Understanding Medicaid’s Patient Pay Responsibility (Medicaid Co-Pay)

For many families, the cost of long-term nursing home care can be overwhelming. Without a plan, an individual in need of care could lose nearly everything they’ve worked a lifetime to build—leaving little to pass on to the next generation. Medicaid not only helps cover the cost of nursing home care but also provides important protections for spouses, ensuring that when one spouse qualifies for Medicaid, the other is not left financially destitute. Ultimately, Medicaid serves as a vital safety net for the middle class, offering financial relief for those who meet the program’s income and asset requirements.

When Medicaid Benefits Begin

Once an applicant becomes eligible for Medicaid, the program begins to help cover the cost of nursing home care. However, Medicaid does not typically pay the entire bill. Instead, the Medicaid recipient contributes their income—after certain allowable deductions—toward their cost of care. This amount is referred to as the patient pay responsibility or Medicaid co-pay.

How the Patient Pay Responsibility Is Calculated

The Department of Human Services (DHS) determines the patient pay responsibility as part of its Medicaid eligibility decision. The calculation starts with the recipient’s gross monthly income, from which several deductions may apply, such as:

• Medicare Part B premium – The standard premium for Medicare coverage.

• Other health insurance premiums – Such as supplemental or Medicare Advantage plan premiums.

• Home Maintenance Deduction – A temporary allowance for recipients who intend to return home within a short period of time. Learn more about the Home Maintenance Deduction.

• Spousal Allowance Deduction – An income allowance payable to a spouse still living at home, helping to prevent spousal impoverishment.

• Guardianship Fees – A deduction permitted when a guardian is appointed and receives court-approved compensation.

After these deductions are applied, the remaining income represents the patient pay responsibility—the portion of the nursing home bill that the Medicaid recipient must contribute each month. Medicaid then pays the difference between the recipient’s patient pay responsibility and the facility’s approved cost of care.

Ongoing Eligibility and Updated Determinations

The patient pay responsibility is not a one-time calculation. Each year, the Department of Human Services (DHS) reviews eligibility and issues updated determinations—most commonly at the beginning of the year when Social Security announces its cost-of-living adjustment (COLA). DHS is notified by the Social Security Administration when a recipient’s benefits are adjusted to reflect the COLA increase.

In addition to these annual updates, Medicaid recipients are required to complete a yearly renewal to maintain their benefits. Each recipient has a different renewal month, and the County Assistance Office (CAO) will notify recipients when their renewal is due. If there are any changes in income, assets, or other financial circumstances at the time of renewal, a new eligibility determination will be issued with an adjusted patient pay responsibility.

For recipients whose eligibility includes a spousal allowance deduction, updated determinations are typically issued three times per year—in January, July, and October—to reflect changes in the Medicaid financial standards.

Supporting Families Through the Process

Understanding how patient pay responsibility works is an important part of navigating the Medicaid system. At Crane Law, PC, we guide families through every stage of the process—from initial eligibility planning to ensuring compliance with ongoing determinations. Our goal is to help protect what matters most while securing the care a loved one needs.

If you or someone you care about is facing the high cost of nursing home care, contact our office to learn how Medicaid planning can provide both financial relief and peace of mind.