Medicaid does not cover memory care in North Carolina as a single, direct payment the way it covers a nursing home stay. What the state does offer is a set of linked programs that, used together, can substantially reduce what a family pays for dementia care, whether the person lives in a memory care unit of an adult care home, stays at home with support, or needs skilled nursing. Which programs apply depends on where the person lives and how much help they need.
What Medicaid Pays For Inside a Memory Care Facility
Most memory care in North Carolina is delivered inside adult care homes, which are residential facilities offering supervision, help with daily activities, and medication management. These are not nursing homes, and Medicaid treats them differently. The program reimburses adult care homes for personal care services and medical transportation, but it will not pay for room and board. Room and board is the largest piece of the bill, which is why Medicaid alone never covers the full cost.
The statewide average cost of memory care runs about $6,748 per month, roughly $81,000 a year. That is about $950 more per month than standard assisted living, reflecting secured environments, dementia-trained staff, and higher staffing ratios.
Personal Care Services
The main Medicaid benefit that reaches memory care residents is the Personal Care Services (PCS) program. PCS funds hands-on help with eating, dressing, bathing, toileting, and mobility for up to 130 hours per month. It can be delivered in a private home or inside a licensed adult care home, so a person in a memory care unit can receive PCS while the facility bills room and board separately.
To qualify, the applicant must hold a current NC Medicaid card and have a qualifying condition, disability, or memory impairment such as dementia. An in-person assessment measures how much help the person needs with the five daily tasks. The applicant must need at least some help with three of the five, or more intensive help with at least two.
As of January 2025, PCS reimbursement for people in congregate settings like adult care homes moved to a daily per diem rate. Assessments are handled by the state’s independent assessment entity, Acentra Health, through the NC LIFTSS system. PCS can often begin within a couple of weeks of approval, which makes it a useful bridge while a family pursues longer-term benefits.
State-County Special Assistance: Help With Room and Board
Because Medicaid will not pay for room and board in an adult care home, North Carolina fills that gap with the State-County Special Assistance (SA) program. SA is a cash supplement, not Medicaid itself, but the two are tied together: anyone who qualifies for SA is automatically eligible for Medicaid.
SA pays a set monthly amount toward room and board in an approved adult care home, family care home, or group home. The rate is higher for a licensed Special Care Unit, the secured memory care wing designed for people with Alzheimer’s or a related disorder. As of 2026, the SA rate for a Special Care Unit resident is $1,515 per month, compared with $1,182 for a standard adult care home. Each resident also receives a $46 monthly personal needs allowance.
Income limits are tight. For a standard adult care home, adjusted income must fall below $1,228 per month; for a Special Care Unit, below $1,561. The countable asset limit is $2,000. Applications go through the local county Department of Social Services.
One note on pending change: House Bill 485, introduced in 2025, proposed indexing those income caps to the federal poverty level and expanding eligibility, but its status is uncertain and the 2009 limits remain the rule to plan around. Confirm current thresholds with your county DSS.
Staying at Home: Two Paths
If the person with dementia can live safely at home with support, two programs can help.
Special Assistance In-Home
Special Assistance In-Home (SA/IH) provides a cash supplement for someone who meets the criteria for residential care but prefers to stay in their own home or apartment. Eligibility tracks the facility-based SA program, with a $2,000 resource limit and a physician-signed assessment confirming the need for a licensed residential facility level of care. For dementia specifically, a documented diagnosis of dementia or major neurocognitive disorder on the assessment form puts the person at the SA Enhanced rate, which is higher than the Basic rate. SA/IH beneficiaries are automatically Medicaid-eligible and can also receive PCS. County adult services case managers run the initial assessment and build a care plan.
The CAP/DA Waiver
The Community Alternatives Program for Disabled Adults (CAP/DA) is the most comprehensive Medicaid-funded option for staying out of a facility. It is a waiver program for people who would otherwise need nursing home care, and it covers 18 services: adult day health with nursing supervision, in-home aide services, respite care, home modifications, personal emergency response systems, meal preparation and delivery, skilled nursing, assistive technology, and non-medical transportation among them. Beneficiaries can even serve as their own employer of record, hiring and supervising their personal care assistants.
The waiver explicitly recognizes Alzheimer’s and related dementias. It reserves 434 slots for individuals with a documented dementia diagnosis. To reach those priority slots, the physician’s diagnosis must be clearly noted on the application so the case is flagged. If the reserved slots are full, applicants join a waitlist but may be prioritized over general applicants when openings occur.
