Introduction
Medicaid long-term care is best known for its nursing home coverage, but it also tries to delay that coverage for as long possible by paying for care in the community. This includes paying for long-term care services and supports in assisted living residences and memory care facilities. These assisted living communities can often be too expensive for Medicaid beneficiaries, but many states provide options that make them more affordable. However, finding an assisted living residence that accepts Medicaid can be a challenge, the benefits can vary significantly by state, and Medicaid recipients can face discrimination when it comes to assisted living admissions and evictions. This article will address all of those issues and detail Medicaid’s assisted living coverage to help seniors and their families plan for their care and make the most of their benefits.

Medicaid Benefits in Assisted Living

Medicaid will pay for long-term care in assisted living residences and memory care for qualified applicants. The exact coverage can vary depending on the state, the Medicaid program and the beneficiaries themselves, but in general Medicaid benefits in assisted living include:

• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting)
• Nursing services
• Personal Emergency Response Systems (PERS)
• Case management
• Medication management
• Homemaker services (such as cleaning, laundry, shopping, cooking)
• Meal delivery
• Non-Medical Transportation

Medicaid will pay the assisted living facility directly to provide benefits, as long as it is Medicaid-certified and accepts direct payments, but Medicaid will not pay for services the facility is already providing as part of their contract with the resident. If the facility does not accept direct payments from Medicaid, Medicaid will pay a third-party caregiver to provide benefits, as long as the facility allows third-party caregivers to work with its residents.

It should be noted that Medicaid will not cover room and board in assisted living or memory care. However, there are other financial options that can help Medicaid beneficiaries pay those room and board bills, which we will discuss next.

How Medicaid Beneficiaries Can Pay for Assisted Living Room and Board

Since Medicaid is intended for financially limited individuals, it can be difficult for them to afford the room and board fees for assisted living or memory care, which are not covered by Medicaid. However, there are three ways states make these costs more affordable: mandating a cap on the fees, Optional State Supplement (OSS) programs, and allowing family supplementation.

Capping Assisted Living Room and Board Expenses
Some states set a maximum room and board rate that assisted living residences can charge a Medicaid beneficiary. In about a dozen states, the cap is the Supplemental Security Income (SSI) Federal Benefit Rate minus a monthly personal needs allowance (PNA). Other states simply set their own cap for assisted living room and board fees.

Optional State Supplement (OSS) Programs
These programs, which are also called State Supplemental Programs (SSP) in some states, provide extra money to Medicaid beneficiaries through their monthly SSI payments to help them cover living expenses. This can include paying room and board fees in assisted living.

Some states use the total of the OSS payment plus the SSI payment to cap room and board rates in assisted living for Medicaid beneficiaries. States that use this method include California, Florida, New York and Michigan.

Family Supplementation
If a Medicaid applicant or beneficiary receives monthly payments from a family member, friend or anyone else, it is usually counted toward the applicant/beneficiary’s income limit, so it could jeopardize their Medicaid eligibility and coverage. However, some states allow loved ones (family and friends) to pay a Medicaid beneficiary’s room and board fees without it counting toward their eligibility income limit. This is known as “family supplementation.”

These payments should never be made to the Medicaid beneficiary. Instead, they must be paid directly to the assisted living or memory care residence. It should also be noted these family supplementation payments will be counted as income when it comes to SSI eligibility, and it could reduce a beneficiary’s monthly SSI payment by as much as one-third.

Assisted Living Medicaid Programs

Medicaid will pay for long-term care services and supports through two types of programs – Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid.

HCBS Waivers

These Medicaid programs can vary dramatically by state in terms of their coverage, availability and even their names. However, most states do have at least one HCBS Waiver that covers long-term care in assisted living. The medical eligibility criteria for most of these Waivers is needing a Nursing Facility Level of Care (NFLOC), but exactly how a NFLOC is defined and evaluated can vary by state, and a few HCBS Waivers only require that applicants be “at risk” of needing a NFLOC in order to qualify. HCBS Waivers applicants must also meet two financial requirements – an asset limit and an income limit. These limits can vary by state, but in general they are low since Medicaid is intended for individuals with limited financial resources.

