Medicaid, a joint federal and state health insurance program for low-income individuals, can help cover some costs associated with long-term care and assisted living.
But who qualifies, and how much does Medicaid cover? We’ll examine the ins and outs of Medicaid options so you can budget accordingly in case your future holds a stay at an assisted living community.
Medicaid vs. Medicare: What’s the Difference?
Many people want to know: Does Medicaid pay for assisted living? The short answer is that it can, in some cases, but there’s much more to know about this public health assistance program.
First, it’s important to note that Medicaid is a separate program from Medicare.
— Medicare is federal health insurance for people age 65 and older. Some people with disabilities who are younger than 65 can qualify for Medicare coverage if they meet certain criteria.
— Medicaid acts as a social safety net for low-income individuals regardless of age. While the federal government imposes certain rules that each state agency must follow, Medicaid benefits are managed at the state level. Together with the Children’s Health Insurance Program, Medicaid provides health coverage to more than 92.5 million Americans and is the single largest source of health coverage in the U.S.
Medicaid qualification criteria
According to the Centers for Medicare & Medicaid Services, to qualify for Medicaid, you must meet several criteria:
— Your income must be below your state’s Medicaid income limit, or your medical-related care expenses must exceed your income.
— Your “countable assets” (cash, stocks, bonds, investments, bank accounts and real estate holdings that are not your primary residence) must fall within a certain range.
— You must be a citizen of the U.S. or a permanent resident.
— You must reside in the same state where you’re seeking benefits.
— You must have a qualifying medical need.
[Read: Medicaid Coverage for Nursing Home Care.]
Does Medicaid Pay for Assisted Living?
The National Council on Aging (NCOA) reports that Medicaid does not cover room and board, two big components of assisted living communities that contribute to how expensive they can be.
However, many states have Medicaid waiver programs that can assist with other costs associated with assisted living. Called Home and Community-Based Services (HCBS) waivers or 1915(c) Medicaid waivers, these programs help cover some of the services and supports that older adults and some people with disabilities need.
Depending on the state and the details of each waiver program, these waivers can be used at adult day care centers, assisted living facilities and other care settings that support older adults. Medicaid.gov provides a list of all state waiver programs with more information about which programs are available in each state and what’s covered.
NCOA notes that nearly 1 in 6 assisted living residents depends on Medicaid to pay for daily care services.
[READ: Assisted Living Costs and How to Pay]
Assisted Living Costs Covered by Medicaid
One of the biggest differences between Medicare and Medicaid comes in how these programs cover care options. Medicaid covers some expenses, while Medicare does not.
“Medicaid benefits are guaranteed to certain individuals, including the elderly, who meet specific income limits,” explains Diane J. Omdahl, Wisconsin-based president and co-founder of the Medicare consulting firm 65 Incorporated. “One of these benefits is long-term care, which can cover the costs of assisted living for those who qualify.”
It’s worth repeating: Medicaid does not cover for the cost of room and board in assisted living facilities. However, HCBS waivers may cover some or all of the following expenses for those who are unable to pay:
— Activities of daily living, such as toileting and personal hygiene
— Nursing care
— Medical supplies and equipment
— Medication management
— Medical assessments and exams, such as preventive care, checkups and diagnostic tests
— Case management services (coordination with medical providers)
— Respite care for a primary caregiver
— Mental health services
— Access to senior centers or adult day care services
— Transportation services, particularly to and from medical appointments
While these waivers can provide a real lifeline for many older adults in assisted living situations, NCOA notes that these waiver programs have limited enrollment. That means some people who meet all the requirements will find themselves on a waiting list until a slot becomes available.
[READ: A Checklist For Finding the Best Assisted Living Facility]
Assisted Living Costs Not Covered by Medicaid
As noted above, while Medicaid covers most of your nursing and medical care needs while you’re living in an assisted living community, it doesn’t pay directly for room and board.
Check with your state agency that handles Medicaid benefits to determine your eligibility for any supplemental assistance programs, what exactly is covered and how to get enrolled. The Medicaid.gov website lists lots of resources that can direct you to the right place in your state to ask for help paying for assisted living expenses.
Do All Assisted Living Facilities Accept Medicaid?
Not all assisted living facilities accept Medicaid. And, the facilities that do accept Medicaid may cap the number of beds they make available to residents who rely on Medicaid. The facilities that don’t accept Medicaid may still permit service providers who do to come into the facility to assist Medicaid-funded residents. It can be complicated, so be sure to ask at any facility you’re considering moving into about their policies in case you end up relying on Medicaid.
Your local Area Agency on Aging can also help you figure out which communities near you accept Medicaid and how to find the right place for your needs.
How to Qualify for Medicaid
To qualify for Medicaid, you must meet certain parameters set by the state in which you reside. Medicaid is intended for low-income individuals, so you must prove that your financial resources are low enough to become eligible for Medicaid. For many seniors, that means selling your home and spending down your other assets before being able to tap into Medicaid for financial support.
