Medicaid Memory Care in Minnesota

How Medicaid Pays for Memory Care in Minnesota

Standard Medical Assistance (Minnesota's Medicaid) does not pay for room and board in an assisted living facility. That surprises most families, because it does pay for a nursing home stay. The mechanism that makes Medicaid-funded memory care possible is the Elderly Waiver, which pays for "Customized Living Services" — the care component — while the resident's own income covers the housing cost.

This distinction matters because it determines how much of the bill is actually covered and how much your parent still pays out of pocket.

The Elderly Waiver and Customized Living Services

The Elderly Waiver is a Medicaid home and community-based services waiver that funds care in assisted living facilities as an alternative to nursing home placement. When a person with dementia qualifies, the waiver pays the facility's Customized Living Services rate — which covers personal care assistance, medication management, health monitoring, and dementia-specific programming.

The resident's room and board — housing, meals, utilities — comes out of their own income. In 2026, Elderly Waiver recipients living in assisted living retain a maintenance needs allowance of $1,353 per month for personal expenses. Income above that amount goes toward the cost of care as a "waiver obligation" (essentially a participant contribution).

2026 Financial Eligibility

To qualify for Medical Assistance and the Elderly Waiver, your parent must meet both clinical and financial criteria.

Clinical requirement: A MnCHOICES assessment must determine that your parent meets the Nursing Facility Level of Care standard. The assessment evaluates functional capacity across Activities of Daily Living and the level of supervision required; a dementia diagnosis alone does not determine NFLOC.

Financial limits for 2026:

• Individual asset limit: $3,000 in countable assets. The primary home is exempt if occupied by a spouse or child under 21, or if its equity remains below $752,000; one vehicle, personal belongings, and an irrevocable prepaid burial contract are also exempt.
• Income limit: The Special Income Standard is $2,982 per month. If income exceeds this, your parent can still qualify through a medically needy spenddown
• Community Spouse Resource Allowance: If only one spouse is applying, the non-applicant spouse can retain up to $162,660 in countable assets
• 60-month lookback: The state reviews all financial transactions from the prior 60 months for asset transfers made below fair market value

The Application Process

1. Request a MnCHOICES assessment through your county's social services department or the Senior LinkAge Line at 1-800-333-2433. Counties are directed to complete assessments within 20 calendar days, though real-world backlogs can stretch this to several months.

2. Gather financial documentation for the full 60-month lookback period: bank statements, investment accounts, property records, insurance policies, and records of any gifts or transfers.

3. Submit the Medical Assistance for Long-Term Care application through the county human services office or MNsure.

4. Select a facility that accepts the Elderly Waiver. Not all memory care facilities participate. Ask specifically whether the facility accepts Customized Living Services payments under the Elderly Waiver, and whether they require a period of private-pay residency first.

The Gap Between Private Pay and Waiver Approval

The most dangerous financial period is between when your parent enters a memory care facility and when Elderly Waiver coverage begins. With memory care averaging $7,416 per month in Minnesota, a three-month assessment and approval delay can burn through $22,000 or more in private funds.

As of 2026, Minnesota law prohibits facilities from terminating a resident's contract solely because they transition from private pay to Elderly Waiver funding. This protection means your parent can't be discharged for running out of money — but it only applies to licensed facilities, and the transition still requires the waiver to be approved and the facility to be enrolled as a Customized Living Services provider.

If your parent's liquid assets are approaching the $3,000 threshold, initiate the MnCHOICES request immediately. You can also explore the Alternative Care program, which can provide temporary coverage for up to 60 days while the Medical Assistance application is pending.

What the Waiver Doesn't Cover

Even with full Elderly Waiver coverage, families should expect ongoing costs. The waiver does not cover:

• Room and board (paid from the resident's income)
• Private room upgrades
• Non-covered personal supplies
• Services above the authorized care plan

The Minnesota Dementia & Memory Care Guide includes a monthly cost tracker and financial inventory worksheet that helps you map out these ongoing expenses alongside the waiver coverage, so you can project how long your parent's resources need to last and what the family's financial exposure actually looks like.

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