A Place for Mom
Assisted Living
Memory Care
Independent Living
Veteran Resources

Make the best senior care decision

Medicare, Medicaid, and Long-Term Care

By Liz DupontMay 10, 2022
Share this article:

Many seniors and their families search for ways to make long-term care more affordable. In some cases, Medicare and Medicaid can help by financing senior health services and some types of senior living. Though not everyone qualifies for these programs, many individuals do — potentially reducing their senior care costs.

As many as 6 million eligible Americans either don’t apply for or don’t use their benefits each year, according to the Centers for Medicare & Medicaid Services. Many factors contribute to this staggering number, notes Letha Sgritta McDowell, an elder law attorney who practices at Hook Law Center in Virginia and North Carolina.

“It’s really about comprehending the rules,” explains McDowell, who also serves as president of the National Academy of Elder Law Attorneys (NAELA). “Many people don’t understand the intricacies of how public benefits work.”

Whether Medicaid and Medicare will help with your family member’s senior living costs depends on several factors, such as your loved one’s age, income, and required level of care. It also depends on communities themselves, as some accept Medicaid as a payment method, while others require private pay.


In this article:


What is Medicaid?

Medicaid is a state and federal program designed to provide health care coverage to vulnerable populations, or to people who might not otherwise have health insurance. It’s currently the largest source of health insurance in the U.S., covering low-income individuals and people with significant medical expenses.

Since Medicaid is a partnership between individual state governments and the federal government, the program’s coverage provided — as well as eligibility requirements — vary significantly based on where you live. Due to this complexity, it’s often best for seniors and their families to work with an elder law attorney, specifically one who focuses on Medicaid planning.

Who’s eligible for Medicaid?

Medicaid recipientsmust meet certain health or physical requirements in addition to income thresholds and asset limitations based on their state of residence and type of coverage requested. Though income requirements vary by state, they’re typically based on earnings beneath 133% of the poverty level. This means if the poverty line in your state is calculated at $13,000, your income would need to be less than $17,290 to qualify for Medicaid.

States can also deem individuals “medically needy,” meaning they exceed the standard income but have significant medical expenses. Similarly, several states have Medicaid “buy-in” programs. These allow some individuals with disabilities to have access to Medicaid coverage even if they exceed income requirements.

If your family member is planning to apply for Medicaid, it’s a good idea to contact your state medical assistance office for more details. Depending on where you live, Medicaid programs may be referred to as “auxiliary grant,” “elderly waiver,” or “frail elderly waiver” programs.

How to become eligible for Medicaid through Medicaid spend down

In many cases, older adults may have income above the Medicaid threshold yet still find themselves in need of public assistance due to high medical costs. Several states address this through “Medicaid spend down” programs, which allow seniors to reduce their countable income by subtracting medical expenses. By lowering their countable income, these individuals may become eligible for Medicaid.

For example, a senior might receive $2,000 a month in Social Security payments but live in a state that requires Medicaid recipients to have monthly income below $1,500. In a state with a Medicaid spend down program, they could qualify for Medicaid by spending $500 each month on medical expenses, including prescription drugs, doctor co-pays, and long-term care costs. It’s important to track and document all medical expenses if you’re considering a Medicaid spend down.

What is Medicare?

Medicare provides federal health insurance coverage to almost all Americans 65 and older and to people with end-stage renal disease. It has several separate components:

  • Part A, hospital insurance, which helps pay for inpatient care in a hospital or a skilled nursing facility, as well as some home health care and hospice care.
  • Part B, medical insurance, which helps pay for doctors’ services and many other medical services and supplies.
  • Part C, Medicare Advantage, which offers separate plans through private health care companies. It’s important to be aware that when enrolled in Medicare Advantage, the individual is no longer enrolled in Medicare Parts A or B.
  • Part D, prescription drug coverage, which helps pay for medications prescribed by seniors’ physicians or other specialists.

While most people don’t pay a premium for Part A, Medicare’s other forms of coverage come with monthly costs for seniors.

Who’s eligible for Medicare?

Medicare recipients must be age 65 or older, have a disability determined by the Social Security Administration, or have ALS or end-stage renal disease. Individuals receiving Social Security or Railroad Retirement Board benefits are also eligible, along with people who’ve received Social Security or Railroad Retirement Board disability benefits for at least two years previously. Kidney transplant patients and people undergoing kidney dialysis treatment are also eligible.

Though adults over 65 who have paid taxes for at least 10 years automatically receive Medicare Part A coverage, they must opt in and complete enrollment paperwork to receive Part B and Part D coverage. Seniors who enroll in Part C, also called a Medicare Advantage plan, will also have to select a plan, complete paperwork, and pay monthly costs, as well as forfeit their Medicare Part A coverage. The Social Security website is a resource that can help seniors review requirements and start the Medicare application process.

Public payment options for independent living

Does Medicare pay for independent living?

Seniors in independent living are usually healthy and active. They choose this care type for benefits like housekeeping, lawn maintenance, and social activities. Since Medicare covers only health care services, it doesn’t pay for independent living.

