Medicaid Waiver, Explained · Part 3 of 8

Maryland’s Community Options Waiver is not one application. It is three separate gates — and clearing two of them is the same as clearing none.

https://www.youtube.com/watch?v=MPcV1peG_k0

Prefer to watch? The same material, as a conversation — about twelve minutes.

In Part 2 we went through the three-day rule, and how three nights in a hospital bed can add up to zero inpatient days.

This part is about what comes after: the program that actually pays for assisted living in Maryland, and the three separate tests standing in front of it.

Families arrive at my door having heard a sentence that is technically true and practically misleading: “Maryland has a program that pays for assisted living.” It does. It is called the Community Options Waiver. But it checks three different things, and if she fails one of them, the application is denied. There is no partial credit.

What the Waiver is actually for

Medicaid pays for nursing home care. It does not, on its own, pay for assisted living.

The Waiver exists to close that gap. It lets someone who qualifies for nursing home care receive that care in an assisted living home instead — a smaller place, closer to family, less institutional.

Which produces the first thing that confuses everyone.

Gate one — medical

The state performs a nursing facility level of care determination. In plain terms: is she sick enough, or impaired enough, that a nursing home would be appropriate?

Read that again, because it is genuinely strange. She has to qualify for the nursing home in order to be allowed to avoid it. That is how the program is built.

The assessment looks at the ordinary things:

• Can she bathe and dress herself?
• Can she manage her own medications?
• Can she move safely around a home?
• What is her cognition like — memory, judgment, orientation?

Gate two — technical

The second gate is the paperwork one, and most families clear it without noticing:

• She is 18 or older.
• She lives in the community, or is moving back into it.
• She is not enrolled in another waiver program or PACE at the same time.
• The cost of caring for her in the community is not more than the cost of caring for her in a facility.

The one that trips people is the third. If she is already enrolled in another Medicaid waiver, or in a PACE program, that has to be sorted out before this application goes anywhere. It is worth checking rather than assuming.

Gate three — financial

This is the gate where the room goes quiet. Two numbers.

Most families hear the income number and feel some relief. It is higher than they expected.

Then they hear the asset number. Two thousand dollars, total, in countable assets. Someone who worked for forty years and saved carefully hears that and does not know what to say. I have watched it happen at my own kitchen table more times than I can count.

And the very next sentence, almost every time, is the same one.

“So we’ll just give it to the kids.”

That instinct is the single most expensive one in this entire subject.

Medicaid looks back 60 months — five years — from the date of the application. Anything she gave away, or sold for less than it was worth, inside that window gets counted. The state divides that amount by a penalty figure it sets, and the result is how long she is ineligible.

Read what that actually means. The money is gone. She still cannot get help. And someone has to pay for her care during the penalty period — which is usually the same family that moved the money in the first place.

There are transfers that do not count against her. They are real, and they are narrow:

• To a spouse.
• To a disabled child.
• The home to a child who lived there and provided care that kept her out of a facility for at least two years.
• The home to a sibling with an equity interest who lived there for at least a year.

Notice what those have in common: they describe people who were already doing the caregiving. The exceptions exist for them, and they get documented.

The house itself is treated separately. If she lives there, or intends to return, home equity is excluded up to $752,000. Owning a home does not automatically disqualify her.

Past this point you want an elder law attorney, not a blog post and not a facility director. I say that as a facility director.

Clear all three — and what is left is small

Now the part families do not hear often enough.

When she clears all three gates, the Waiver takes the largest cost off the table. The care itself — the staffing, the help with bathing and dressing and medications, the daily part that makes assisted living expensive — is covered.

What remains is room and board. The roof and the meals.

And that amount is capped. Maryland regulation COMAR 10.09.54.03 D states that room and board may not exceed $420 per month. For a family that has been paying privately for assisted living, that number is difficult to believe the first time they see it.

Where the $420 gets misquoted

Here is the part that is most often repeated wrong, including by people trying to be helpful: “so she just pays $420” is not accurate.

The order is this:

1. A personal needs allowance comes out of her income first — $106 a month as of July 1, 2025. That is hers. Hair appointments, shampoo, a birthday card for a grandchild.
2. Then room and board, up to the $420 cap.
3. Then, where they apply, a spousal or dependent allowance and incurred medical expenses.
4. Whatever income is left after all of that goes toward the cost of her care.

Two things follow from this, and both matter.

The total does not go up. Whatever she contributes, the state’s payment goes down by the same amount. And she is never asked to pay more than her income.

So a woman with a generous pension will pay more than $420 a month. Not because anyone is charging her extra — because that is how the calculation is written.

Why I go through this before move-in day

A family that hears these numbers for the first time on the day their mother moves in does not trust the home again. That reaction is correct, and I would have it too.

A family that walks in already knowing the numbers moves in calmly. So I do this arithmetic with them at the beginning, on paper, before anything is signed.

Last year a family arrived certain that their mother’s Waiver had been approved. I went to the rehabilitation hospital where she was staying to begin the move, and that is when we found out: what had been approved was Medicare. The Waiver application had never been filed at all. She had to stay in rehab longer. Nobody had lied to anyone. The word “approved” had simply landed on the hope that was already there.

Three things to write down today

You do not need a lawyer to start. You need one sheet of paper.

1. Her monthly income.
2. Her assets.
3. Anything she has given away or transferred in the last five years.

Take that sheet to her case manager or hospital social worker, or to Maryland Access Point. They can tell you which gate you are standing at.

In Part 4 we go through what the Waiver actually pays for, service by service — and how that $420 appears on a real bill.

Aberdeen House III is a licensed assisted living home in Rockville, Maryland. This series explains how Maryland pays for assisted living. It is general information, not legal or medical advice — confirm your own situation with your case manager, Maryland Access Point, OLTSS, or an elder law attorney. Figures are 2026 and change annually.

Sources: Maryland Department of Health, Community Options Waiver — nursing facility level of care determination, technical eligibility conditions, and financial eligibility at 300% of the SSI payment standard ($2,982 per month in 2026) with countable assets of $2,000–$2,500 by category · Medicaid 60-month look-back period, transfer penalty calculation, and exempt transfers (spouse, disabled child, caregiver child residing two years, sibling with equity interest) · Home equity exclusion limit of $752,000 · COMAR 10.09.54.03 D — room and board may not exceed $420 per month, confirmed directly with Maryland Department of Health on September 3, 2026 · Personal needs allowance of $106 per month, effective July 1, 2025