Medicaid Benefits in Assisted Living / Memory Care: What Is & Isn’t Covered

Summary
There are two types of Medicaid programs that will pay for services in assisted living. Assisted living costs (and memory care for persons with dementia) are usually related to medication management, personal care and meal preparation. In most states, some of these costs can be covered by Medicaid. However, the specific benefits, service providers and eligibility criteria vary from state to state. Recipients must qualify functionally (demonstrate a medical need) and financially (be considered low-income). Unlike Nursing Home Medicaid, Medicaid Long Term Care programs for assisted living will not pay for room and board.

 

 

Two Types of Medicaid Long Term Care Programs that Cover Assisted Living

There are two types of programs under Medicaid Long Term Care (LTC) that will pay for costs in assisted living: Aged, Blind and Disabled Medicaid, and Home and Community Based Services (HCBS) Medicaid waivers.

 ABD Medicaid benefits are entitlements, HCBS waivers are not. However, ABD Medicaid usually has more restrictive financial eligibility criteria.

 

Aged, Blind, and Disabled (ABD) Medicaid

Also called Regular Medicaid, ABD Medicaid is an entitlement, which means that anyone who qualifies financially and demonstrates the need for medical and/or personal care services must be covered. (Alternately, HCBS waivers, described below, are not entitlements, and there are often waiting lists for those services.)

Some Long Term Care Medicaid programs are meant to save costs by keeping someone in their home rather than moving into more expensive nursing homes. In most states’ definitions of “home,” include assisted living residences and memory care communities. Medicaid cannot, by law, cover rent or room and board in assisted living but any services that keep a person healthy are probably covered. Examples of this would include medication management, hot meal preparation, homemaker services that someone with a disability cannot do themselves, and, most notably, help with Activities of Daily Living (ADLs) like eating and bathing.

ADL help from a professional attendant is also paid for under Medicaid plans that offer the Community First Choice (CFC) option. Under the Affordable Care Act, nine states have launched a CFC program: Alaska, California, Connecticut, Maryland, Montana, New York, Oregon, Texas, and Washington. Someone who would otherwise need to live in a nursing home can instead stay in their assisted living community and receive help with ADLs and IADLs from a visiting attendant through CFC.

 

Home and Community Based Services (HCBS) Waivers

While there is at least one Home and Community Based Services waiver in every state, not every waiver will cover services in assisted living. The definition of “community” often includes assisted living homes but does not guarantee it. HCBS waivers are for people who cannot live independently, or need a nursing-home level of care, but want to remain in their own home or assisted living community. Waivers typically offer more benefits for receiving care in assisted living homes than regular ABD Medicaid. Some of the options available through waivers that you cannot get from ABD Medicaid include non-medical transportation and physical therapy.

HCBS waivers are not considered an entitlement like ABD Medicaid. There are a limited number of slots available on waivers, which means there may be a waiting list in your particular state, and waiting lists can be as long as several years. Also remember that waivers might be more localized, meaning they are only available in certain parts of a state or only available to persons with specific disabilities such as dementia. Contrast this with ABD Medicaid which is available consistently across a state.

 

Medicaid Benefits in Assisted Living

 

Services Covered by Medicaid in Assisted Living / Memory Care

The services that Medicaid covers in assisted living homes will vary depending on the state. Very generally, Medicaid Long Term Care provides payments to help people who cannot live independently due to age or a chronic medical condition like Alzheimer’s or Parkinson’s disease. These are the assisted living services that Medicaid LTC provides in most states:

– Help with activities of daily living (ADLs) like eating, bathing, getting dressed, etc.
– Help with Instrumental Activities of Daily Living (IADLs) like housekeeping, shopping, managing finances or medications, etc.
– Transportation
– Meal preparation
– Personal Emergency Response Systems (PERS) or medical alert devices

Again, the costs that Medicaid will not cover are room and board in assisted living. This is different from Medicaid nursing homes, in which Medicaid does cover room and board. People in assisted living may be able to receive help with room and board from other programs including Supplemental Social Security described below.