It’s important to note that some HCBS Waivers programs have waitlists that can last months or even years. How these waitlists are prioritized depend on the state and the program. Some prioritize on a first-come, first-served basis. Others do it based on the applicant’s care needs, so those with the most serious conditions are moved to the top of the list.

ABD Medicaid

Also known as state or regular Medicaid for seniors, ABD Medicaid will cover long-term care in assisted living or memory care for qualified applicants. The medical criteria for receiving a long-term care benefit through ABD Medicaid is showing a need for that benefit. So, applicants essentially qualify for their benefits one at a time, including those who live in assisted living or memory care. The financial requirements for ABD Medicaid can also vary by state, but in general they are lower than those for HCBS Waivers.

ABD Medicaid is an entitlement, which means that eligible applicants are guaranteed coverage without wait. So, there are no waitlists, unlike with HCBS Waivers.

Consumer Direction

Some HCBS Waivers and ABD Medicaid programs offer consumer direction, which gives beneficiaries a measure of decision-making power when it comes to their care. In some cases, this means they are given a monthly budget to spend on whatever healthcare goods and services they want, which could include paying for long-term care in assisted living or memory care. They could pay the facility directly or, depending on the facility’s rules, pay a third-party caregiver.

Not all states offer consumer direction, and not all consumer direction options provide a budget that would enable the beneficiary to pay for care in assisted living. To learn about consumer direction options for in specific states and programs that might benefit your clients, contact our team of professionals.

Finding Assisted Living that Accepts Medicaid

Not all assisted living and memory care facilities accept Medicaid beneficiaries as residents, and those that do may have a limited number of Medicaid beds or rooms. Unfortunately, there is no national search engine or database that tracks whether or not assisted living facilities accept direct payments from Medicaid or allow third-party caregivers paid by Medicaid to work with their residents. There are some state databases, but most of these are inadequate because they lack the right information and/or filters.

To find an assisted living or memory care residence that accepts Medicaid, seniors and their representatives should first determine which type of Medicaid program they will use – HCBS Waivers or ABD Medicaid – and if they will use consumer direction. Next, using a Google search, they should make a list of all the assisted living residences in the area, or memory care if the senior has Alzheimer’s disease or another dementia and needs specialized care. Then they should call the facilities on their list and ask the following questions:

• Do you have any Medicaid beds?
• How many?
• Are any available? If not, is there a waitlist?
• Are outside caregivers allowed?

After calling them all, the senior or a trusted representative should visit the facilities that accept Medicaid. They should call ahead of time to schedule a visit, and come prepared with a list of questions so they can find the facility that best meets their needs.

Denials and Evictions

Assisted living facilities make more money on private pay residents than they do on Medicaid residents, and there is no federal oversight to help regulate these facilities. This creates an environment where some assisted living applicants are denied simply because they are enrolled in Medicaid, and where some assisted living residents are evicted if they enroll in Medicaid while they are living in the facility.

There are some eviction protections for Medicaid beneficiaries. The HCBS Final Rule, established by the Centers for Medicare and Medicaid Services in 2023, states that all assisted living residents who are enrolled in an HCBS Waiver must have “comparable protections” from eviction as typical renters in the same state, county and city. This means that, at a minimum, assisted living residents must be given a written notice from the facility and a chance to appeal the decision before being evicted. Federal law mandates that when a private pay assisted living resident enrolls in Medicaid, the facility must accept the Medicaid rate as full payment.

Many states offer further protections for Medicaid beneficiaries in assisted living. Some require new living arrangements must be made before the facility can evict. Other states prohibit assisted living evictions as long as the Medicaid beneficiary is paying the state-specified room and board fee. And Kansas goes to the extreme of not allowing assisted living facilities to evict Medicaid beneficiaries for any reason.