Assisted living is a type of residential long-term care for seniors who wish to continue living as independently as possible but require assistance with tasks such as household chores, medication management, meal preparation, and some activities of daily living (ADLs), such as bathing, dressing, or transferring. Individuals needing extensive help with these tasks and/or skilled medical care may need to find nursing home care instead.
While many assisted living facilities use different pricing models (e.g., a la carte or all-inclusive) to charge residents for services and amenities, the Genworth Cost of Care Survey found that the national median cost of a private one-bedroom unit in an assisted living community was $4,500 per month in 2021. Seniors who require daily assistance with nonmedical custodial care tasks (and their families) may have a very difficult time affording these services.
Most states do offer some degree of financial assistance for assisted living through Medicaid programs. However, it’s important to note that Medicaid does not cover the cost of basic room and board the way it does for residents of nursing homes.
What Medicaid covers in assisted living
The exact services that Medicaid covers within assisted living vary by state and the specific program a senior applies for. All states offer assistance paying for some degree of personal care services (ADLs), but the ways in which those services are administered differ widely. For example, some state Medicaid programs provide eligible seniors with personal care assistance but not in an assisted living residence.
The fundamental services that most Medicaid programs will pay for in an assisted living facility include:
- Personal care services
- Homemaker services (e.g., meal preparation, laundry, light housekeeping)
- Case management
- Transportation
- Personal emergency response systems
If your loved one’s state Medicaid program does not provide financial assistance with residential assisted living, there may be Medicaid waiver programs that offer comparable personal care options like in-home care and adult day care. These waivers enable seniors who are at risk of entering a nursing home to continue living in their own homes and communities. Unfortunately, many of these waiver programs have enrollment caps and waiting lists that can make it difficult for seniors to get the assistance they need in a timely manner.
Does Medicaid cover assisted living for dementia?
Medicaid can help seniors with dementia pay for assisted living, but a diagnosis doesn’t mean one is automatically eligible for assistance. The state functional assessments that are used to qualify people for Medicaid don’t always factor in cognitive impairments from dementia. Even if they do, some assessment tools place more emphasis on physical impairments. For instance, an assessment might not account for the verbal cues and monitoring your loved one needs to complete tasks around the house.
Applying for Medicaid to pay for assisted living
To be eligible for Medicaid-covered assisted living, a senior must meet strict financial and functional criteria, which vary from state to state. The income and asset limits can depend on factors like the kind of care required, a senior’s medical diagnosis, where they live, and their marital status. A doctor must also certify that a senior’s need for care in an assisted living facility is “medically necessary.”
Most seniors must carefully spend down their countable assets and income to qualify. Essentially, they pay out of pocket for the care they need until they meet their state’s financial eligibility requirements. Ways to pay for assisted living typically include savings, Social Security benefits, pension payments, and retirement funds.
The Centers for Medicare and Medicaid Services (CMS) reviews applicants’ financial history to prevent seniors from giving away assets and income to family or friends in order to qualify. This is referred to as the Medicaid look-back period. If a senior gave away assets or money for less than fair market value in the five years prior to applying, they’ll incur a penalty period of Medicaid ineligibility.
Medicaid planning is very complex and mistakes can be costly. Therefore, it’s wise to work with an elder law attorney who can help your loved one apply for Medicaid.
Read: Understanding the Medicaid Look-Back Period and Penalty Period
Finding assisted living that accepts Medicaid
The best way to find an assisted living facility that accepts Medicaid is to contact the nearest Area Agency on Aging. Finding one on your own can be difficult since there are typically few Medicaid-certified assisted living facilities due to low reimbursement rates. Just under half of all assisted living communities are Medicaid-certified, according to the American Health Care Association. Even if a facility does accept this form of payment, they may have a limited number of beds available for Medicaid patients.
Keep in mind that assisted living may go by many different names, including adult foster care, board and care homes, residential care, group homes, personal care homes, and memory care facilities. Understanding how your state refers to this type of care will make it much easier to navigate eligibility requirements, file an application, and find a care facility.
Additionally, a Senior Living Advisor with A Place for Mom, AgingCare’s senior living referral service counterpart, could be a helpful resource to go over options for assisted living in your area.
Paying for room and board in assisted living
Since Medicaid only covers seniors with limited financial resources, it makes sense that beneficiaries often have trouble paying the remaining costs of room and board in an assisted living facility. However, some states do take steps to help Medicaid residents make ends meet.
For example, certain states limit the amount that assisted living communities can charge for room and board. This reduces the cost Medicaid beneficiaries pay to equal the amount of the federal Supplemental Security Income (SSI) benefit. In 2022, the maximum monthly SSI payment is $841 for an individual.
To make assisted living more accessible in areas with high housing costs, many states provide an optional state supplement in addition to federal SSI payments. States can pay different supplements depending on a senior’s living arrangement, and some have pay rates specifically for assisted living.
Another option is to seek out private programs and charities for financial assistance. Lastly, veterans and surviving spouses of veterans may also qualify for a VA pension to help cover long-term care costs.
Comparing Medicaid vs. Medicare in assisted living
Medicare doesn’t cover the cost of assisted living or any other long-term care. Medicaid is the primary public funding source for these services, though it doesn't pay for room and board. However, Medicare remains important if your loved one enters an assisted living community because it may cover medical services they might need.
Seniors who have both Medicare and Medicaid are considered “dually eligible.” In this case, Medicare pays first for services covered under your loved one’s plan. Medicaid pays after Medicare and other health insurance plans they may have.
Reviewed by Certified Elder Law Attorney Letha McDowell.
Sources:
Understanding Medicaid Home and Community Services: A Primer, 2010 Edition (https://aspe.hhs.gov/reports/understanding-medicaid-home-community-services-primer-2010-edition-0)
Medicaid's Role for People with Dementia (https://www.kff.org/medicaid/issue-brief/medicaids-role-for-people-with-dementia/)
Medicaid Eligibility and People with Alzheimer’s (https://www.house.ga.gov/documents/committeedocuments/2019/innovative_financial_options_for_senior_living/medicaid_eligibility_and_people_with_alzheimers.pdf)
Qualifying for Medicaid (https://www.medicare.gov/basics/costs/help/medicaid)
Assisted Living Facts and Figures (https://www.ahcancal.org/assisted-living/facts-and-figures/pages/default.aspx)
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