For many seniors, making the switch to assisted living can come with a host of challenges — not the least of which is how to pay for it.
After all, a private, one-bedroom apartment in an assisted living facility costs a median of $4,000 per month in the U.S., according to the Genworth Cost of Care Survey 2018 — far more than the average social security check of $1,413 per month (the most common source of income for adults over 65). Without savings, it can be difficult for seniors to afford assisted living services or facilities.
Some states have Medicaid programs and other services to help seniors live more independently at home or in assisted living environments. But Medicaid is a joint federal and state-run program, and who can receive benefits, what it pays for and how to enroll varies from one state to the next.
Who can get Medicaid assistance for assisted living?
While the federal government requires Medicaid to cover low-income adults over 65, as well as those who are blind or have a disability, states themselves get to decide what criteria to use to determine someone’s eligibility.
Requirements are typically based on someone’s resources, but states have different thresholds for how much a person can have in savings or assets before enrolling in Medicaid. In some cases, states will adjust those thresholds to account for dependents or spouses who don’t require assisted living. Even so, seniors generally have to deplete almost all of their savings before being eligible to receive assisted living benefits through their state’s Medicaid program.
Visit Benefits.gov or your state’s Medicaid website for more information on eligibility requirements and how to enroll.
What assisted living services does Medicaid cover?
Not all states offer financial assistance for assisted living, and those that do rarely (if ever) cover the full costs associated with it. States pick and choose what services they will cover for enrollees. That said, there are a few common services that Medicaid will typically pay for, at least in part. These include:
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Case management
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Health services, like monitoring and assessments
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Personal care services
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Medication management or assistance
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Registered nurses or health aides
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Transportation
While fees for room and board aren’t covered through Medicaid directly, some programs might cover the cost of food preparation and dining services, though not the food itself. In some states, like Ohio, Medicaid might also pay for recreational activities and housekeeping, as well as help families transition from rehabilitation facilities to assisted living facilities. Those who are eligible to receive Medicaid benefits might still need to pay a co-pay or some subset of the costs, even for services covered under the state’s program, says Tyler White, an elder law attorney at JacksonWhite Attorneys at Law in Mesa, Arizona.
“As a rule of thumb, single Medicaid members are entitled to keep a personal needs allowance of about $115.00,” White says.
The rest of their income goes toward covering their share of assisted living costs.
How does Medicaid pay for assisted living?
There are several ways Medicaid programs cover services provided in or by assisted living facilities, according to a spokesperson from the U.S. Centers for Medicare & Medicaid Services. The most common ways are through home and community-based services (or HCBS) state benefits plans or special waivers.
HCBS state plans
HCBS state plans are entitlement programs open to everyone who qualifies for Medicaid in that state. What’s covered under these plans can vary pretty widely from one place to the next. For example, while nearly all states have state plans that cover home health therapies, case management and hospice care, only about a dozen offer plans that provide support for low-income seniors living in residential care facilities, or assisted living.
Waivers
Because Medicaid plans don’t cover the full cost of assisted living, some states fill in the gaps by offering special waivers. These waivers can be more restrictive (and expansive) than state plan benefits and are typically given to particular populations, such as adults over 65 with limited resources who need nursing facility level care but who want to continue to live independently.
That said, every state runs its waiver program a little differently. Waivers can be called by a lot of different names, cover different expenses and have different eligibility requirements. You can find the programs available in your area by reaching out to your local Council on Aging.
Other state programs
The cost of room and board in assisted living facilities generally isn’t covered by Medicaid. But some states can pay for these costs through optional state supplementation (OSS) — state-based programs that provide cash payments to supplement social security income for those living in certain care facilities. Sometimes these payments are paid directly to the facilities themselves.
Note: OSS and Medicaid are two separate programs. A person who receives OSS benefits might not be able to receive Medicaid benefits. It’s important to check with your state Medicaid offices to verify whether enrolling in OSS programs will make you ineligible to receive assisted living benefits through Medicaid.
Other ways to pay for assisted living
Not everyone can use Medicaid to pay for assisted living. Some might not qualify, and others might be too far down the waitlist to enroll or receive benefits when they need them. When that happens, families turn to other options, like private funding sources, insurance plans or veterans benefits.
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Private pay: Those who can afford to pay for assisted living out of pocket might find it a much simpler process than enrolling in benefits or insurance plans.
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Long-term care insurance: Like life insurance policies, adults can buy long-term care insurance in anticipation of needing assisted living or similar services. These plans work by paying a monthly premium (often beginning in your 50s or 60s) prior to needing assisted living services. Then, when you need the extra care, the insurance company reimburses you for costs covered by your policy. Keep in mind that every policy is different, so be sure to understand what your policy covers and how much it covers (maximum daily or maximum lifetime benefit). Some long-term care insurance policies also may have an elimination period (often 30 to 90 days you have to pay out of pocket before the policy will kick in, after a claim is initiated). If you’re considering purchasing a long-term care insurance policy, the cost of a policy is based on your age, health, and other factors.
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Veterans benefits: Veterans and surviving spouses might also be eligible for a benefit through Veterans Affairs, says Patrick Simasko, elder law attorney and wealth preservation specialist at Simasko Law in Mount Clemens, Michigan. Those who qualify for the Aid & Assistance program receive a monthly sum (on top of any pension) to use toward some assisted living costs.
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Reverse mortgage: Adults who own their home might choose to seek out a reverse mortgage to pay for assisted living or other expenses. Reverse mortgages are essentially cash loans that can be given as a lump sum or in monthly payments. Unlike more traditional loans, reverse mortgages don’t need to be paid back until the last borrower dies, moves away for a year or chooses to sell the home.
Figuring out how to pay for assisted living services can be a complicated process, especially for low-income seniors. To find out more information about what your state’s Medicaid program covers and whether you qualify, visit Benefits.gov.
