Does Medicaid Pay for Memory Care? When, Where & How Much
Summary
Medicaid pays for memory care but does so inconsistently across the 50 states. The eligibility requirements are very restrictive and change by state. Furthermore, application challenges, waiting-lists and a lack of providers make the reality of actually getting Medicaid to pay difficult but not impossible.
What is Medicaid?
Medicaid is a state and federally-funded health insurance program that each state manages with the intention of providing benefits to qualifying low-income individuals. There are strict financial and medical requirements to qualify, and those requirements vary state by state. It is important to understand there are many different types of Medicaid programs and only 3 of which are relevant to seniors with Alzheimer’s / dementia seeking memory care.
Nursing Home Medicaid – which covers residential long-term care but does not pay for memory care
Home and Community Based Services (HCBS) Medicaid Waivers – which can pay for memory care
Aged, Blind and / or Disabled (ABD) Medicaid – which can be used in memory care residences
What is Memory Care?
Memory care is residential care designed specifically for persons with Alzheimer’s or other dementias. It is very much like assisted living however these communities provide extra care, support, and supervision for persons with neurological conditions affecting their memory. On the continuum of residential care, memory care provides a higher level of care than assisted living but less than a nursing home.
Most commonly, memory care is found in a secured wing or floor of an assisted living residence but there are also stand-alone residences that offer a more home-like setting. There are pros and cons to each setting. In either case, they provide room and board, help with activities of daily living, activities that encourage socialization, and medication management. Staff members receive extra training in how to best care for dementia patients.
Memory care regulations change significantly from state to state and therefore the services provided, staffing ratios and costs also change. See state-specific memory care regulations and costs.
While memory care may sound like a nursing home, it is in fact a very different living experience permitting residents a significantly better quality of life. While some memory care residences can offer a nursing home level of care, most do not and many residents will eventually need to move on from memory care into a nursing home. If your loved one has a feeding tube, is on an IV, needs extreme wound care, or needs round-the-clock nursing care (as opposed to merely supervision) memory care will not be able to meet their needs.
Each state has its admission requirements. Generally speaking, one can be admitted without an Alzheimer’s or dementia diagnosis as long as they demonstrate a need for services. A patient needs to show:
– Signs of dementia
– That placing them in a memory care residence would be beneficial
– The memory care community can meet their needs
Staffing in memory care has smaller ratios of patients to caregivers than traditional assisted living. The staff have also undergone mandatory training that gives them the tools needed to best care for your loved one. Dementia specific training enables caregivers the best techniques for care and communication. By learning different methods of interaction, caregivers can see when patients are distressed to help them avoid being in situations that give them anxiety. When the staff has a more personalized relationship with patients, they learn triggers and behavior changes so your loved one is best supported and cared for.
Just like the specialized training in memory care for their staff, residences also have specialized characteristics. Dementia-friendly features are designed for patients’ safety while improving their quality of life. This can but does not always include special locks to prevent wandering, a secure outdoor area so patients can safely be outside, bright paint colors, circular hallways without dead ends, areas for socialization, and location monitoring devices.
While there is no federal guideline as to when a memory care community can evict someone, in general, a person cannot stay at a residence that cannot care for them. Each residence has its own set of rules and it is important to understand the criteria for eviction before signing a move-in contract. That means that when your loved one’s need for care has exceeded what the residence can provide, your loved one can be evicted. For example, if the memory care community cannot care for someone who is non-ambulatory and your loved one loses the ability to walk by themselves, the residence can evict them.
How & When Medicaid Pays for Memory Care
Of the three types of Medicaid program relevant to seniors seeking memory care, two will actually pay for some of the cost of care in memory care residences. It is worth knowing that traditional Nursing Home Medicaid does not pay for memory care. However, Medicaid Waivers and Aged, Blind and Disabled Medicaid will contribute to the cost.
HCBS Waivers
Also referred to as Home and Community Based Services or Medicaid Waivers, these are programs designed as alternatives to nursing home care. For the most part, Medicaid Waivers have the same financial and functional eligibility requirements as Nursing Home Medicaid but their benefits are intended to keep persons out of nursing homes. Many benefits are intended to keep people living in their homes, but homes can be defined loosely to include assisted living / memory care residences.
In those residences, Medicaid can pay for or provide a wide range of care support including but not limited to:
– Assistance with activities of daily living (like eating, bathing, and getting dressed)
– Assistance with instrumental activities of daily living (like housecleaning and laundry)
– Transportation to medical appointments
– Medication management
– Meals
– Personal Emergency Response System (medical alert service)
– Nursing services
Some states have very specifically designed Waivers for memory care / assisted living such as California’s Medi-Cal Assisted Living Waiver and Arkansas’ Living Choices Assisted Living Waiver. Other states simply list assisted living / memory care as a line item of different benefits available under that Waiver. Still other states (and this is a very important distinction) offer Consumer-Directed Care under their Waivers.
Consumer-Directed Care (also called Self-Directed or Participant-Directed Care) allows the beneficiary a certain amount of flexibility in how they want to allocate their care dollars. The beneficiary can choose their caregivers and those caregivers can be the employees of a memory care residence. Or they can choose to live in a memory care residence and pay outside (non-employee) caregivers to come in and provide them with care (if their specific memory care residence allows for this).
As may be evident to the reader, some research and creativity may be required to receive memory care services under a HCBS Medicaid Waiver. However, it is not impossible but does require patience. See our list of states waivers that can be used in memory care.
Medicaid Waivers are not entitlements. Wait-lists are common. This is different from Nursing Home Medicaid and the programs described in the following section under ABD Medicaid, both of which are entitlements meaning should the individual qualify, they must be immediately enrolled in the program.
