Medicaid plays a critical role in helping seniors and individuals with disabilities afford long-term nursing home care. Unlike Medicare, which only covers short-term rehabilitation under limited conditions, Medicaid is designed to fund ongoing custodial care for those who meet specific financial and medical requirements. Many families rely on Medicaid to cover the high costs of nursing home services, but questions often arise about how long this coverage lasts and what might cause it to end.
For those dealing with New Jersey’s Medicaid system, understanding the rules around long-term care coverage is essential, especially when planning for the future of a loved one. Working with a knowledgeable attorney can help avoid eligibility issues and protect assets legally. If you have questions about Medicaid planning, asset protection, or the use of Medicaid trusts, contact the experienced New Jersey Medicaid trust lawyers at The Matus Law Group at (732) 281-0060. Taking proactive steps today can help secure the care and financial stability your family needs tomorrow.
Medicaid Coverage for Nursing Home Care in NJ: The Basics
New Jersey Medicaid, administered through NJ FamilyCare, provides coverage for long-term nursing home care for residents who meet specific financial and medical eligibility requirements. This coverage is available under the Managed Long Term Services and Supports (MLTSS) program, which is designed for individuals who need a high level of ongoing care. Unlike Medicare, which only covers short-term rehabilitation in a nursing facility (typically up to 100 days and under strict conditions), Medicaid in New Jersey is structured to support individuals who require custodial care for an extended period.
To qualify for Medicaid nursing home benefits in New Jersey, applicants must meet two core eligibility standards:
- Financial Requirements: Applicants must have very limited income and resources. For a single individual in 2025, income must generally be below approximately $2,900 per month, and countable assets must be under $2,000. For married couples, different limits apply, and the spouse who remains at home may retain a larger portion of the couple’s joint assets under “spousal impoverishment” rules. These rules are in place to prevent the community spouse from becoming destitute while the other receives long-term care.
- Medical Need – Nursing Home Level of Care (NHLOC): The applicant must demonstrate that they require a nursing facility level of care. This typically means needing substantial assistance with daily living activities, such as bathing, dressing, and mobility, or requiring skilled nursing care. The state uses a formal assessment process, commonly involving tools like the “NJ Choice” assessment administered by the Division of Aging Services, to determine whether the applicant meets this standard. If the individual’s needs do not rise to this level, Medicaid will not pay for nursing home care.
A critical point to note is that Medicaid nursing home coverage in New Jersey is considered an entitlement. This means that anyone who meets the financial and medical criteria must be provided with benefits—there are no waiting lists or enrollment caps.
Once approved, Medicaid will cover the full cost of the nursing home, including room, board, and care services. However, residents are typically required to contribute most of their monthly income toward the cost of their care, aside from a small personal needs allowance they are permitted to keep. This structure allows eligible individuals to receive necessary long-term care without bearing the full financial burden themselves.
How Long Will Medicaid Pay for Nursing Home Care in New Jersey?
New Jersey’s Medicaid program supports long-term nursing home residents through ongoing monthly payments. This coverage is part of the state’s broader effort to provide sustained care for individuals who meet both financial and medical need requirements.
No Expiration Date for Coverage
Medicaid does not impose any time restriction on how long it will cover nursing home care. Once approved, residents may continue receiving benefits for as long as they need nursing home-level services and remain financially eligible. The program is designed to provide uninterrupted care for individuals with chronic conditions, degenerative diseases, or cognitive impairments that make independent living impossible. There are no annual or lifetime benefit caps tied to duration alone.
Annual Redetermination of Eligibility
Although there is no built-in time limit, recipients must go through periodic reviews, typically once a year. During this process, known as redetermination or recertification, the state evaluates whether the person still qualifies for Medicaid based on updated income, asset information, and medical status. The recertification helps ensure that resources go to those who continue to meet the established need for nursing facility care.
