The American Council on Aging offers a free Medicaid Eligibility Test. It is not an application, nor is it bidding. However, it provides a quick and simple answer to understand Medicaid eligibility. Learn more.
What is Medicaid?
Prior to a discussion of Medicaid’s benefits for persons with Alzheimer’s or other forms of dementia, it is helpful to provide an explanation about what the Medicaid program is. Persons who fully understand Medicaid and its sub-programs may want to skip this section of the article. Medicaid is health insurance for low-income Americans (more on Medicaid eligibility follows). Medicaid should not be confused with Medicare. Medicare is health insurance for all Americans, aged 65+ regardless of their income. Medicaid, unlike Medicare, pays for many non-medical services that persons with Alzheimer’s or other dementias require.
Critical to understanding Medicaid, is understanding the difference between institutional Medicaid and Home and Community Based Services (HCBS). Institutional Medicaid is provided in nursing homes. Home and Community Based Services, as implied by the name, are Medicaid services provided to individuals living at home or “in the community”. The phrase in the community typically refers to assisted living residences or assisted living specifically designed for persons with dementia called “Memory Care”.
Institutional / nursing home Medicaid is an entitlement in all 50 US states, meaning should the individual be eligible for Medicaid, the state must pay for their nursing home care. HCBS (Medicaid services at home) in most states are not entitlements, meaning a person can be eligible for the program but may be placed on a wait list for services. Wait lists in some states can be several years long (although, admittedly these are extreme cases).
Note that many states have their own names for their Medicaid program. For example, in California it is called Medi-Cal and in Massachusetts, MassHealth. Also be aware that HCBS are sometimes called Medicaid Waivers.
Medicaid Benefits for Alzheimer’s & Dementia by Location
Rather than thinking of Medicaid’s home care benefits, one should think more broadly because Medicaid offers much more assistance in the home, than just health care. First, we’ll discuss the range of benefits, and then how the Medicaid beneficiary would get access to these benefits. IMPORTANT – each state offers slightly different benefits, this article is written in generalized terms, not state specifically.
Beyond home health care, most critical for persons with dementia or Alzheimer’s, is personal care or assistance with activities of daily living such as bathing, grooming and eating, which fortunately, Medicaid covers. Most states also offer assistance with the Instrumental Activities of Daily Living such as medication management, shopping for essentials and preparing food. Chores services, typically for home maintenance are sometimes a benefit as well. Medical alert services (called PERS in formal Medicaid language) are frequently covered by Medicaid. However, Medicaid will typically pay for the most basic service which may or may not include GPS tracking (to prevent wandering).
Medicaid recipients can access in-home support services either through their state’s regular Medicaid program or through a HCBS Medicaid Waiver. Generally, a state’s regular Medicaid program will have more restrictive financial eligibility requirements than their HCBS Waivers. However, regular Medicaid benefits are entitlements while Waivers have limited enrollments and sometimes have waiting lists.
In Adult Day Care
Adult day care is a formal supervision during day-time hours, typically only on weekdays, in a structured, dedicated environment. Meals, activities and often medication management are included as well as personal care. However, for persons with dementia, regular adult day care may not provide enough structure. Specialized adult day care centers, sometimes called Alzheimer’s Day Treatment Centers may be necessary. Employees of these organizations will have received additional training for dementia-related behavioral challenges and security is increased to preventing wandering. In nearly all states, Medicaid will pay for adult day care. Many states offer adult day care both as a benefit of their regular Medicaid programs and as a HCBS Waiver benefit.
In Assisted Living / Memory Care
For most persons with Alzheimer’s or dementia, normal assisted living communities cannot provide adequate support. Instead, these communities have “memory care” wings (often a secured floor) or there are also standalone memory care residences. In almost every state Medicaid will pay from some care in assisted living / memory care residences. However, an important distinction must be made. Medicaid, by law, is prohibited from paying for the cost of room and board or “rent” for its beneficiaries who reside in assisted living residences. Medicaid can pay for their cost of care in those residences. In very ballpark terms, half of the monthly cost of memory care goes toward “rent” and the other half towards the care the residents receive.
In most states, care in assisted living / memory care is covered by a Medicaid waiver. Some states also offer personal care assistance through their regular Medicaid program. In these states, the law does not put restrictions on the location in which personal care can be provided. To clarify, the care recipient would be receiving “personal care” but instead of living at home, they would receive that care in their primary place of residence which happens to be a memory care residence.
In Adult Foster Care
Adult foster care is similar to assisted living in that the person with Alzheimer’s / dementia resides in the location full-time. However, instead of their being 10-100 residents as there is in a memory care residence, there may be only 1-4 residents in the home. Homes are often the homes of private individuals who “take in” persons with dementia and receive compensation from Medicaid for doing so. Medicaid’s coverage of adult foster care is very difficult to generalized. In a few states, Medicaid outright has programs that pay for adult foster care. However, many states don’t have clear laws defining their Medicaid policy for adult foster care or don’t have clear laws that distinguish what adult foster care is vs. assisted living.
In Nursing Homes
In all 50 states and Washington D.C., Medicaid will cover nursing home care for persons with Alzheimer’s or other dementias and Medicaid coverage is an entitlement. Unlike, memory care communities, states are not prohibited from covering the cost of room and board in nursing homes. Medicaid will pay for the individual’s room, meals and their care. However, do all nursing homes accept Medicaid patients? No, not every nursing home will accept persons on Medicaid. There are private pay only nursing homes. Fortunately, the vast majority of nursing homes do accept Medicaid. In California, for example, it is estimated the 90% of nursing homes accept Medicaid. Complicating matters is the fact that nursing homes may only accept a certain number of Medicaid beneficiaries. If one enters a nursing home as a private payer, and then becomes Medicaid eligible, the nursing home, by law, must continue to house and provide care for that individual.
Medicaid Eligibility / Qualifying
Medicaid is a program designed for persons with low income and limited financial assets. The actual income and assets limits are determined by each state separately. Furthermore, the income and asset requirements vary based on for which Medicaid program one is applying, their marital status and the criteria change annually. To say Medicaid eligibility is complicated, is an understatement. A quick, easy, free but non-binding Medicaid eligibility test is available here, should the reader not want to sort through the details which follow.
Single Applicants – in most states, single applicants are permitted up to approximately $2,000 in monthly income. However, those wishing to utilize nursing home Medicaid may be subject to lower income limits. Applicants are also permitted to have up to $2,000 in “countable assets”. Countable assets exclude one’s home provided they live in their home and their value of their home equity does not exceed $500,000 – $800,000 (depending on their state).
Married Applicants (with one spouse applying) – in most states, married applicants are permitted considerably higher income and assets than single applicants. The rules allow this because the “wellspouse” (non-applicant spouse) needs adequate funds to continue to live on their own. In this mixed status situation, the couple’s incomes are evaluated independently. Largely, the same income rules apply as described above for a single applicant. However, their assets are not evaluated separately. Again, this is state dependent, in most states the non-applicant spouse is permitted up to between $60,000 – $120,000 in countable assets not including the value of their home, vehicle or other personal affects.
Married Applicants (with both spouses applying) – in most states, married couples must have joint income less than $4,000 and countable assets valued at less than $3,000. However, there are many exceptions to these rules and Medicaid planning professionals have strategies to help couples gain eligibility who do not immediately qualify but cannot afford their care costs.
Persons or couples who exceed these limits may still become Medicaid eligible by working with a Medicaid Planner. Read more about the pros and cons of doing so here.