different ways: through traditional nursing home placement or through Home and Community-Based Services (HCBS) waivers that let people receive care at home. Both options serve people who need a nursing facility level of care, but the experience, cost structure, and day-to-day reality differ significantly. Understanding the difference can shape where you or a loved one spends the next chapter of life.
What Is a Medicaid Waiver Program?
A Medicaid waiver is a special authorization that allows states to provide long-term care services outside of institutional settings. The name comes from the fact that CMS "waives" certain standard Medicaid rules to let states design programs tailored to their populations.
The most common type is the Section 1915(c) HCBS waiver. As of 2025, 46 states and Washington D.C. operate at least one 1915(c) waiver program, and across the country there are more than 267 CMS-approved waiver programs in total. Another type, the Section 1115 demonstration waiver, gives states broader flexibility to test new approaches to care delivery.
These programs cover services like:
- Personal care assistance (help with bathing, dressing, mobility)
- In-home skilled nursing visits
- Adult day care
- Home-delivered meals
- Transportation assistance
- Home and vehicle accessibility modifications (ramps, grab bars, stair lifts)
- Respite care for family caregivers
- Durable medical equipment
The setting can be your own home, a family member's home, adult foster care, or an assisted living residence, depending on the state program.
What Is Nursing Home Medicaid?
Nursing home Medicaid pays for care in a licensed nursing facility. It is an entitlement, meaning that anyone who meets the financial and functional requirements is guaranteed a spot. There is no waitlist and no enrollment cap.
The tradeoff is that residents must turn over nearly all of their income to cover the cost of care. Only a small Personal Needs Allowance, typically $30 to $200 per month depending on the state, is kept by the resident. Everything else goes toward the facility.
Eligibility: What Both Programs Have in Common
Both nursing home Medicaid and HCBS waivers require the same two things:
- Financial eligibility - income and assets below state-set limits
- Functional eligibility - a level of care need that meets the state's nursing facility standard
The financial limits for 2026 in most states are:
| Eligibility Factor | Individual | Married (applicant) |
|---|
| Monthly income limit | $2,982/month | $2,982/month |
| Asset limit | $2,000 | $2,000 (spouse may keep up to $162,660) |
The $2,982 figure represents 300% of the 2026 Federal Benefit Rate (FBR). Some states use a percentage of the Federal Poverty Level instead. In those states the limit may be lower, around $1,304 per month for an individual.
If you are over these limits, Medicaid planning strategies exist, but the rules are complex. Consulting a Medicaid planning attorney or elder law specialist before spending down assets is worth considering.
Key Differences: Waiver vs Nursing Home
| Factor | HCBS Waiver | Nursing Home Medicaid |
|---|
| Setting | Home, assisted living, community | Licensed nursing facility |
| Income you keep | Most of it (for rent, food, bills) | Personal Needs Allowance only ($30-$200/mo) |
| Waiting period | Often months to years (not an entitlement) | No waitlist (entitlement) |
| Enrollment cap | Yes, states set annual limits | No cap |
| Level of care required | Nursing facility level | Nursing facility level |
| Income limit (2026) | Up to $2,982/month in most states | Up to $2,982/month in most states |
| Asset limit | $2,000 individual | $2,000 individual |
| Spousal protection | Up to $162,660 for non-applicant spouse | Up to $162,660 for non-applicant spouse |
Why the Income Treatment Difference Matters
When you live in a nursing home, your only expenses are personal items since room, board, and care are bundled into the facility cost. That is why Medicaid requires nearly all income to go toward the cost of care.
When you live at home on an HCBS waiver, you still pay rent or a mortgage, utilities, food, and transportation. Medicaid accounts for this by letting waiver recipients keep most of their income. The program pays for the specific services listed in your care plan, not for your housing or living expenses.
This difference matters most for people with moderate incomes. Someone receiving $2,000 per month in Social Security and pension income would have almost nothing left in a nursing home. On a waiver, that same $2,000 covers their living costs while Medicaid pays for the home health aide.
Who Should Consider a Medicaid Waiver?
HCBS waivers are worth pursuing if:
- You or your loved one can safely live at home or in a community setting with support
- You have family or informal caregivers who can fill gaps between paid services
- Preserving independence and familiar surroundings is a priority
- You have income you need to keep to pay living expenses
A nursing home placement is typically the better option when:
- The level of medical or personal care need is too high for home-based services
- There are no family supports available
- The person needs 24-hour supervision that home care cannot reliably provide
- You need placement quickly and cannot wait on a waiver waitlist
The Waitlist Problem
One of the biggest practical obstacles to waiver programs is the waitlist. Because waivers are not entitlements, states can cap enrollment and put eligible applicants on a waiting list. As of recent data, roughly 700,000 people nationally sit on HCBS waiver waitlists, with waits ranging from a few months to several years depending on the state and the specific program.
Nursing home Medicaid has no waitlist. If you qualify, you qualify.
If someone needs care now and cannot wait, nursing home placement may be the only immediate option even if a waiver would be preferred. Some families place a loved one in a nursing home while also getting on the waiver waitlist, then transition to home care when a slot opens.