CAP/DA is authorized to serve 11,648 recipients statewide. National data suggests comparable waiver programs averaged about a 15-month wait in 2025, though real wait times vary. Apply through the local CAP/DA case management agency in the county of residence, or call NC LIFTSS at 833-522-5429. Because processing takes time, apply for PCS at the same time so basic personal care is in place while the waiver works through the system.
Financial eligibility for CAP/DA mirrors other Medicaid long-term care programs. A single applicant’s countable assets cannot exceed $2,000, and monthly income must fall below $1,330. The home is generally exempt if the applicant or a qualifying family member lives there and equity is $752,000 or less. Spousal impoverishment protections let a community spouse keep up to $162,660 in assets and receive a monthly income allowance of up to $4,066.50.
When Medicaid Covers Everything: Nursing Home Care
When dementia progresses to the point of needing skilled nursing care, Medicaid covers the full cost of a nursing home, including room, board, and medical services. This is the one pathway where Medicaid functions as a true safety net for residential dementia care, paying the whole bill rather than layering services on top of private-pay room and board.
Eligibility requires both a functional assessment documenting the need for nursing facility-level care and financial qualification. Income can be as high as the Medicaid reimbursement rate for the specific facility, which can reach $9,000 per month in some areas. The asset limit remains $2,000 for a single applicant. Once enrolled, the beneficiary contributes most of their income toward care but keeps $70 per month for personal needs; a spouse at home retains their own income plus possible additional allowances.
Not every nursing home accepts Medicaid, and those that do may limit Medicaid-funded beds. Confirm a facility’s Medicaid participation and bed availability before admission. Some nursing homes include secured dementia units.
PACE: An All-Inclusive Option
The Program of All-Inclusive Care for the Elderly (PACE) bundles medical care, personal care, adult day health, transportation, meals, and social activities into one program for people aged 55 and older who need a nursing facility level of care but can live safely in the community. Nationally, nearly half of PACE enrollees have a dementia diagnosis, which makes it a practical option for families managing early-to-moderate cognitive decline.
North Carolina has 11 PACE organizations operating at 14 locations, serving more than 2,000 participants. Each center covers a defined geographic area, so eligibility depends on where the person lives. Participants dually eligible for Medicare and Medicaid typically pay nothing out of pocket. The tradeoff: all care must come through the PACE interdisciplinary team, which includes a primary care physician, nurses, therapists, social workers, and personal care attendants.
How to Apply
Applications for Medicaid long-term care start at the local county Department of Social Services. You can apply online through the ePASS portal, in person, by phone, or by mail. Anyone seeking long-term care, in-home services, or Medicaid for the Aged, Blind, or Disabled must submit a supplemental financial disclosure form (Appendix D) with the standard application.
Expect to document identity and citizenship, Social Security information, and full financial records: bank accounts, investments, life insurance, annuities, and all income sources. For long-term care, the state reviews 60 months of financial history for assets transferred below fair market value. Transfers inside that look-back window can trigger a penalty period of Medicaid ineligibility, calculated by dividing the value of transferred assets by the state’s average nursing home cost.
Standard applications take up to 45 days to process; disability-related applications may take up to 90 days. The NC Medicaid Contact Center is at 888-245-0179, and free application help is available through Medicaid Ambassadors and NC Navigators at 855-733-3711.
Planning Around the Asset Limit
With Medicaid’s asset limit at $2,000 for a single applicant, most families have to plan before applying. A spend-down reduces countable assets to that threshold through permissible expenses: paying off debts, prepaying funeral costs, making home repairs, or simply paying for care out of pocket.
Common planning tools include irrevocable trusts, Medicaid-compliant annuities, and strategic use of exempt assets like the primary home and one vehicle. A frequent mistake is adding a child’s name to a bank account, which can make the full balance countable or trigger a transfer penalty if the child withdraws funds. Because of the 60-month look-back, planning works best when it starts at least five years before care is needed.
Spousal protections keep a community spouse from being impoverished by the applicant’s care costs. In 2026, the community spouse may retain up to $162,660 in assets (minimum $32,532 if total assets are lower) and receive a monthly maintenance income allowance of up to $4,066.50. The minimum monthly maintenance needs allowance is $2,644, with adjustments possible if housing and utility costs exceed the $794 shelter standard.
After a Medicaid beneficiary dies, the state’s Medicaid Estate Recovery Program can seek reimbursement from the estate for long-term care costs. Recovery is limited to probate assets and is automatically deferred while a surviving spouse is alive or if the beneficiary is survived by a child under 21 or a child who is blind or disabled. The state waives recovery entirely when total estate assets are under $50,000 or total Medicaid benefits paid were under $10,000. Heirs whose household income is below 200% of the federal poverty level can apply for an undue hardship waiver within 60 days of receiving notice of a Medicaid claim.