Assisted living is a housing option that offers supportive services to residents (mostly seniors) that need help with daily activities.
Supportive services typically include personal care, supervision, and some access to nursing care. Assisted living generally provides residents with more independence than nursing homes.
Assisted living is quite expensive, regularly costing over $50,000 annually. So, an important part of planning to move to assisted living is knowing how you will pay for it. Fortunately, there are several available financial aid options to lower personal costs.
When searching for financial assistance, families often wonder whether federal and state programs such as Medicaid cover assisted living costs. The answer is both yes and no.
If you or a loved one is wondering whether assisted living facilities accept Medicaid, the following questions and their answers will help inform your decisions.
Will Medicaid Cover the Full Costs of Assisted Living?
No. The vast majority of states actually offer qualifying seniors some coverage for assisted living costs under Medicaid, but you should not expect that the full costs of assisted living will be taken care of simply because you live in the right state.
In the states that offer some Medicaid assistance for assisted living, housekeeping services and custodial care are some of the most commonly covered services. Some states may also provide full coverage for case management, transportation, and medical alert systems.
Will Medicaid Cover Any of the Costs of Assisted Living?
Yes. As explained above, Medicaid will cover some of the costs of assisted living. Eligibility requirements, however, must be met. The requirements, available benefits, and programs will vary depending on your state.
Medicaid may also cover the cost of emergency response systems and skilled nursing. However, remember that Medicaid typically does not cover room and board, which often accounts for approximately 50 percent of the cost of assisted living.
Fortunately, most states have a regular Medicaid program along with Home and Community Based Services (HCBS) Medicaid Waivers. While states offer personal care assistance via Medicaid, some offer exclusively through state plans, some through waivers, and some through a combination of both.
How Do I Find Out What My State Plan Covers Specifically?
If you plan to use Medicaid to finance your stay in assisted living, remember that not all assisted living communities will allow you to use this option. States often cap the number of waivers available to seniors, and requests for receiving one can have extended waiting periods.
Despite state latitude, the federal government actually does not allow states to pay for any assisted living charges related to room and board. Still, states find creative ways to make this expense more affordable for seniors.
States may sometimes limit seniors’ out-of-pocket room and board costs for assisted living by offering supplemental Social Security from the state fund to cover the costs of having a rated maximum that assisted living facilities are allowed to charge residents.
States may even get creative with how they categorize and label costs, allowing them to pay for services such as meal preparation while not covering the cost of the food itself.
To find out what your state plan covers specifically, you should visit your state’s Medicaid website. From there, you can speak with a customer service representative to learn more about local services.
How Do You Qualify for Medicaid to Pay for Assisted Living?
Medicaid eligibility varies depending on the state, but federal law requires each state to cover certain populations. For instance, while the eligibility process differs, people with disabilities and low-income families are mandated to be eligible for Medicaid in each state.
To qualify for Medicaid to pay for assisted living, you must meet the following requirements:
- You must either have U.S. citizenship or be a permanent resident of the United States
- You must be a resident of the state where you wish to receive benefits
- Your income must fall below your state’s Medicaid income and countable assets limit
How Do You Find an Assisted Living Facility That Accepts Medicaid?
If you are looking for an assisted living facility in your state that accepts Medicaid, you should first visit your state’s Medicaid website to review the information available about the Medicaid waiver programs in your state.
Waivers allow the federal government to work around certain rules in the Medicaid rules. The waivers are intended to give individual states flexibility around certain objectives they want to achieve, such as improving or expanding care for certain groups of people and reducing costs.
You can also contact your local Medicaid office, Department of Elder Affairs, Department of Aging, or social service agency. Be sure to request a list of all available Medicaid programs in your state for which you or your loved one may be eligible.
If you already have an assisted living facility in mind, you can always call them to find out whether they accept Medicaid. If they don’t, you may consider looking elsewhere. Assisted living is usually expensive, so finding a facility that accepts Medicaid is a top priority for many seniors.
How Can You Pay for Room and Board in Assisted Living Since Medicaid Usually Doesn’t Cover It?
Assisted living costs in the United States are undoubtedly high. The average cost of a month-long stay in an assisted living facility is $4,300, which translates to about $51,600 annually. Prices vary depending on the care required, community amenities, and geographic location.
Even if you receive Medicaid coverage, you will still be responsible for room and board since it doesn’t cover this. Since those fees cost about $3,000 per month, you will owe approximately $36,000 annually, even after Medicaid assistance.
Your best option would be to plan for potential long-term needs early on. However, if you already have to finance assisted living much sooner, you should check whether you can receive a waiver.
Life insurance, personal and retirement savings, the proceeds from a home sale, a reverse mortgage, and veterans’ benefits are some ways to pay for room and board. Long-term insurance can also be used for this.
What Are Some Other Ways to Pay for Assisted Living Costs?
If you’re not having much luck with Medicaid and can’t afford to pay for assisted living, there are other ways to pay for assisted living costs. Carefully review your personal finances, find out whether your family can help, and weigh the pros and cons before you decide how to pay. Here are some other popular ways to pay for assisted living costs:
Long-Term Care Insurance
Long-term care insurance covers expenses such as home health care, staying in a nursing home, or even assisted living. The problem with long-term insurance is that you must buy it before you actually need it.
If you need help with activities of daily living (ADLs) or already have a disability, it is probably too late to buy long-term care insurance.
Paying Out of Pocket
Paying for assisted living costs out of pocket is something that seniors or their families regularly do. However, it doesn’t mean that you need to drain your savings.
You can use a mix of retirement accounts, personal savings, pensions, Social Security payments, and annuities. Selling your home and using the proceeds of the sale to move into assisted living is also an option.
If you are a veteran or are married to one, you should get in touch with the Department of Veterans Affairs (VA) or visit your local VA medical center to find out more about senior living options for veterans.
However, remember that the VA typically doesn’t cover room and board at an assisted living facility. Still, it might pay for additional services such as nurse visits.