Oscar is having a difficult time living on his own. He needs more and more help with the daily housekeeping and regular chores. He’s forgetting to take his medication. He’s even having a harder time getting out of bed, taking a shower and getting dressed. Despite those challenges, Oscar doesn’t want to move into a nursing home, even though he’s qualified for Medicaid nursing home coverage. His family doesn’t want him to move, either, but they don’t have the time or resources to give him all the care and support he needs.

The truth is, Medicaid doesn’t want Oscar to move into a nursing home. That’s because nursing home care is, in general, more expensive than providing long-term care in the home. Which is why Medicaid has been expanding its long-term care coverage for beneficiaries who live at home or other places in the community. In fact, Medicaid even has a program to help beneficiaries who are living in a nursing home return home.

These Medicaid-funded nursing home alternatives include Home and Community Based Services (HCBS) Waivers, Aged, Blind and Disabled (ABD) Medicaid programs, the Program of All-Inclusive Care for the Elderly (PACE), Living Independence for the Elderly (LIFE) and Money Follows the Person. However, not all these programs are available to everyone nor are they in every state. Connect with one of our Certified Medicaid Planners to learn more about eligibility, availability and the benefits of these nursing home alternatives.

Home and Community Based Services (HCBS) Waivers

Receiving long-term care services and supports through Home and Community Based Services (HCBS) Waivers is a common nursing home alternative for senior Medicaid beneficiaries.

To qualify for an HCBS Waiver, seniors must meet medical and financial requirements. The medical requirement is needing a Nursing Facility Level of Care (NFLOC), which means needing the kind of constant care and supervision usually associated with a nursing home. The exact definition of a NFLOC and how it is evaluated depends on the state. The financial requirements for HCBS Waivers in most states in 2025 is an individual asset limit of $2,000 and individual income limit of $2,901/month, but these limits can also vary by state and marital status.

The names, availability and benefits of HCBS Waivers depends on the state and the Waiver program, but they can often include:

• Case management
• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Personal care assistance with the Instrumental Activities of Daily Living (such as shopping, cooking, housekeeping, and medication management)
• Adult day care
• In-home skilled nursing care
• Home modifications (such as wheelchair ramps, grab bars, and widening doorways)
• Vehicle modifications
• Meal delivery
• Transportation (medical and non-medical)
• Respite care for primary caregiver
• Personal Emergency Response Services (PERS)

The locations where these benefits can be provided also depends on the state and the Waiver program. Every state that offers HCBS Waivers has at least one that will cover long-term care services and supports in the beneficiary’s home or the home of a family member. In some states, HCBS Waivers can also cover long-term care benefits in assisted living facilities, adult day care, adult foster care, group homes or memory care units for seniors with Alzheimer’s disease and other dementias. To learn more about HCBS Waivers, click here.

Aged, Blind and Disabled (ABD) Medicaid

Aged, Blind and Disabled (ABD) Medicaid includes programs that can fund nursing home alternatives for qualified beneficiaries. There is no medical requirement to qualify for healthcare coverage through ABD Medicaid, but beneficiaries who wish to receive long-term care benefits must show a need for those benefits. The financial requirements for ABD Medicaid in most states in 2025 is an individual asset limit of $2,000 and an individual income limit that ranges from $967 to $1,795/month, depending on the state. These limits can also vary by the applicant’s marital status.

ABD Medicaid can also be referred to as state plan or regular Medicaid for seniors, but it should not be confused with the state plan or regular Medicaid that is intended for financially limited people of all ages.

Long-term care benefits available through ABD Medicaid can vary by state, but in general they are similar to the long-term care benefits listed above under HCBS Waivers – case management, adult day care, home/vehicle modifications, transportation, Personal Emergency Response Systems and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting) and the Instrumental Activities of Daily Living (such as shopping, cooking, housekeeping, and medication management).

