Thursday, January 22, 2015

Using Medicaid to Pay for Assisted Living

We received a call recently from a family looking to help their mother move into assisted living.
Photo by Abbeyfield Kent
Their mother was increasingly unable to care for herself in the large house where she lived alone. Her income was well below the 300% of federal poverty level set by the Social Security Administration and, unfortunately, she had little savings. They wanted to know how they could use Medicaid to pay for the cost of assisted living care. This family’s inquiry was very common, so we wanted to share the answer, in a general way, as a blog post.

Medicaid’s Long Term Benefits

The states and the Center for Medicaid Services (CMS) have been responding to popular demand for this form of long term care and, over the last decade, we have seen a significant improvement in the program rules and waivers with regards to their assisted living benefits.

The long term care benefits from Medicaid generally consist of nursing home care, not assisted living. (For more about how Medicaid is structured see this simple explanation.) While nursing homes provide a more comprehensive and sophisticated level of care, many people who are well enough prefer the independence and higher activity levels of assisted living communities. When someone who is Medicaid qualified, medically and financially, and yet prefers to live in assisted living instead of a nursing home, they can turn to the states’ Medicaid Waivers.

State Programs Vary

While there’s a federal administration for Medicaid oversight and regulations, the states are left to implement their own versions of the low income health insurance program. In our research, we found that 44 states now offer some help for individuals to pay at least some of their assisted living costs via Medicaid programs and waivers.

Often these state Medicaid programs use different names and ways to refer to their assisted living benefits. Sometimes these programs will be called care homes, supported living communities or adult foster care, among other names.

And it is not just the names that differ—the benefits do as well. Sometimes, the state programs will reimburse only for the actual care and skilled nursing services provided by the communities. Often, the cost of the room and food is excluded from being paid by the states, but at least a few states have waivers that include the full cost of the assisted living as long as it is at one of their approved facilities.

In order to learn more about the particular benefits available in your state’s Medicaid program and its associated waivers, we refer you to our partner’s website for a “State-by-State Guide to Medicaid’s Assisted Living Benefits.”

Affordable Alternatives

While Medicaid is one of the most well known and largest programs for long term care benefits in the US, it is still not designed to address the growing demand for receiving care in assisted living. It might not be the best source of funding for your family. Because Medicaid is often restricted to only paying for the care services, the rates paid out might not be sufficient to cover all of an elder’s expenses.

It might be best to start with an assisted living community search to find the most affordable community for your family. Assisted living rates will vary widely, even within the same city. A free search service could help families locate communities that fit their budget.