Exploring Medicaid Payments for Assisted Living: What You Need to Know
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When it’s time for you or a senior you care for to look into assisted living, the cost can quickly turn into an obstacle. According to Genworth Financial’s Cost of Care Survey, the average senior pays $4,500 a month for assisted living, with prices going much higher in many places. Paying for this can be a challenge, especially for older adults with limited incomes. Many seniors with limited resources receive health care coverage through their state’s Medicaid program, which may open the door to financial assistance in paying for care.
Assisted living communities house seniors in a safe, caring environment where their needs can be taken care of by trained staff. These are not medical facilities like skilled nursing homes, but they do offer help with activities of daily living and chore assistance. Many communities also offer premium features such as concierge services and lifestyle classes.
In this article, you will learn about Medicaid benefits and how they apply to assisted living costs. It includes an overview of the Medicaid program, eligibility for benefits and information about what services are typically covered by seniors’ plans. There’s also helpful information about state waiver programs that can help older adults get the assisted living care they need to thrive.
What Is Medicaid and Who Qualifies for Benefits?
Medicaid is the joint federal-state health insurance benefit for people with low incomes. More than 94 million Americans were enrolled in the program as of April 2023, and over 12.5 million seniors are eligible for both Medicare and Medicaid at the same time.
Each state has its own Medicaid program, which it operates within federal guidelines and with partial federal funding. The federal government requires state programs to provide benefits for people in mandatory eligibility groups, including families with limited financial resources, qualified pregnant women and people receiving Supplemental Security Income (SSI). States are generally free to expand coverage beyond these groups, however, and many include people with medical needs and seniors as presumptively eligible for benefits.
To qualify for Medicaid, you must be a citizen or legal resident of the United States and live in the state where you signed up. Each state sets income limits for Medicaid applicants, often using the federal poverty threshold as a baseline. People who earn less than the threshold are eligible for Medicaid benefits with no share of cost, while people who earn 300% or more of the limit are typically not eligible for coverage. Applicants who report incomes between these two figures may be eligible for some Medicaid coverage with a share of cost determined at the state level.
Does Medicaid Pay for Assisted Living?
Medicaid does not directly pay for lodging and nonmedical caregiver support at assisted living facilities. Because the program is fundamentally a health insurance plan, it can only pay for medically necessary services. Your benefits will typically cover medical goods and services authorized by a doctor, but not peripheral expenses that aren’t technically part of a medical care plan.
What Are Medicaid Waivers for Assisted Living?
Medicaid may not pay for assisted living directly, but it does cover the cost of hospitalization, nursing home care and memory care. These tend to be more expensive than assisted living care, prompting most states to offer seniors one or more assisted living waiver programs. Among the most common of these is the Home and Community-Based Services (HCBS) waiver. This waiver allows seniors to access care in community-based environments such as assisted living facilities instead of nursing homes.
If you are eligible for Medicaid and have a health condition that could justify nursing home placement, many states will issue payments directly to your assisted living community as a cost-saving measure. However, each state has its own eligibility requirements and specific programs.
To qualify, you must demonstrate both a financial need and a medical or functional need for assisted living care. If the community can meet all your needs and prevent hospitalization, you may be able to use your waiver to pay for the nonmedical services assisted living provides. However, it’s essential to check with your state’s Medicaid office for precise eligibility criteria and available waivers, as they can vary considerably.
How to Best Use Medicaid to Pay for Assisted Living
Many seniors qualify for multiple financial supports because of their age, income and other factors. Common programs for seniors include:
Social Security Income SSI/SSDI
Medicare
Medicaid
If you’re trying to put together a funding plan for assisted living, you can combine benefits to get as much coverage as possible. You can, for instance, use your Medicare benefits to cover the bulk of your health care costs, with Medicaid picking up the unpaid portion as a supplement. Non Medical board and care costs can then be paid for with a waiver that directly pays your community each month, and remaining unpaid fees can be taken care of out of the monthly Social Security or SSI/SSDI benefit that’s deposited to your bank account.
How to Apply for Medicaid to Pay for Assisted Living
States have different application procedures for Medicaid. As a rule, you can apply online or in person at your local social services office. If you already live in an assisted living community, there might be a staff benefits counselor who can help you apply for benefits. You will generally need documentation of your income and assets, along with a statement of medical need or a birth certificate to establish your age-related eligibility.
The Bottom Line
Assisted living can be expensive, and Medicaid doesn’t directly pay for it. However, you may be eligible for a Medicaid waiver that does pay for assisted living, which can go a long way toward making the cost of care affordable for seniors and people with limited assets.
Daniel Cobb began his career as a freelance writer over 10 years ago writing for websites such as TheSimpleDollar.com and Reviews.com. Since then, he has specialized in writing, editing, and managing the content team for Caring.com and other senior living websites. Over the last five years, he’s developed a deep understanding of the senior living industry and has enjoyed creating exceptional content that reaches millions of visitors every month. He can be reached at editorial@caring.com.
