Montana Medicaid Personal Needs Allowance and Patient Liability

What Your Parent Gets to Keep Each Month

Once your parent qualifies for Medicaid nursing home coverage in Montana, nearly all of their monthly income goes directly to the facility. The small amount they keep is called the Personal Needs Allowance, and in Montana it's set at just $50 per month.

That $50 covers everything personal — haircuts, clothing, phone calls, magazines, snacks from the vending machine. It's not much, and it hasn't kept pace with inflation. But it's the statutory floor under Montana rules, and the facility cannot touch it.

If your parent receives only SSI benefits and has no other income, the personal needs allowance drops to $30 per month.

How Patient Liability Is Calculated

The rest of your parent's income — Social Security, pension, any other monthly payments — flows to the nursing home as their "patient liability." Montana calculates it using a straightforward formula:

Patient Liability = Gross Monthly Income − $50 PNA − Medicare/health insurance premiums − any spousal income allowance

So if your parent receives $2,400 per month in Social Security and pension, and pays $175 monthly for Medicare Part B and a supplemental plan, the math works out to:

$2,400 − $50 − $175 = $2,175 patient liability

The nursing home collects that $2,175 each month, and Medicaid pays the difference between patient liability and the facility's daily rate. Your parent keeps $50.

The Spousal Allowance Deduction

When one spouse enters a nursing home and the other remains at home, the at-home spouse may be entitled to a Monthly Maintenance Needs Allowance. For the period effective July 1, 2026 through June 30, 2027, Montana sets the minimum floor at $2,705 per month.

If the community spouse's own income falls below that floor, the difference can be redirected from the institutionalized spouse's income before patient liability is calculated. This deduction can substantially reduce what the nursing home receives.

For example, if the community spouse earns $1,200 per month and the floor is $2,705, then $1,505 of the institutionalized spouse's income shifts to the at-home spouse before the facility calculates its share.

The maximum spousal allowance can go up to $4,066.50 per month if the community spouse's housing costs exceed the excess shelter standard of $811.50.

What Counts as Income

DPHHS counts virtually all income sources when calculating patient liability:

• Social Security retirement or disability benefits
• Pension and annuity payments
• Interest and dividend income
• Rental income from property
• Veterans benefits (with some exceptions)

Montana applies two standard exclusions before the patient liability calculation: a $20 general unearned income exclusion and the state's $100 income exclusion, for a combined $120. These exclusions matter most for the medically needy spend-down pathway, but they also factor into determining how DPHHS counts income for eligibility purposes.

Protecting More Than $50

The $50 personal needs allowance is the legal minimum, and there's limited room to increase it. But understanding how the patient liability calculation works gives families some leverage:

• Maximize spousal income transfers if one spouse remains at home
• Ensure all deductible premiums are subtracted — Medicare Part B, Medigap, dental plans, and prescription drug plan premiums all reduce patient liability
• Keep documentation current — DPHHS reviews income annually, and any unreported change can trigger an overpayment notice

The Montana Medicaid Long-Term Care & Asset Protection Guide includes a step-by-step patient liability worksheet that walks through each deduction so nothing gets missed. Getting the calculation right can mean hundreds of dollars more flowing to a community spouse instead of the facility each month.

When Patient Liability Changes

Patient liability isn't fixed. It recalculates whenever your parent's income changes — a Social Security cost-of-living adjustment, a pension modification, or the loss of a secondary income source all trigger recalculation. The facility should adjust its billing accordingly, but families should track the numbers independently. If the nursing home is collecting more than the correctly calculated patient liability, you can request a review through your parent's DPHHS caseworker.

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