Medicare vs. Medicaid: Which One Pays for Assisted Living?

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When it comes to long-term care, many seniors may consider Medicaid and Medicare. Designed to provide financial assistance for seniors, both feature different eligibility requirements and coverage. It’s crucial to understand the ins and outs of Medicare and Medicaid—especially when it comes to assisted living. Grab some paper, put on your reading glasses, and get ready to take some notes. Here’s what you need to know.

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Medicaid Assisted Living Coverage

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Medicaid is a joint federal and state program that provides healthcare coverage for low-income individuals, including older adults. This program covers a wide range of healthcare services, including some long-term care options. Sadly, Medicare doesn’t cover the room and board part of assisted living costs. Some states offer Medicaid waiver programs to help offset the cost of assisted living. These waivers are called Home and Community-Based Services (HCBS) Medicaid waivers or 1915(c) Medicaid waivers. Fortunately, these waivers cover some long-term care services, from adult day care to assisted living. 1915 Medicaid waivers may many assisted living services, including:

Eating
Grooming
Bathing
Dressing
Toileting
Medication management
Transportation services
Housekeeping and laundry

Remember—Medicaid waivers vary by state. To find out if your state offers a waiver, click here!

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Does Medicaid Cover Respite Care?

Respite care is any service or support that provides short-term relief to caregivers. Respite allows those who regularly care for a loved one to take time away from their usual duties. Many caregivers use respite when they need to work, go on vacation, or just want a break. So, does Medicaid cover respite care? The answer is a little complicated. With Medicaid, rules differ from state to state. Some states may provide coverage through a waiver program, while others may not provide coverage at all.

To find out if Medicaid coverage for respite care is available in your state, visit the Medicaid HCBS program page.

Medicare Assisted Living Coverage

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Unlike Medicaid, Medicare is a federal program that provides healthcare coverage for senior adults aged 65 and older. Sadly, it offers limited coverage for assisted living services, as this falls under the “custodial care” umbrella. Custodial care refers to medical and non-medical care for people with a chronic illness or disability. Original Medicare doesn’t cover the cost of long-term assisted living care. It consists of two parts: Part A (hospital insurance) and Part B (medical insurance).

What about Medicare Advantage plans? Do they cover assisted living? Sadly, no. Medicare Advantage plans cover everything included under Parts A and B, meaning they don’t cover assisted living costs. Certain Part C plans may cover services similar to those offered by assisted living facilities, such as help with activities of daily living, meal delivery, and medical transportation services.

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Some alternative ways to pay for assisted living may include:

Veterans’ benefits: Eligible veterans might be able to receive assisted living benefits through the Veterans Administration (VA).
Reverse mortgages: Reverse mortgages are a special type of loan available to homeowners aged 62 and older. You can use the funds you receive to cover long-term care costs. However, it’s important to note that you must repay the mortgage when you die or move from the home for 12 consecutive months.
Long-term care insurance: A long-term care insurance policy can help cover assisted living costs, partially or fully. However, coverage details vary by policy, so carefully review terms and benefit limits!
Social Security and pensions: Social Security benefits and pensions can be a valuable source of income that can help offset long-term care costs.
State and local assistance programs: Certain states or local organizations might offer financial assistance programs specifically designed for seniors or those with disabilities. Research these programs in your area to see if you qualify.

Does Medicare Cover Respite Care?

Medicare Part A only covers respite care if it’s a part of the recipient’s hospice care. To quality for respite care, the recipient must first meet the requirements for hospice care. Respite care in this context provides short-term inpatient care in a skilled nursing facility or hospital when the usual caregiver needs assistance or a break. The benefits of hospice respite care include:

Providing a temporary break for caregivers
Allowing caregivers to attend to personal needs or emergencies
Providing the terminally ill patient with ongoing hospice care

Respite care through Medicare is considered short-term and limited to five consecutive days per respite care stay. It can be repeated multiple times, if needed for the patient’s care plan. If you’re not eligible for Medicare-covered respite care, Medicare suggests seeking private insurance coverage or assistance from local community resources and programs designed to support caregivers and individuals who require ongoing care. Additionally, your local Area Agency on Aging (AAA) may be able to provide resources and insight!

Questions to Consider

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As you consider long-term care options, you may ponder Medicaid and Medicare benefits for assisted living services. Specifically, how do you know which one is right for you and your circumstances? To make the best possible decision, you’ll need to ask yourself some tough questions. Here are a few to consider:

Does Medicare cover nursing home or assisted living care?
Does Medicare pay for assisted living beyond short-term rehabilitation?
What are the eligibility requirements for Medicaid and Medicare?
What are the differences between Medicaid and Medicare?
Can I receive Medicaid and Medicare coverage simultaneously?
What services are covered under Medicaid and Medicare?

What if I’m not eligible for either?

Some people may not be eligible for Medicaid or Medicare coverage of assisted living. When this happens, you may need to pay out-of-pocket or consider other funding sources. Some facilities offer payment plans or financing options to make their services more affordable. Additionally, you may be able to use a reverse mortgage, life insurance policy, or annuity to fund your long-term care expenses.

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It’s important to plan ahead for your long-term care needs. Luckily, various planning tools and strategies can help you protect your assets and ensure you have access to quality care when you need it. For example, long-term care insurance can help cover the cost of assisted living and other long-term care services, while also preserving your assets. Always consider consulting with a professional who specializes in senior living and care, such as a financial planner, elder law attorney, or geriatric care manager. Not only can they help you understand your options, but they can help you make an informed decision for your unique situation!