Medicaid's Assisted Living Benefits: A Good Option for the Lucky Few

Questions about Medicaid's assisted living benefits are probably the second most common questions we receive. The first being the more rhetorical "what do you mean Medicare doesn't pay for assisted living?". The latter has a simple answer, but the former is much more complicated as Medicaid benefits vary from state to state. Our organization recently undertook a major research project to determine just what Medicaid will pay for with regards to assisted living in the year 2012.

The first and most important point to make is that institutional or long term care Medicaid does not pay for assisted living. It is intended to help improvised individuals who require nursing home care. However, Medicaid Waivers in many states do provide assistance to individuals in assisted living residences. To avoid future confusion, we should mention that Medicaid Waivers are often referred to HCBS, Home and Community Based Services,1915 Waivers and sometimes Demonstration Projects.

The second, and also critically important point to make, is that unlike institutional Medicaid, Waivers are not entitlements. An entitlement program means that if one meets the eligibility requirements, they receive the benefits. Waivers, on the other hand, have enrollment caps (or slots in Medicaid parlance). Each Waiver is approved to assist a limited number of persons and once the limit has been reached, a waiting list is started. Another finding from our study was that the types of assisted living benefits varied by state and can be loosely grouped into one of three categories.

1) Personal Care Only - these states will pay for their waiver participants personal care costs regardless of the location in which they reside. Therefore, assisted living residents could expect the personal care portion of their assisted living bills to be covered, at least up to Medicaid's allowable reimbursement rates.

2) Nursing Home Level Care - similar to above, these states pay for personal care but also cover other nursing home level types of care for waiver participants. Again, independent of residence.

3) Complete Assisted Living - in these states, their Medicaid Waivers will pay for both personal care, nursing home level care and the room and board costs for the participants. Individuals must reside in assisted living communities which accept Medicaid reimbursements.

While the number of individuals receiving Medicaid help in assisted living is limited as is the amount of assistance they receive; the situation is not all doom and gloom. In fact, the long term view (current political environment aside) can almost be considered rosy. Ten years ago, approximately half the number of states provided assistance and we fully expect this positive trend will continue. Ten years from now, Medicaid Waivers in all 50 states will likely be covering assisted living for the elderly in some capacity.

We've consolidated the results from our study into a State by State Guide to Medicaid's Assisted Living Benefits in which we explore each state's coverage, its limitations and other state based alternatives.