Medicaid Long Term Care Mental Health Benefits for Seniors

For seniors with mental health issues, Medicaid Long Term Care offers some benefits. Coverage varies by state, but all states do offer some form of mental health care through their Medicaid program. Even in states where mental health services are not specifically listed as a Medicaid benefit, those services can often be covered by some part of the Medicaid plan.


What Medical Conditions are Considered Mental Health Issues?

The National Institute for Mental Health estimated that 21% of all adults in the U.S. suffered some form of mental illness in 2020, and that includes seniors. This includes mild to severe cases of depression, anxiety, bipolar disorder, schizophrenia, post-traumatic stress disorder, substance abuse issues and other forms of mental illness. It should be noted that “mental health” is often referred to as “behavioral health” when it comes to Medicaid.

 Conditions like Alzheimer’s disease and other dementias are considered brain conditions and not mental illnesses, but symptoms associated with Alzheimer’s and dementia can be considered mental health issues.

While conditions like Alzheimer’s disease and dementia cause mental impairments, medically they are considered brain conditions and not mental illnesses. The same is true for Mild Cognitive Impairment, which is, in simple terms, considered a lesser form of dementia. However, people with these conditions can often have mental health problems in addition to, and sometimes made worse by, their brain impairment. This combination of conditions can be difficult to treat and any care plan for an individual in this situation should take that into consideration.


Mental Health Benefits with Medicaid Long Term Care

There are three types of Medicaid Long Term Care – Nursing Home Medicaid, Home and Community Based Service (HCBS) Waivers, and Aged Blind & Disabled (ABD) Medicaid. As the name suggests, Nursing Home Medicaid covers room and board and health care services in a nursing home facility. HCBS Waivers cover in-home care services for people who have high level of care needs but wish to remain living at home or “in the community,” such as with a family member. ABD Medicaid, also known as Regular Medicaid, also provides health services for low-income people who are still living in the community and are over age 65, blind or disabled.

Medicaid state agencies have made recent efforts to integrate their mental health coverage and services into their overall programs. Part of the integration is an updated screening process where the state determines what each individual requires for care and where they might best receive that care. During this process, the state will look for any possible mental health issues and take them into consideration when creating a care plan.


Nursing Homes

Most Medicaid-approved nursing homes have some kind of mental health counselor as part of their full-time or part-time staff. These counselors can help Nursing Home Medicaid recipients cope with the mental health issues that often affect people at this stage of life – anxiety, depression, loneliness and confusion. If the mental health condition required a medical-level of support, a psychiatrist could be covered by Medicaid in some states using their “physician services” category.

Nursing Home Medicaid also covers prescription medications, which may help in some mental health cases. And Nursing Home Medicaid beneficiaries are under constant supervision, so any dramatic change in their mental health condition should be noticed by the facility’s staff.


HCBS Waivers and Regular Medicaid

Medicaid also provides mental health services for Home and Community Based Services (HCBS) Waivers recipients and ABD Medicaid recipients. Each state covers different services in different ways, so it’s important to familiarize yourself with the coverage in your state, but these mental health services can include:

• Individual Counseling/Therapy
• Group Therapy
• Bipolar Disorder Treatment
• Temporary Inpatient Treatment For Severe Mental Illness Episodes
• Vocational Training
• Independent Living Counseling
• Peer Support Groups
• Family Counseling
• Adult Day Care
• Prescription Medications
• Medication Management
• Case Management


Mental Health Coverage with Consumer Directed Care

Another way Medicaid Long Term Care recipients could pay for mental health services is through Consumer Directed Care, which is also known as Consumer Directed Services, Self-Administered Services and by other names. This program gives Medicaid recipients decision-making power when it comes to their health care. This can include the state providing the Medicaid beneficiary with an open-ended budget to spend on any health care related item of their choice, which could include mental health services. However, it should be noted, that consumer direction in care typically is more associated with personal care, not mental health.

Consumer Directed Care is most commonly used by people who have Home and Community Based Waivers. It can also be used by people with ABD Medicaid, but it does not apply for individuals with Nursing Home Medicaid.


Institutions for Mental Disease and Medicaid Long Term Care

If a Medicaid-eligible individual age 65 or over has severe enough mental health issues, Medicaid will pay for them to live in and receive care in an Institution for Mental Disease (IMD). The severity of their mental illness will be determined by a Preadmission Screening and Resident Review, which is a federal requirement to help ensure that people are not inappropriately placed or kept in nursing homes for long term care when they would be better served in an IMD.

Institutes for Mental Disease (IMD) are also known as psychiatric hospitals, inpatient psychiatric centers, mental institutions and by other names. The federal government defines an IMD as a hospital, nursing facility or other institution that has more than 16 beds where individuals reside to treat mental illness (including substance use disorders), as well as, receive medical and nursing care services.

  IMDs are generally not considered appropriate living environments for persons with Alzheimer’s or related dementias.

There are several factors that differentiate Institutes for Mental Disease (IMD) from nursing homes, assisted living facilities and memory care units. First and most importantly is that people must be diagnosed with a severe mental illness during the screening process to be eligible to live in an IMD, but that’s not the case with nursing homes, assisted living facilities or memory care units. IMD’s have a high-security environment, in California part of the definition of an IMD is being a “locked facility,” whereas many nursing homes and assisted living facilities try and promote a sense of freedom (even if it is restricted to the grounds) among their residents. And memory care units have specialized professionals, rooms and supplies to specifically help with cognitive disorder, dementia and Alzheimer’s that will likely exceed similar help at an IMD.


Eligibility Requirements for Medicaid Long Term Care Mental Health Benefits

All three types of Medicaid Long Term Care have financial eligibility requirements and functional (or medical) requirements. The financial requirements are an asset limit and an income limit. The details vary by state and marital status, but some general guidelines can be found here.

The functional (or medical) requirement for both Nursing Home Medicaid and HCBS Waivers is needing a Nursing Facility Level of Care (NFLOC). Each state determines this using their own assessments and guidelines that will generally include reports from the applicant’s primary care provider and other relevant medical professionals. In general, NFLOC means that a person needs to live in a supervised institutional setting with full-time skilled care on premises.

The assessments used to determine whether or not someone needs a NFLOC will usually include an evaluation of the individual’s ability to perform Activities of Daily Living (ADLs). Many mental health issues can impact someone’s ability to perform ADLs, so it is possible that a mental health condition could help someone become functionally eligible for Medicaid. The same is true for brain conditions like mild cognitive impairment, dementia and Alzheimer’s, which can also impair ADLs and leave someone needing a Nursing Facility Level of Care.

Nursing Home Medicaid and ABD Medicaid are entitlements, which means that if a person is eligible and applies for either program they must be accepted and receive benefits. HCBS Waivers, however, are not an entitlement, which means that even if a person is eligible and applies for a Waiver, they are not guaranteed to receive the benefits of that Waiver. Many Waivers programs have beneficiary limits, so some accepted applicants may be placed on wait lists before receiving benefits.