Alternatives to Nursing Homes
Most older adults want to stay at home as long as possible, and for many people a nursing home is not the only option, even when they need a lot of help. Long-Term Care Medicaid pays for a growing range of care at home and in the community. This guide walks through the main alternatives to a nursing home, how Medicaid can help pay for each, and how families can decide what fits.
Figures change periodically. Double-check current amounts before relying on them.
The short version
- Medicaid pays for home and community-based services (HCBS) in every state, including personal care at home, adult day care, assisted living services, respite and more.
- Many of these services are provided through waivers, which can have enrollment limits and waiting lists. Nursing home care, by contrast, has no waiting list for people who qualify.
- People usually must meet the same nursing-home level of care to get waiver services as they would for a nursing home.
- Medicaid does not pay room and board outside a nursing home, so a person living at home or in assisted living needs enough income to cover rent, food and utilities.
- The right choice depends on the person’s needs, safety, family support, income and the programs available in their state.
Why alternatives matter
Since the Supreme Court’s 1999 decision in Olmstead v. L.C., which held that unnecessary institutionalization of people with disabilities can be discrimination under the Americans with Disabilities Act, states have expanded home and community-based care. Federal programs such as Money Follows the Person and options such as Community First Choice encourage states to “rebalance” long-term care toward the community. Today, Medicaid spends more on home and community-based services than on institutional care nationally, though the mix varies by state.
The main alternatives
1. Care at home
Medicaid can pay for help at home, such as:
- personal care aides for bathing, dressing and toileting;
- homemaker services, such as cleaning, laundry and meals;
- home health aides and nursing visits;
- home-delivered meals;
- medical alert systems;
- home modifications and equipment.
Many states let the person direct their own care, hiring and supervising caregivers, sometimes including family members. See In-home care through Medicaid, Consumer-directed care and Getting paid as a family caregiver.
2. Adult day care
Adult day programs provide supervision, activities, meals and sometimes health services during the day, letting a person live at home while family caregivers work or rest. See Adult day care.
3. Assisted living
Assisted living facilities offer a private or shared apartment, meals, and help with daily activities and medications, in a more home-like setting than a nursing home. Most states pay for care services in assisted living through Medicaid, but not room and board. See Will Medicaid pay for assisted living?.
4. Adult foster care and small group homes
Some states pay for care in small residential settings, such as adult foster homes or adult family homes, where a few residents live in a private home with a caregiver. These can be a good fit for people who need supervision but not skilled nursing.
5. PACE
The Program of All-Inclusive Care for the Elderly provides medical and long-term care services through one organization, mostly at a PACE center, for people 55 and older who qualify for nursing home care but can live safely in the community. See PACE programs.
6. Living with family
Many older adults move in with an adult child. Medicaid programs may pay for personal care, respite and adult day care, and in some states pay the family caregiver through structured family caregiving or consumer-directed programs.
7. Independent living and senior housing
Independent living communities and senior apartments provide housing and social activities, but generally not care. A person can often add Medicaid home care services there.
Comparing the options
| Option | Who it tends to fit | Medicaid pays for | Who pays room and board |
|---|---|---|---|
| Home care | People with a safe home and some support | Care services | The person (own home) |
| Adult day care | People living at home whose caregivers need daytime help | Day program | Not applicable |
| Assisted living | People needing daily help but not 24-hour nursing | Care services (in most states) | The person, sometimes with a state supplement |
| Adult foster care | People needing supervision in a family-like setting | Care services (in some states) | The person |
| PACE | 55+, nursing home level of care, in a PACE area | All covered services | The person, if living at home |
| Nursing home | People needing 24-hour care and supervision | Everything, including room and board | Medicaid (after the person’s share of cost) |
Eligibility for community programs
Financial eligibility for most Medicaid home and community programs is similar to nursing home Medicaid, with an asset limit (often $2,000 for one person) and an income rule. Some states apply the look-back to waiver programs in the same way as nursing homes. Spousal protections apply to married applicants in waiver programs too. Because a person living at home needs more income for living expenses, states often let waiver participants keep more income than nursing home residents.
Most waivers also require that the person meet the nursing-home level of care, which means the community service is replacing nursing home care. A few programs serve people with lower needs.
Waiting lists
Unlike nursing home care, many waiver programs have a limited number of slots. When slots are full, people go on a waiting list, which can last months or years in some states. Some states give priority to people leaving nursing homes or hospitals. See Waiver waitlists by state.
Ways families cope with waiting lists:
- Apply as early as possible.
- Ask about state plan services, such as personal care, that have no waiting list.
- Ask about Money Follows the Person or priority categories.
- Use community resources, such as Older Americans Act programs, while waiting.
Is home care always cheaper?
For a few hours a day, home care usually costs less than a nursing home. For round-the-clock care, it can cost more. Medicaid programs often have cost limits on how much can be spent on a person at home, sometimes tied to the cost of nursing home care. A person who needs constant supervision may be approved for fewer hours than they need, with family filling the gap.
Safety and quality of life
The decision is not only about money. Families should consider:
- Can the person be safe at home, especially at night?
- Is there a family member or friend available to fill gaps?
- Would the person feel isolated at home?
- Is the home accessible, or could it be made accessible?
- Does the person have dementia that could lead to wandering?
Sometimes a nursing home is the safest choice, and that is not a failure.
A simple example
Mae, 80, has heart failure and needs help with bathing, dressing and meals. Her daughter works full time. Mae qualifies for Long-Term Care Medicaid in her state, which offers a waiver. After a short wait, the waiver provides a personal care aide for 25 hours a week, adult day care three days a week, a medical alert system and a shower chair and grab bars. Mae stays in her apartment and pays her rent and food from her Social Security. When her needs increase two years later, she moves to an assisted living facility that accepts the waiver.
Getting help
The local Area Agency on Aging or the state’s aging and disability resource center can explain community programs. A Certified Medicaid Planner can help match needs with programs, handle the financial eligibility rules and prepare the application.
Frequently asked questions
Does Medicaid pay for a live-in caregiver? Some programs pay for many hours of care, and some pay family members who live with the person. Medicaid does not pay for room and board for a caregiver, though some waivers cover a portion of a live-in caregiver’s added room and board costs.
Can someone leave a nursing home for home care? Yes. Money Follows the Person and similar programs help people move back to the community.
Is there a look-back for home care? In most states, yes, for waiver programs. Some states do not apply it to certain community programs.
Key terms
- HCBS: home and community-based services, the general name for Long-Term Care Medicaid outside institutions.
- Waiver: a federal approval that lets a state offer HCBS to a target group, often with an enrollment cap.
- Rebalancing: shifting long-term care spending from institutions toward community services.
Families can also combine options over time, for example starting with adult day care and home care, then moving to assisted living when needs grow.
Whatever the choice, revisit it as needs change; a setting that works today may not work in two years.
A short trial, such as a respite stay in assisted living, can help a family see what works.
Related guides
- In-home care through Medicaid
- Will Medicaid pay for assisted living?
- HCBS waivers
- PACE programs
- Money Follows the Person
Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.