 

Getting Covered in Residences that Do Not Accept Medicaid

Because Medicaid coverage is different in every state, there are nuances involved in using benefits to pay for assisted living. Not all states consider assisted living a “home,” and so services like help with activities of daily living might not be covered. Also, some assisted living homes do not accept payments through Medicaid (this means they are not “Medicaid-certified”). Those communities, however, still might allow residents to receive help from care providers who will take payments through Medicaid. In other words: Even if a home does not accept Medicaid, you may be able to get services from an outside third party who does accept Medicaid payments.

You want to ask two questions about Medicaid in assisted living: Does the residence accept Medicaid? and Does the residence allow outside caregivers? If they allow outside, third-party caregivers, you can still cover costs with Medicaid, even in homes that aren’t Medicaid-certified.

 

Non-Medicaid Assistance for Medicaid Beneficiaries

Unlike for people who live in nursing homes, Medicaid will not cover room and board costs in assisted living (nor in memory care communities for people with dementia). It may be possible, however, for someone who receives Medicaid to find additional benefits that will help pay for room and board in assisted living. States often offer an optional supplement, or OSS, to regular social security or SSI payments. Supplementary benefits can be put toward room and board in assisted living, so residents on SSI who are Medicaid-eligible can use OSS to pay rent. Medicaid recipients in assisted living should contact their local Social Security Administration office to see if they qualify for SSI payments that can cover room and board costs in assisted living.

 

Eligibility for Assisted Living Medicaid

In all states, someone can only receive Medicaid if they are financially qualified. Each of the two Medicaid programs described above have different financial eligibility criteria. Financial criteria also vary by state, marital status and if both spouses are applying for Medicaid. The simplest way to get specific eligibility requirements for your family’s situation is to use our Medicaid Eligibility Requirements Finder tool.

Both Medicaid Long Term Care programs that provides for services in assisted living have limits on the income and the assets of the Medicaid applicant.

HCBS waivers are typically less restrictive financially. Single waiver applicants in 2022 in most states must earn less than $2,523 per month and have countable financial assets valued at $2,000 or less. Most homes are exempt. Married applicants have higher limits.

Single ABD Medicaid applicants, in the majority of states, must earn less than either the income limit for Supplemental Security Income or the Federal Poverty Level. These figures for 2022 are $841 and $1,133 respectively. Asset limits for ABD Medicaid are usually the same as for HCBS waivers. Homes are exempt provided owner-occupied or with homeowner equity under a certain limit. Married couples have slightly higher limits.

Someone is functionally or medically qualified for Medicaid Long Term Care if they’ve been assessed by a healthcare professional for needs like completing activities of daily living. ADLs are the necessary tasks we do every day, like bathing or eating, and it is often people who cannot perform ADLs who need assisted living and demonstrate the functional need for Medicaid. Someone who does not need nursing-home-level care might be considered functionally eligible for Aged, Blind and Disabled Medicaid benefits, but to receive HCBS waiver funds in most states a person must prove to a medical professional that they would need to move into a nursing home without the benefits.

 

Finding Assisted Living that Accepts Medicaid

It can be difficult to find assisted living homes that accept payments from Medicaid, because not every state maintains an accessible list of Medicaid-certified residences. Potential residents therefore should contact assisted living homes and simply ask about their Medicaid policy. These are the questions you want answered:

– Do you accept Medicaid?
– Do you allow outside caregivers to enter the residence and provide services?

It is possible that a residence that does not accept Medicaid, and therefore won’t allow you to pay for any services through the program, will still let residents receive care from outside, third-party medical professionals who do accept Medicaid payments. This means someone who lives in an assisted living home that does not accept Medicaid could still use Medicaid to pay for services there.

A good resource for narrowing down your search is the Area Agency on Aging, which might keep a list of Medicaid-certified residences and service providers. To find your local AAA office, click here.