Like HCBS Waivers, ABD Medicaid in all 50 states will cover these benefits for seniors in their own home or the home of a family member. In some states, ABD Medicaid will also cover long-term care benefits in other settings, such as assisted living facilities, adult day care, adult foster care, group homes or memory care units for seniors with Alzheimer’s disease and other dementias.

As you can tell, your state of residence makes a major difference when it comes to ABD Medicaid programs and HCBS Waivers.

Consumer Directed Care

Some HCBS Waivers and a few ABD Medicaid programs offer a Consumer Directed Care option, which gives beneficiaries more decision-making power and control over their care. This can include being able to select caregivers of their choice for certain benefits, like personal care assistance with the Activities of Daily Living. In most cases, these caregivers can be family members, such as an adult child or grandchild. Some Consumer Directed Care programs also allow seniors to select long-term care goods, such as a wheelchair, of their own choice.

Most of these Consumer Directed Care options offer the beneficiary assistance when it comes to the financial details of “employing” a caregiver, such as tracking hours, calculating paychecks and withholding taxes. They will also provide assistance when it comes to managing a healthcare budget – allocating resources, locating market-priced goods, hiring caregivers if needed, etc.

Program of All-Inclusive Care for the Elderly (PACE)

Seniors age 55 and older can cover their medical, social service and non-medical personal needs with one comprehensive plan and delivery system using the Program of All-Inclusive Care for the Elderly (PACE). PACE beneficiaries are required to need a Nursing Facility Level of Care, but they must live in the community and not in a nursing home. PACE can be used by people who have both Medicaid and Medicare (known as “dual eligible”), and it will coordinate the benefits and care from the two programs into one plan. Having Medicaid or Medicare is not a requirement for PACE, but seniors who don’t belong to either program will have to pay to be part of PACE. PACE also coordinates vision and dental care, and PACE day centers offer meals, exercise programs, social activities and routine healthcare.

In some states, PACE is known as Living Independence for the Elderly (LIFE). As of January 2025, 33 states and the District of Columbia offer PACE/LIFE programs.

Money Follows the Person (MFP)

Medicaid beneficiaries who are currently living in nursing homes but want to return to the community can receive assistance with that transition through Medicaid’s Money Follows the Person (MFP). This program will help cover moving expenses like security deposits, utility set-up fees, purchasing essential furniture and paying for movers. MFP may also cover long-term care benefits after the senior has returned to the community, such as adult day care, home modifications, meal delivery, Personal Emergency Response Systems and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting).

To be eligible for MFP, a senior must be a Medicaid beneficiary for at least a year and must have been living in the nursing home they want to transfer from for a minimum of 60 consecutive days. The Medicaid beneficiary must also require a Nursing Facility Level of Care to qualify for MFP, but they must also must be able to live in the community with the help of long-term care services and supports covered by Medicaid. And the senior must be moving into their own home, the home of a loved one or a small group home with a maximum of four unrelated residents to receive MFP benefits.

As of Jan. 1, 2025, 37 states and Washington, D.C. have operating MFP programs that are relevant to seniors.

How a Medicaid Planner Can Help with Nursing Home Alternatives

Finding an available nursing home alternative, understanding if it’s right for your situation and then applying to the program can be a complicated task. You need to know where to look, what to look for, what to avoid, what rules to follow and what finances to count. Our team of professionals at Eldercare Resource Planning can help with all of that.

They can find the Home and Community Based Services (HCBS) Waiver or Aged, Blind and Disabled (ABD) Medicaid program in your state that will be the best fit for you. They can determine if you’re financially and medically eligible for those programs, and what to do if you’re not. They can help you gather the financial documents you’ll need to submit with your application, and they will help you accurately complete and correctly submit that application.

Our team can tell you if your state has a Program of All-Inclusive Care for the Elderly (PACE). We also know if your state has a Money Follows the Person program, if you’re eligible, how to apply, what kind of benefits to expect and how long to expect them.

If you or your loved one doesn’t want to go to a nursing home or no longer wants to live there, we understand. What’s more, we can help you find the right nursing home alternative so you or your loved one can get the care you need, where you need it.