Types of People Served by Waivers
States can design waivers for specific populations. The most common targets are:
- Adults 65 and older with physical disabilities (46 states)
- People with intellectual or developmental disabilities (48 states)
- People with traumatic brain injury
- People with HIV/AIDS
- Adults with serious mental illness
- Children with complex medical needs
If you are looking for a waiver, the program name and eligibility criteria will differ by state. Your state Medicaid agency can tell you which waivers exist and who qualifies.
How to Apply
Step 1: Check financial eligibility
Compare your income and assets to the limits above. If you are close to the limit or over it, talk to a Medicaid planning specialist before applying. Mistakes in spend-down strategies can result in penalty periods.
Step 2: Request a functional assessment
Contact your state Medicaid agency or your Area Agency on Aging. They will schedule an in-home assessment to determine whether you meet the nursing facility level of care requirement. This is required for both nursing home Medicaid and HCBS waivers.
Step 3: Apply for both options simultaneously
If your goal is to stay home, apply for the relevant HCBS waiver and also apply for nursing home Medicaid as a backup. Being on a waitlist for a waiver does not prevent you from being approved for nursing home coverage.
Step 4: Get on the waiver waitlist early
If the waiver program you need has a waitlist, get on it as soon as possible. Eligibility is often determined at time of application, but your place in line depends on when you applied.
Step 5: Work with a care coordinator
Once approved for a waiver, your state will assign a care coordinator (sometimes called a case manager). They help develop your individual service plan and connect you with approved providers.
To find your state's Medicaid agency and check your eligibility estimate, visit the Benefits Navigator screener at benefitsusa.org/screener.
How Medicaid Waivers Are Funded
States and the federal government share the cost of Medicaid. The federal government pays a percentage called the Federal Medical Assistance Percentage (FMAP), which varies by state based on per-capita income. Lower-income states get a higher federal match.
For HCBS waivers specifically, states are required to demonstrate that the cost of providing waiver services will not exceed what the state would spend on nursing home care for the same population. This "cost-neutrality" requirement means waivers are designed to be budget-neutral or cheaper than institutional care.
State Examples
Every state runs its own set of waiver programs under different names. A few examples:
- Texas: The Community Living Assistance and Support Services (CLASS) waiver serves adults with related conditions. The STAR+PLUS program serves adults 65 and older and people with disabilities.
- California: Medi-Cal's Home and Community-Based Alternatives (HCBA) waiver targets individuals who would otherwise require nursing facility care.
- Florida: The Statewide Medicaid Managed Care Long-Term Care (SMMC LTC) program covers home and community-based services for eligible adults.
- New York: The Managed Long Term Care (MLTC) program covers home care and community services.
Program names, services covered, and waitlist lengths vary significantly. Check your state's Medicaid website for current program details.
Frequently Asked Questions
Can I qualify for a Medicaid waiver if I am already in a nursing home?
Yes. You can apply for an HCBS waiver while residing in a nursing home if your goal is to transition back to the community. Many states have "Money Follows the Person" transition programs specifically designed to help people move from nursing homes to home and community-based settings.
Do Medicaid waivers cover assisted living?
Many HCBS waiver programs do allow individuals to receive waiver services while living in an assisted living residence, though Medicaid typically does not cover the room and board costs at assisted living. The waiver pays for personal care, nursing, and other services but the room and board must be paid out of pocket or through other sources.
What is the difference between a 1915(c) waiver and a 1115 waiver?
A 1915(c) waiver is specifically designed for home and community-based services and is the most common type. As of 2025, there are 267 active 1915(c) waivers nationally. A 1115 waiver is a broader "research and demonstration" waiver that gives states more flexibility to experiment with Medicaid delivery and eligibility, sometimes including HCBS. Both can fund home-based long-term care.
What happens if I exceed the income limit for a waiver?
If your income exceeds the state's limit, you may still qualify through a Miller Trust (also called a Qualified Income Trust or QIT) in states that allow them. A Miller Trust is a legal arrangement where your excess income is deposited before being used for care costs, bringing your countable income below the limit. Not all states use Miller Trusts, so check with a Medicaid planner.
Is there a limit on how long I can receive waiver services?
There is no time limit on HCBS waiver services as long as you continue to meet the financial and functional eligibility requirements and the waiver program continues to be funded. Eligibility is typically redetermined annually.
Will Medicaid take my home if I choose a waiver instead of a nursing home?
Medicaid estate recovery rules are complicated. For nursing home residents, states are required to seek recovery from the estate after death. For HCBS waiver recipients, estate recovery rules vary by state. Some states seek recovery, others do not pursue it for waiver-only cases. Consulting an elder law attorney before applying is the best way to understand your state's specific rules.
How do I find out which waivers my state offers?
Contact your state Medicaid agency or your local Area Agency on Aging. You can also visit Medicaid.gov for a list of approved state waivers. The Benefits Navigator screener can also help you identify programs you may qualify for based on your state and situation.
What if I need care immediately and cannot wait for a waiver?
If you need immediate placement, nursing home Medicaid is the more reliable option because there is no waitlist. You can apply for nursing home Medicaid while simultaneously getting on the HCBS waiver waitlist. Once a waiver spot opens, you may be able to transition back to home-based care.