Does Medicaid pay for independent living?

Medicaid helps low-income and medically needy individuals access medical care. Because independent living doesn’t encompass medical services, Medicaid doesn’t cover this care type.

Public payment options for assisted living

Does Medicare pay for assisted living?

Generally, Medicare pays for short-term, intensive care for seniors who have experienced an injury or who are in the end-of-life stage, as determined by a doctor. In contrast, assisted living provides care to seniors who are largely independent but could benefit from assistance with activities of daily living (ADLs). Given this more limited range of care, Medicare doesn’t cover assisted living.

Does Medicaid pay for assisted living?

Some — but not all — states have Medicaid waiver programs that help cover the costs of assisted living. With a waiver, families and seniors can expect help with costs related to medical treatments and personal care services, reducing their overall bill. However, Medicaid often won’t cover the total price of room and board in an assisted living community.

In some states, Medicaid can be used to pay for the following:

  • Help with ADLs, like toileting, mobility, and dressing
  • Home health services, which may be provided in an assisted living community
  • Physical, occupational, or speech therapy
  • Medication management

Public payment options for memory care

Does Medicare cover memory care?

Medicare won’t pay for rent or board in memory care facilities. However, Medicare does cover many costs associated with dementia treatment, such as equipment and supplies like the following:

  • Mobility assistance. Seniors with dementia generally experience a loss of balance and coordination in the early and middle stages of the disease, and Medicare pays for implements like walkers and grab bars.
  • GPS trackers. Under some Medicare Advantage plans (Medicare Part C), families can receive cost assistance with GPS trackers, which are devices that help prevent the dangers of wandering and disorientation either in a community setting or at home.
  • Prescription medications. Though there’s no FDA-approved medication known to cure Alzheimer’s disease or other forms of dementia, Medicare Part D helps pay for medications that may stave off the condition’s progression.

Does Medicaid pay for memory care?

Though not all communities accept Medicaid, waivers in some states pay for 24-hour dementia care in skilled nursing communities. If a senior chooses to receive care in a memory care community rather than a nursing home, waivers typically don’t cover these costs.

For seniors who do choose to receive memory care in a skilled nursing home, waivers usually cover all costs associated with room and board. Under Medicaid policies, seniors must forfeit most of their available income — including Social Security checks — toward their care and can retain only a small monthly personal allowance. Allowance amounts differ by state but typically are less than $75.

Public payment options for nursing homes

Does Medicare pay for nursing homes?

“The number one misconception about Medicare is that it will pay for your long-term care,” says McDowell. “Medicare will only pay for a rehabilitative stay after an acute hospitalization.”

Seniors who need care in a skilled nursing facility due to an injury or period of acute illness can receive Medicare coverage to stay in a nursing home for up to 100 days after three nights in a hospital. In addition, the patient must either be making improvements in therapy or require skilled care to prevent a decline in their condition.

A stay in a nursing home comes with the following costs:

  • Older adults pay nothing for the first 20 days of a nursing home stay, with Medicare covering the entire bill. This covered nursing home stay is available to seniors after a three-night inpatient stay in a hospital.
  • Medicare pays for nearly all nursing home costs for days 21-100 of a nursing home stay, but seniors are responsible for a daily coinsurance. This coinsurance payment is approximately $170.50 per day. This is covered by most Medicare supplement plans.
  • After 100 days, Medicare will not pay any nursing home costs.

Medicare also pays for the entirety of hospice and palliative care in a skilled nursing community.

Does Medicaid pay for nursing homes?

Medicaid pays for long-term care in a nursing home for seniors who meet the program’s requirements. The requirements are both financial and non-financial and involve an examination of medical criteria, monthly income, countable assets, and gifts made within five years of applying for Medicaid. Once approved, seniors must pay a monthly co-insurance amount based on their income. Medicaid will then cover nearly all associated costs, including a senior’s room and health care services.

Public payment options for home care and home health care

Does Medicare pay for home care?

Medicare doesn’t pay for long-term home care costs or in-home 24-hour assistance. Similar to Medicare’s nursing home coverage, the program contributes to short-term home health care services. Medicare Part A and Part B entitle seniors to fewer than eight hours of care per day for a 21-day period. A doctor must prescribe this care and recommend a Medicare-certified agency to arrange and facilitate it.

Medicare primarily pays for treatments that help seniors recuperate from an injury or stroke, such as:

  • Physical therapy
  • Occupational therapy
  • Speech-language pathology services

Many families hire a home caregiver to give their loved one companionship or to reduce their at-home responsibilities, like chores and meal preparation. In these cases, Medicare can’t serve as a payment method.

Medicare doesn’t pay for these aspects of home care:

  • 24-hour supervision
  • Meal preparation or delivery
  • Daily tasks like personal shopping, cleaning, and laundry
  • Personal care services like bathing and toileting

Does Medicaid pay for home care?

Depending on the State Medicaid Waiver program, seniors may hire a caregiver from a Medicaid-approved agency using their Medicaid benefits. The senior must demonstrate a need for medical care equivalent to the level they would otherwise receive in a nursing home. Then the senior must meet financial eligibility requirements and be approved for this type of care.