Lifelong Support for Eligible Residents
Many Medicaid recipients remain in nursing homes for the rest of their lives. As long as they continue to meet the requirements, Medicaid will pay the facility each month, minus the amount the resident is required to contribute from their income.
This long-term support offers stability for individuals who would not otherwise be able to afford the high cost of institutional care, which often exceeds $10,000 per month in New Jersey. For many families, this coverage is the only practical way to access quality long-term care without depleting all personal assets.
When and Why Medicaid Coverage Might Stop in a Nursing Home
Although New Jersey Medicaid has no set limit on how long it will cover nursing home care, coverage is not unconditional. Several changes in a recipient’s situation can result in the loss of Medicaid eligibility and, consequently, nursing home coverage.
Financial Ineligibility
Medicaid is strictly needs-based. If a resident’s income or assets increase beyond New Jersey’s financial eligibility limits, they may lose coverage. This often happens when someone receives an unexpected windfall, such as an inheritance, a lawsuit settlement, or an insurance payout, that temporarily pushes them over the asset threshold.
While Medicaid permits “spend down” strategies to reduce assets and regain eligibility, benefits can be terminated in the meantime. Annual recertification processes conducted by NJ FamilyCare assess whether applicants continue to qualify based on updated financial information. Failing to meet the requirements means coverage will be discontinued until eligibility is re-established.
No Longer Requiring Nursing Home Level of Care
Medicaid only covers care that is medically necessary. If a person’s health improves significantly and they no longer meet the Nursing Home Level of Care (NHLOC) criteria, Medicaid will stop paying for their nursing home stay. This situation is less common among long-term residents, but it can occur, particularly if someone was admitted for rehabilitation or temporary care. In such cases, the individual may be discharged to a lower level of care, such as assisted living or in-home care, possibly under different Medicaid programs if eligible.
Moving or Facility Discharge
Medicaid benefits are state-specific. If a nursing home resident moves out of New Jersey or is discharged from their current facility, NJ Medicaid will stop covering their care. Likewise, if the individual transfers to a facility that does not participate in Medicaid, coverage will not follow them. To maintain benefits, the person must reside in a Medicaid-certified nursing home within New Jersey. If relocation is necessary, they would need to reapply for Medicaid in the new state or arrange alternative funding for care.
Noncompliance With Program Requirements
Medicaid requires regular administrative follow-up. Missing paperwork or failing to respond to information requests, particularly during the annual renewal process, can result in suspension or termination of benefits.
Residents or their representatives must provide accurate and timely documentation related to income, assets, and medical condition. Delays, omissions, or misstatements may trigger a halt in coverage until the issue is resolved. This is one of the most preventable reasons for loss of benefits.
Death of the Beneficiary
Naturally, Medicaid coverage ends when the recipient passes away. The program will continue to pay for care only up to the date of death. Afterward, the state may initiate Medicaid Estate Recovery to recoup certain expenses paid on the individual’s behalf. This recovery process is separate and does not affect benefits while the person was alive, but it’s important to note that it could impact heirs or the person’s estate, depending on specific circumstances.
| Reason for Termination | Key Condition or Trigger | Notes or Criteria |
|---|---|---|
| Financial Ineligibility | Income or assets exceed New Jersey Medicaid eligibility limits | For 2025, a single applicant must have income at or below $2,901 per month and assets under $2,000 |
| No Longer Requiring Nursing Home Level of Care | Health improves and the person no longer meets the Nursing Home Level of Care criteria | Medicaid only covers medically necessary care; if the person no longer qualifies, they may be moved to a lower level of care |
| Moving or Facility Discharge | The person moves out of New Jersey or to a non-Medicaid-certified facility | Medicaid coverage only applies within New Jersey and to certified nursing homes |
| Noncompliance With Program Requirements | Missing paperwork or failure to respond during recertification | Annual renewal is required; missing deadlines or documentation can cause suspension or termination of benefits |
| Death of the Beneficiary | Beneficiary passes away | Medicaid coverage ends on the date of death; the state may later pursue estate recovery |
Common Misconceptions About Medicaid Nursing Home Coverage Duration
Medicaid’s long-term care rules can be challenging, and misconceptions about coverage duration are common. These misunderstandings often lead to unnecessary concern among families seeking reliable support for their loved ones in nursing homes. Clarifying these myths is essential to making informed care and financial decisions.
