Maryland Medicaid Personal Needs Allowance and Patient Liability Explained

What the Personal Needs Allowance Is and Why It Matters

Once your parent is approved for nursing home Medicaid in Maryland, nearly all of their monthly income goes directly to the nursing facility. Social Security, pensions, annuity payments — the facility gets almost everything. The one exception is the personal needs allowance (PNA): $106 per month.

That $106 is what your parent keeps for personal expenses. Toiletries, haircuts, phone service, snacks from the vending machine, clothing, magazines — anything the nursing home doesn't provide as part of standard care. The facility cannot claim this money. It belongs to your parent, period.

For most families, $106 per month feels impossibly small. And it is. But understanding how the broader patient liability calculation works — and where the deductions come in — is what determines whether your parent contributes $2,000 or $3,500 per month to the facility, with Medicaid covering the rest.

How Patient Liability Is Calculated

The patient liability (sometimes called "share of cost") is the amount your parent pays to the nursing home each month. Medicaid covers everything above that amount. The formula:

Gross monthly income − $106 PNA − health insurance premiums − spousal income allowance (if applicable) − dependent allowance (if applicable) = patient liability

Here's a worked example:

In this scenario, the nursing home receives $3,134 from the parent each month. At an average rate of $12,927, Medicaid covers the remaining $9,793.

The Spousal Income Allowance: A Major Deduction

If your parent has a community spouse (the spouse who remains at home), the patient liability calculation includes a potentially substantial deduction for spousal support.

The community spouse is entitled to maintain a minimum monthly income — the Minimum Monthly Maintenance Needs Allowance (MMMNA) — currently $2,705 per month (effective July 1, 2026). If the community spouse's own independent income (Social Security, pension, investments) falls below $2,705, a portion of the applicant spouse's income is redirected to make up the difference.

Example: The community spouse receives $1,200 per month from Social Security. The MMMNA is $2,705. The shortfall is $1,505. That $1,505 is diverted from the nursing home spouse's income to the community spouse before calculating patient liability.

If the community spouse's shelter costs (rent, mortgage, property taxes, homeowner's insurance, utilities) exceed the excess shelter standard of $811.50 per month, the MMMNA can be increased dollar-for-dollar up to a maximum of $4,066.50 per month. For community spouses with high housing costs — a mortgage payment of $1,800, for instance — this shelter-cost adjustment can divert a significant portion of the applicant's income away from the facility and toward the spouse's support.

Bed Hold Rules: What Happens During Hospital Stays

When your parent leaves the nursing home temporarily — for a hospital admission, a medical procedure, or therapeutic leave — the question becomes whether the facility holds the bed. Maryland Medicaid covers bed hold days for short-term absences under specific circumstances:

• Hospital leave: Medicaid continues paying the facility's bed hold rate (a reduced daily rate) for a limited number of days during acute hospital stays. The exact number of covered days should be confirmed with the facility and reflected in the admission agreement.
• Therapeutic leave: For approved social leaves (visiting family for holidays, attending events), Medicaid may cover a limited number of bed hold days per year. Not every facility participates, so confirm the policy in writing.

If the facility doesn't hold the bed, your parent may lose their room and be placed in whatever bed is available upon return — or potentially lose their placement entirely. Before any planned absence, get the bed hold commitment in writing from the facility's administrator.

Protecting the Personal Needs Allowance

The $106 personal needs allowance should be tracked in a dedicated account. Many nursing homes offer to manage residents' personal funds through a "patient trust fund" or in-house account. If the facility manages the funds with written authorization:

• For a Medicaid resident, funds above $50 must be kept in a separate interest-bearing account; up to $50 may be kept in a non-interest-bearing account, an interest-bearing account, or petty cash
• They must provide quarterly statements to the resident or representative
• They cannot use the funds for any purpose the resident didn't authorize
• They must return the funds within 30 days of discharge or death, with a final accounting

If you prefer more control, you can manage the personal needs allowance yourself through a dedicated bank account. This avoids potential disputes with the facility and gives you a clear paper trail for the annual Medicaid redetermination.

The Annual Redetermination

Each year, the local DSS mails a redetermination packet (Form DHS/FIA 9709R). The family must submit updated bank statements, verify that countable assets remain under $2,500, and confirm current income. If your parent's income changed — a Social Security COLA increase, a pension adjustment, a new benefit — the patient liability will be recalculated.

Missing the redetermination deadline can result in termination of Medicaid coverage. The completed packet must typically be returned within 30 days of receipt. If coverage is terminated for a missed deadline, the family has a 90-day grace period to submit the missing information and restore benefits retroactively.

For detailed worksheets that calculate your parent's patient liability, spousal income allowance, and shelter cost adjustments using 2026 Maryland thresholds, see the Maryland Medicaid Long-Term Care & Asset Protection Guide.

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