Navigating Medicaid eligibility can be confusing, notes Kate Granigan, CEO of LifeCare Advocates in Newton, Massachusetts, and president of the board of directors with the Aging Life Care Association. But working with an elder law attorney who specializes in Medicaid can help ensure you meet the strict criteria and avoid “unknowingly disqualifying yourself by making financial gifts” or stumbling into other pitfalls that could affect your qualification status. She also notes that senior living facilities that accept Medicaid often have someone on staff who can help you navigate the process of applying.
Granigan urges people to keep in mind that not all facilities accept Medicaid, so if you think you’re going to need to rely on Medicaid in the future, it’s important to ask whether a specific assisted living facility accepts Medicaid waivers before making the move to that community.
Start planning early for senior care expenses
Because Medicaid doesn’t become an option until you’ve spent down your other assets, it’s best to plan ahead to finance care using other resources, such as long-term care insurance policies, for as long as possible, says Stephanie Pogue, a St. Louis-based Certified Medicare Insurance Planner and the CEO of St. Louis Insurance Group.
Such policies can help pay for nursing home and assisted living communities, “but the policy must be in place for a period of time prior to using the services, and you must be healthy enough to qualify for it initially,” Pogue notes.
If you don’t have such a policy, you may be in for a bumpy ride until you have spent down your reserves enough to qualify for Medicaid.
“People must pay out of pocket until their assets are depleted and the state’s Medicaid program steps in,” Pogue notes.
How to Qualify for Medicaid Payments for Assisted Living
To qualify for a Medicaid HCBS waiver for assisted living, you must meet certain financial and functional requirements laid out by the state in which you reside. These can vary by state, but in most states, the financial requirements indicate that the applicant can’t have income in excess of 300% of the Federal Benefit Rate.
The 2024 Federal Benefit Rate is $943 for a single individual and $1,415 for a married couple. So, if you’re taking in more than $2,829 per month as an individual or $4,245 as a married couple, Medicaid won’t be able to help you.
The Federal Benefit Rate is adjusted annually. The American Council on Aging reports that if you qualify for Social Security Insurance benefits, you’ll also qualify for Medicaid benefits in some states.
How to Apply for Medicaid
Using Medicaid benefits to cover some of the costs of assisted living will require you to apply for and receive an HCBS waiver — and that’s not guaranteed because each state has caps on enrollment in the program.
These waivers are a provision of Medicaid law that allows a state to waive rules that would otherwise apply. This way, states can provide expanded care for a certain target group, such as older adults or pregnant women, or reduce costs.
More specifically, these waivers can meet the needs of seniors who prefer to get long-term care services and support in their home or community rather than in an institutional setting, such as a nursing home. The idea is that providing care in the person’s house or in an assisted living facility is often less expensive than providing the same care in a nursing home.
The application process for these waivers varies by state. You’ll also have to apply for Medicaid if you aren’t already enrolled.
You can contact your state Medicaid agency for advice on how to apply. As mentioned, the Medicaid.gov website is also a great resource for understanding your options and how to access this benefit. You can also find lots more info on the Medicaid application information site.
Other Ways to Cover Assisted Living Costs
Many people assume that Medicare will cover senior care expenses, but this can be an expensive miscalculation, Omdahl says.
“It’s worth noting that Medicare, often mistaken for covering long-term care, actually does not provide such coverage,” she says. “In fact, 56% of middle-income baby boomers believe that Medicare will pay for their ongoing long-term care.”
This misunderstanding may lead to an unpleasant surprise when seniors go to pay for such care and find that Medicare simply doesn’t cover those needs. Instead, Omdahl recommends looking to other programs and products for help in paying for senior living expenses.
“There are several options available to help older adults cover the costs of assisted living, especially if they require assistance with daily activities,” she says.
These options include:
— Traditional long-term care insurance
— Deferred long-term care annuities
— Combination insurance products
— Health savings accounts
— Reverse mortgages
— Charitable remainder trusts
— Medicaid
Start Today by Exploring Top-Rated Assisted Living Facilities with U.S. News
Paying for senior care needs can get expensive, and for many seniors who haven’t been able to set aside enough funds for assisted living, Medicaid could help offset some of the costs.
You can start your search for the best assisted living community for your needs, whether you’ll be relying on Medicaid or not, with U.S. News’ Best Assisted Living Communities 2024 ranking, which includes 3,500 communities across the country. These facilities have been listed based on more than 400,000 survey responses from residents and family who’ve benefited from the services and support these communities provide.
Start your search today to get a jump on future needs and access the best care near you.
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Does Medicaid Pay for Assisted Living? What You Need to Know originally appeared on usnews.com
Update 08/23/24: This story was previously published at an earlier date and has been updated with new information.