“Medicaid Only Pays for a Nursing Home for 5 Years”
This is a widespread misunderstanding. Medicaid does not limit coverage to five years. The confusion typically stems from the five-year look-back rule, which applies during the application process.
When reviewing eligibility, New Jersey Medicaid examines any transfers of assets made within five years prior to applying. Improper transfers during this period may result in a temporary penalty, delaying the start of benefits. However, once eligibility is established, Medicaid can cover nursing home care for as long as needed, well beyond five years, if necessary. The look-back rule affects when coverage can begin, not how long it lasts.
“Medicaid Will Kick You Out After a Few Years” or “You Can Only Stay on Medicaid Until You Hit a Certain Cap”
This is not accurate. Medicaid does not impose a maximum number of years or a dollar limit on how much care it will cover for an eligible individual. As long as the recipient continues to meet New Jersey’s financial and medical requirements, Medicaid coverage will continue without interruption.
This contrasts with many private long-term care insurance policies, which may impose time limits or benefit caps. Medicaid is structured to provide ongoing support for those who need it most.
“Medicaid and Medicare Both Limit Nursing Home Coverage to Around 100 Days”
This misconception conflates two separate programs with very different purposes. Medicare offers short-term coverage—up to 100 days of skilled nursing facility care, typically following a hospital stay and subject to strict eligibility conditions. Medicaid, on the other hand, is designed to cover long-term custodial care in a nursing home for individuals who qualify financially and medically. Once approved, there is no 100-day cap on Medicaid benefits. Coverage continues for as long as the individual remains eligible and in need of that level of care.
“After You’ve Been on Medicaid in a Nursing Home for a While, the State Will Take Your House or Kick You Off”
This is a partial truth often misunderstood. Medicaid does not require a person to sell their home or give it up simply because they’ve been in a nursing facility for an extended period. In New Jersey, a primary residence is usually considered a non-countable asset if the individual intends to return home or if a spouse or qualifying dependent continues to live there.
However, after the recipient passes away, the state may seek to recover the cost of care through the Medicaid Estate Recovery Program. This process may involve a claim against the estate, including the home, but it does not affect coverage during the person’s lifetime.
“If You Get Better or Go to the Hospital, You Lose Your Medicaid Bed”
This concern is understandable but not entirely accurate. If a Medicaid recipient is temporarily hospitalized and expected to return, New Jersey Medicaid allows for bed-hold payments so the nursing home can reserve the individual’s room for a limited time. This helps preserve continuity of care. If the person’s condition improves to the point where they no longer need a nursing home level of care, Medicaid coverage for that setting may end, but they may still qualify for Medicaid-covered services in another care environment, such as assisted living or home-based care. A short-term hospital stay or improvement in condition does not automatically mean an end to Medicaid support.
Planning Long-Term Care With The Matus Law Group
Understanding how long Medicaid will pay for nursing home care can ease uncertainty and support better decision-making for you and your loved ones. While Medicaid offers ongoing coverage for those who remain eligible, the rules around financial limits, care levels, and program compliance can be complex. Staying informed and prepared is the best way to protect your rights and ensure continuous care.
If you or a family member is considering nursing home care and has concerns about Medicaid eligibility or asset protection, The Matus Law Group is here to help. With deep experience in New Jersey Medicaid planning and trust-based strategies, our team of Medicaid trust attorneys can provide guidance tailored to your specific needs. Call The Matus Law Group today at (732) 281-0060 to schedule a consultation and begin planning with confidence.
