Does Medicaid pay for assisted living?

Medicaid sometimes pays for care services in assisted living, depending on the state, but federal rules exclude the cost of room and board from waiver payments. So even where Medicaid helps, rent and meals are a separate question. Your state Medicaid agency decides what it covers, and Carevo does not assess eligibility.

Why the answer depends on the state

Medicaid is a joint federal and state program. Medicare.gov says each state runs its own program within federal guidelines and that the rules about who is eligible differ in every state.

The federal list of waiver services, shown below, does not include "assisted living" by name. The route we can source is the home and community-based services (HCBS) waiver, often called a 1915(c) waiver. Medicaid.gov says states can run these waivers for people who want long-term care services and supports in their home or community. Two points matter for assisted living:

1. The person needs an institutional level of care. Medicaid.gov says participants must need a level of care that would meet the state's requirements for institutional services. The federal rule in 42 CFR 441.301 says the state must determine that, without the waiver services, the person would require the Medicaid-covered level of care of a hospital, nursing facility or similar institution.
2. The state limits who can join. Medicaid.gov says states can narrow eligibility by age, diagnosis or other criteria, and they set the maximum number of people served.

Whether a state's waiver pays for services in assisted living at all, and in which communities, is the state's decision.

Federal rules also say waiver services may go only to people who are not inpatients of a hospital, nursing facility or similar institution. Someone who is already in a nursing facility is on a different footing from someone living in a community setting, and a state agency can tell you what applies in a particular case.

What a waiver can pay for

42 CFR 440.180 says home or community-based waiver services may include, as the state defines them and CMS approves:

• case management
• homemaker services
• home health aide services
• personal care services
• adult day health services
• habilitation services
• respite care services
• other services CMS approves as cost effective and necessary to avoid institutionalization

These are care services, not rent. A state chooses from this list.

The room and board rule

Under 42 CFR 441.310, federal Medicaid funding for waiver services does not cover the cost of room and board. The rule defines "board" as three meals a day or any other full nutritional regimen. It lists two exceptions:

• Respite care in a facility approved by the state that is not a private residence.
• A live-in personal caregiver: a portion of rent and food that can reasonably be attributed to an unrelated caregiver who lives in the same household as the waiver participant. This does not apply if the participant lives in the caregiver's home, or in a residence the provider owns or leases.

For assisted living, the practical result is that waiver money can pay for personal care or other services while the resident's rent and meals are paid some other way. How a state handles that, and what a community charges, are questions for the state and the community. Our guide to what drives assisted living cost lists what to get in writing.

Where the setting rules come in

The federal rule also sets conditions for home and community-based settings. Under 42 CFR 441.301, a setting must be integrated into the community and chosen by the individual from among options, and it must protect privacy, dignity and respect. Extra conditions apply to residential settings that a provider owns or controls. They include a tenancy-type arrangement, lockable entry doors, a choice of roommates, freedom to decorate, control over schedules and food, and visitor access. Nursing facilities, hospitals and similar institutions are not HCBS settings.

Ask a community that says it takes Medicaid whether it takes waiver residents, how many it has, and how it meets these conditions.

Income and assets

Medicare.gov says you generally must meet your state's income and resource limits and other requirements, such as state residency. Some people whose income is too high may still qualify by spending down: paying non-covered medical costs and cost-sharing until income falls within the limit. For more on that, see Medicaid spend down.

Federal law also checks for assets given away or sold for less than fair market value in the look-back period before you apply. See the Medicaid look-back explained and the look-back calculator.

Before you move, sell or give away any money or property, talk to your state Medicaid agency or a qualified elder law attorney. A transfer can lead to a period of ineligibility. This page is general information, not legal or financial advice.

What to ask your state Medicaid agency

1. Does a waiver in my state pay for services in assisted living, and which communities qualify?
2. What level-of-care test applies, and is there a waiting list?
3. How do residents pay for room and board, and what income must they keep?
4. What are the income and resource limits for my situation?
5. If a spouse lives at home, what protections apply? The spousal protection calculator explains the federal standards.

For the wider picture, see our Medicaid and long-term care guide and assisted living vs nursing home. To compare facility bills with home care, use the care cost comparison.