When an Iowa nursing home resident becomes Medicaid-eligible, their health care will be fully covered by the State of Iowa. However, most of their monthly income, including Social Security and pensions, must be turned over to the long-term care facility. This payment to the nursing facility can be thought of as a co-pay that the resident contributes to the cost of their long-term care. When Social Security payments are raised yearly for the cost-of-living adjustment, the co-pay amount increases accordingly.
Nursing home residents are permitted to keep a small portion of their income, called a personal needs allowance (PNA). Iowa’s personal needs allowance is $55.00 per month, recently raised from the previous $50.00. This monthly personal needs allowance can be used for things like snacks, toiletries, haircuts, and any other personal expenses a Medicaid beneficiary might have.
Federal regulations dictate that the PNA be at least $30.00, however, each state can set their own amount. Alaska’s PNA is the highest, at $200.00, and Alabama’s is the lowest, at the federal minimum of $30.00 per month. States surrounding Iowa vary in their PNA amounts: Missouri is $50.00, Indiana is $52.00, Illinois is $60.00, and Minnesota is $128.00. This federal regulation dates back to 1987. Many states have not raised the PNA amount to account for inflation. In Iowa, for example, the PNA amount had been stagnant since 2001 until it was raised in 2025.
It should be noted that these regulations only apply to Medicaid services administered in long-term care facilities. Other Iowa Medicaid programs run by the Department of Health and Human Services (HHS) cover other medical assistance programs, supportive living facilities, and residential care in an assisted living facility. Additionally, separate rules apply to home and community-based services (HCBS) for assistance with activities of daily living in the home through Medicaid waivers. Those rules are the subject of other informational entries on this website.