In most states, Medicaid Home and Community-Based Services (HBCS) waivers provide financial assistance to seniors who require these services:

  • In-home medical care, including physical therapy
  • Assistance with ADLs
  • Help with cooking, cleaning, and laundry
  • Transportation
  • Assistance with medical devices

Low-income seniors who qualify can expect Medicaid to absorb nearly all the costs associated with these services.

How to choose a senior living facility that accepts Medicaid

Whether your family member currently has Medicaid coverage or thinks they may be eligible someday, public payment sources can significantly alter their senior living options. While many communities accept Medicaid, others don’t, making it crucial to verify this information upfront.

Consider the following key milestones when searching for senior living:

  • Contact your state Medicaid office. Representatives can typically connect families with long-term care communities that accept Medicaid benefits, as well as offer other resources and information.
  • Ask questions specifically related to public pay. Verify whether the community accepts Medicaid payments, find out how many beds or units are reserved for residents who receive Medicaid, and determine if there’s a waiting list. Plus, if it applies to your loved one, ask what happens if they aren’t eligible for Medicaid at move in but become eligible at a later date.
  • Schedule a virtual or in-person tour. Tours can help you gain insight into community life and allow you to compare different facility options.
  • Download A Place for Mom’s community touring checklist. This free resource suggests questions to ask and includes a convenient note-taking space for caregivers. It can help you compare communities based on your budget, care needs, observations, and preferences.
  • Get input from all decision makers. If your loved one is well enough to weigh in on their own care, ask for their opinion and perspective. Invite them to tour several communities, meet the staff, and ask questions. Similarly, if siblings or other relatives are involved, make sure everyone is on the same page about long-term care decisions.
  • Gather necessary documents and paperwork. Most communities will request a wide range of medical documents to ensure they can properly care for your parent. These typically include proof of diagnoses, medication lists, and doctors’ notes. If your loved one is in the hospital, ask their case manager to fax these documents to communities you’re considering. Otherwise, schedule a doctor’s appointment for your relative to complete this process.

Moving into a senior living community

After you’ve chosen the right community and determined availability, it’s time for your loved one to move in. The following tips can help make this process as smooth as possible:

  • Identify what moving day will look like. How many people will be involved in the moving day process? What items will you bring right away, and how will they fit into the new space? Are you planning on hiring a senior move manager? Considering these questions in advance can help you make a clear plan.
  • Bring essential admissions documents and paperwork. These documents include your loved one’s Medicare card, all secondary insurance cards, medical paperwork, and a list of emergency contacts. Additionally, bring any legal paperwork, including documentation of power of attorney, a living will, and any Do Not Resuscitate (DNR) orders.
  • Participate in discussions about your loved one’s care plan and next steps. Even though your relative is moving, you can still be involved. Ask about when care plan meetings will be and what to expect from staff communication.

Additional resources for navigating Medicare, Medicaid, and long-term care

Determining how Medicaid and Medicare help cover senior living can be a challenge for most seniors and their families. Because requirements vary from state to state, one-size-fits-all advice may not apply to each family’s unique situation. If seniors are eligible for other cost assistance, such as VA benefits, the process can be complicated further.

“Doing your own research and then talking to an expert is so critical,” urges McDowell. “In the same way a financial advisor or accountant would talk to someone about how to reduce their taxes, that’s how an elder law attorney would help someone decide the best option for their long-term care.”

Seniors and their families can use NAELA’s up-to-date database to find a qualified, local elder care attorney. Consider seeking an attorney who specializes in Medicare and Medicaid policies. Get answers to your Medicare questions by calling 1-800-MEDICARE (1-800-633-4227), or by contacting the Centers for Medicare & Medicaid Services office in your region.

Experts in your state or territory can help answer questions about specific Medicaid policies and requirements. Find your state contact below:

Sources:

Administration for Community Living. Medicaid ‘Buy-in’ Q&A.

American Hospital Association. Medicaid.

Centers for Medicaid & Medicare Services. Eligibility.

Centers for Medicaid & Medicare Services. Home Health Services.

Centers for Medicaid & Medicare Services. Medicaid Spenddown & Extra Help.

Centers for Medicaid & Medicare Services. Medicare Coverage of Skilled Nursing Facility Care.

Centers for Medicaid & Medicare Services. What’s Medicare?

Centers for Medicaid & Medicare Services. Medicaid expansion and what it means for you.

Centers for Medicaid & Medicare Services. Home health services.

Centers for Medicaid & Medicare Services. Parts of Medicare.

Centers for Medicaid & Medicare Services. Skilled nursing facility (SNF) care.

The information contained in this article is for informational purposes only and is not intended to constitute medical, legal, or financial advice or to create a professional relationship between A Place for Mom and the reader. Always seek the advice of your health care provider, attorney, or financial advisor with respect to any particular matter, and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not endorse the contents of the third-party sites.

Author
Liz Dupont

Related Articles