Residents of a nursing facility who are on Medicaid must generally turn over all of their monthly income to the nursing facility. However, there are allowable expenses which residents can deduct from their income prior to turning the balance over to the nursing facility each month. In many states, dental and vision insurance premiums are such an allowable deduction.

The following examples illustrate how the allowable deduction works:

Resident without dental / vision insurance:

Resident with dental / vision insurance:

While premiums are paid for insurance products, there is no change in the total cash outlay to the resident who chooses insurance.

In some states, the dental and/or vision insurance may to some degree duplicate coverage available through the state Medicaid plan, so one would want to compare the insurance coverage to the Medicaid plan’s coverage to determine the relative value of the insurance. In using the allowable deduction for the insurance premium, that amount is not available for other possible allowable deductions.