ABD Medicaid
ABD Medicaid can best be thought of as Regular Medicaid, but for persons 65+. It is not so much a program as various benefits for which the individual qualifies specifically after they have enrolled in their state’s ABD Medicaid program. It should be noted that ABD Medicaid is a name used by many but not all states. Some states call their program Elderly & Disabled (E&D) Medicaid or various other names.
ABD Medicaid programs offer benefits such as Assistance with Activities of Daily Living or Medication Management and those benefits can be provided to persons in their homes even if those “homes” are memory care residences. Care can be provided by Medicaid-approved caregivers or beneficiaries can be given a budget and permitted to choose their own caregivers (which can be memory care staff provided the memory care residence agrees to accept the payment rate offered by Medicaid). Alternatively, again if permitted by the memory care residence, outside caregivers (persons not employed by the memory care residence) who are willing to accept the Medicaid payment rate can come into the memory care residence and provide the Medicaid beneficiary with care.
In almost all states, ABD Medicaid has more restrictive financial eligibility criteria than Nursing Home Medicaid or Medicaid Waivers. See state-by-state financial eligibility criteria here or more simply test a Medicaid Eligibility Test.
See a list of ABD Medicaid programs that can be in memory care residences.
How Much Does Medicaid Pay?
It is hard to generalize how much Medicaid pays because every state is different and every program is different. It is vital to remember that Medicaid never pays for the room and board of your loved one in memory care, which is roughly half of the monthly cost.
Depending on the program, payments might be made directly to the memory care residence, to the beneficiary or to outside caregivers who provide care in the memory care residence. In many cases, a financial intermediary is used instead of payments being made directly to a beneficiary. For example, if the beneficiary has cognitive challenges as is usually the case with memory care residents, they will not be given the money directly.
Medicaid Eligibility Requirements
Medicaid is federal and state health insurance for people with limited financial means. While there is joint funding, each state runs its own Medicaid with different sub-programs that provide specialized benefits. This gives each state the autonomy to have programs that can provide help for children, pregnant women, people who are disabled, or the elderly among other target groups. Medicaid long term care is meant for people with both limited financial means and a medical need. Depending upon what type of Medicaid program you are applying for, different financial requirements must be met and these can change state by state. Furthermore, some states offer “alternative pathways” to eligibility for persons whose finances exceed the limits.
Needless to say, eligibility is very complicated. For the purpose of simplification, we will break it down to income, asset and medical requirements. Complete eligibility details by state for 2023 can be found here.
Eligibility by type of program is available here.
Financial Criteria
Income
Generally speaking, most states require a single applicant to have less than $2,742 in monthly income in 2023 to be eligible for a Medicaid Waiver. For ABD Medicaid, single applicants are permitted either $914 per month in income (100% of the SSI Federal Benefit Rate) or $1,132.50 in monthly income (which is 100% of the Federal Poverty Level). Again, some states use different numbers for these limits.
These numbers rise considerably if the applicant is married and their spouse is not seeking Medicaid as well. More on Spousal Rules.
Assets
In general, most states allow a single applicant to have countable assets valued at between $2,000 – $4,000. A few states, notably California and New York have much higher asset limits. Many assets, including one’s home are not counted towards the asset limit (with lots of exceptions). As with income, married applicants with a non-applicant spouse are permitted are much higher assets.
Functional Criteria
To qualify for Medicaid, patients must show a functional need for the program. Just because your loved one has Alzheimer’s or dementia does not make them automatically eligible for Medicaid. A functional need means that there is a medical need for the individual to be enrolled in a Medicaid program. Again, guidelines for each program are different and also change state by state.
The strictest requirement is for those trying to qualify for an HCBS Medicaid Waiver, where a patient must show a need for a nursing home level of care. Each state has its definition of what the nursing home level of care is. When trying to determine nursing home level care, the patient’s level of care is based on:
– Not being able to complete between 2 to 4 activities of daily living (depending upon the state in which you reside). Activities of daily living include bathing, dressing, eating, mobility, and going to the bathroom.
– Medical needs that require nursing care such as IVs, catheters, injections, or severe wound care.
– Mental (neurological) impairment. Persons with Alzheimer’s and dementia, cannot make safe decisions for themselves as the disease progresses and cannot live independently.
– Behavior issues that prevent living safely and independently. For example, patients with dementia tend to wander and get lost.
In comparison, Medicaid’s program for the Aged, Blind, and Disabled can have medical requirements that are not as strict and enable your loved one to be more independent and still qualify for care benefits.
Finding Memory Care that Accepts Medicaid
Finding a memory care residence that accepts Medicaid can be challenging. What can be even more challenging is that while many communities are certified to receive benefits from Medicaid that does not mean that they will accept patients wanting to use its coverage.
There is no national database of memory care residences that accept Medicaid as there is for nursing homes. Some states have searchable databases, but these are not easy to find or use. Furthermore, just because a memory care residence does not accept Medicaid does not mean they won’t allow for outside caregivers who are paid by Medicaid.
In short, a search is going to be manual process that requires calling each residence and asking their policies.
You can, however, use Referral Services to generate a list of memory care residences in your area. These services are free to use and very helpful as a starting point. One should not, however, expect the referral service to answer Medicaid-related questions. In fact, you should refrain from mentioning Medicaid as the referral service will likely de-prioritize you should you do so.
Remember, finding a memory care home is not a fast process and finding one in which you can use Medicaid is even slower. Starting early will give your loved one the most amount of input for their care and where they want to live.