Assisted living aims to help older adults with activities of daily living (ADLs), including dressing, grooming, and feeding, providing accommodations and personalized care. There are several ways that can help offset the costs of long-term care, including Medicaid and Medicare.
Medicare and Medicaid Defined
Medicare is a federal program focusing on medical care for those 65+, including hospital stays, doctor visits, prescription drugs, and skilled nursing services. While this program generally does not cover long-term care in nursing homes, it can still cover medical-related expenses, like prescription drugs and medical supplies.
Medicaid, on the other hand, is a joint federal and state program that helps eligible individuals and families, especially older adults and people with certain disabilities, with limited incomes and resources. Depending on the state, Medicaid offers Home and Community-Based Services (HCBS) waivers that can help cover assisted living services. Medicaid typically does not cover board and accommodation.
Medicare and Assisted Living
Medicare does not cover custodial care or residing in an assisted living community, and non-medical services like support for activities of daily living (ADLs), adult day care, and home-delivered meals. However, it can pay for medical services in an assisted living community, including:
- Skilled nursing after hospitalization.
- Medicare Part A can cover part of the costs for a short-term stay of up to 100 days if the beneficiary:
- Admitted to the hospital with an inpatient stay of three days or more.
- In need of skilled care, including physical therapy and other skilled nursing services.
- The community where they reside is Medicare-certified.
- If admitted to a Medicare-certified community within 30 days of an inpatient hospital stay.
- Medicare pays for the full cost for the first 20 days, while a co-payment is required for the remaining days until 100.
- Medicare Part A can cover part of the costs for a short-term stay of up to 100 days if the beneficiary:
- Medical services are necessary for treating an illness or injury.
- Medicare Part A or Part B can pay for long-term care services that are deemed necessary. These services can be covered intermittently if:
- The service remains a medical necessity.
- The attending physician requires them every 60 days.
- These include:
- Intermittent skilled nursing care
- Therapy services, like physical therapy, occupational therapy, or speech-language pathology services.
- Medical social care services for social and psychological issues.
- Medical supplies
- Medical equipment
- Medicare Part A or Part B can pay for long-term care services that are deemed necessary. These services can be covered intermittently if:
- Memory care
- Cognitive conditions, including stroke, Alzheimer’s, Parkinson’s, ALS, and Multiple Sclerosis, can be covered to prevent further decline.
- Hospice Care
- Medicare Part A covers the full cost of hospice care. However, certain prescriptions for any outpatient drugs required for pain and symptom management require a copayment of $5.
Limitations of Medicare
- Custodial or residential care and most assisted living services, like ADL support, are not covered.
- Only covers short-term skilled nursing.
Medicaid and Assisted Living
Medicaid coverage varies by state and is usually administered through Home and Community-Based Services (HCBS) Medicaid waivers or 1915(c) Medicaid waivers. However, most Medicaid waivers do not cover board and room, and the services covered widely depend on the state.
- Covered services usually include:
- ADL support, including grooming, bathing, dressing, and continence management.
- Transportation
- Housekeeping services
- Recreational activities
- Emergency response systems
- HCBS Waivers
- Aims to delay the transition to nursing homes by covering a variety of services based on state policies.
Eligibility
Medicaid focuses on those low-income older adults and individuals with disabilities who meet certain financial and functional requirements.
- Income and Asset Limits 2025
- The individual income limit is $1,800 per month and $2,433 per month for couples.
- Asset limits are generally $2,000.
- State Variations
- Income and asset limits generally follow federal guidelines. However, states have the freedom to adjust accordingly.
- For example, California, as of 2024, has abolished the asset limit for most Medicaid programs. However, income limits are still applicable at around $1,801 per month.
- Each state also has different state programs for Medicaid, like Georgia’s Community Care Services Program, California’s Home and Community-Based Alternatives (HCBA), and Texas’s STAR+PLUS waiver.
- Functional Requirements
- Eligibility for waiver programs is usually determined through assessments by Medicaid-partnered healthcare professionals.
- Other requirements
- Applicants must be residents of the state they are applying to, and the community must be Medicaid-certified.
- Waiver capacity
- Depending on the state, waivers may only provide coverage for those 55+ and 65+.
Steps to Get Medicare and Medicaid to Pay for Assisted Living
- Assess Eligibility
- Medicare
- Medicare only covers medical services, including skilled nursing, therapy, and hospice. Hence, health assessments or medical diagnoses are necessary.
- Medicaid
- Ensure that your financial and functional capabilities meet the state’s requirements. Applicants may reach out to the state’s Medicaid office of the Health Insurance Marketplace to ensure eligibility.
- HCBS waivers have limited enrollment, so even if an applicant meets all requirements, they are not guaranteed the benefits.
- Verify Medicaid-Certified Communities
- If eligibility is verified, it is important for beneficiaries to verify that their chosen communities are Medicaid-certified.
- Supplement Room and Board Costs
- Since Medicaid and Medicaid waivers generally do not pay for room and board, it is the responsibility of older adults and their families to find supplementary funding options to cover the gap.
- Private Pay or Personal Funds
- Most families and older adults resort to utilizing savings, pensions, and Social Security incomes.
- State Supplements
- Several states provide Optional State Supplementation (OSS) of Supplemental Security Income (SSI) to cover part of room and board expenses.
- Private Pay or Personal Funds
- Plan for Medicare-Covered Services
- In case of a medical emergency, having Medicare may ease financial burdens for covered services, even while staying in an assisted living community.
- Recertify Medicaid Eligibility
- To ensure ongoing eligibility, beneficiaries are required to submit updated financial and medical documentation.
Challenges and Considerations
- State Variability
- Since coverage and services widely vary by state, it is highly suggested for residents to reach out to local agencies to avoid mishaps.
- Dual Eligibilities
- Beneficiaries with both Medicare and Medicaid should ensure that Medicare is charged first for covered services to optimize coverage of both programs.
- Limited Medicaid Communities
- Not all assisted living communities are Medicaid and Medicare-certified, so it is best to verify to optimize benefits.
- Spend-Down Rules
- Income spend down
- Allows individuals with exceeding income to qualify by reducing countable income through spending on medical expenses.
- Asset Spend Down
- Individuals may use excess assets through permissible methods, like paying off mortgages or debts, home repairs, and pre-paying funeral and burial expenses.
- Income spend down
- Waitlists
- Since HCBS waivers have limited enrollment, those eligible but who have not reached the limit may be subjected to delays in receiving benefits.
Generally, Medicare does not pay for assisted living services, but medical services in an assisted living community may be covered, depending on eligibility. On the other hand, Medicaid provides more coverage than Medicare, especially through HCBS waivers. However, most Medicaid waivers do not cover room and board, so it is highly suggested that older adults and families find suitable supplementary funding. To avoid depleting resources for long-term care, it is highly suggested that older adults and families plan their funding options accordingly.
