Does Medicaid Cover Memory Care?

Medicaid may cover memory care services in a memory care community, assisted living community, or nursing home. The services Medicaid will cover, the amount it will pay, and how it will pay for the care all vary greatly by state and by type of community.

Medicaid doesn’t cover the cost of room and board in memory care or assisted living facilities. However, Medicaid may cover some memory care services if your loved one has the appropriate waiver and is receiving essential support in a memory care facility that accepts Medicaid.

Seniors can receive dementia care through a dedicated memory care community, or they can opt for specialized dementia care in addition to the basic services provided at the assisted living community or nursing home they live in. We’ll go over the differences between each type of senior living community and explore how Medicaid waivers can help your loved one pay for the memory care services they need.

Some memory care communities accept Medicaid, but the community must be licensed as a Medicaid-certified facility. While it’s possible to find a dedicated, Medicaid-approved memory care community, it’s fairly uncommon.

Each state licenses and certifies memory care facilities differently. Because each state’s Medicaid program is unique, finding an approved community in your loved one’s state may not be possible. In many cases, memory care services are offered by an assisted living community or a nursing home. Medicaid pays these types of communities differently, which we’ll discuss in more detail below.

If your loved one still wishes to live in a specially designed memory care community, they may need to apply for Home and Community Based Services (HCBS) waivers to cover the cost.

Read related article:Memory Care vs. In-Home Care for Dementia: What’s the Difference?

Let our care assessment guide you

Medicaid won’t cover the entire cost of assisted living or the memory care services it provides. However, it might pay for some of the cost of assisted living services through HCBS waivers. In general, the cost of your loved one’s room and board won’t be covered, but certain care services provided within the facility will be.

Assisted living may be a good care option for a loved one in the early stages of Alzheimer’s or another form of dementia. Assisted living offers services helpful to someone with memory loss, such as medication reminders and assistance with daily tasks like bathing and grooming. However, as dementia progresses, you may find that caregivers in an assisted living community lack the specialized training that you would find from caregivers in a memory care community.

Yes, Medicaid covers the cost of memory care services in a nursing home because nursing homes are considered institutional care communities. Institutional care is an entitlement designated by Medicaid, meaning this type of care will always be provided to Medicaid recipients in all 50 states.

However, it’s important to note that seniors must need skilled nursing care in addition to memory care to qualify for coverage. This means your loved one would likely need help with several activities of daily living as well as medication administration, wound care, or other specialized services. Each state has its own guidelines for determining whether a senior needs the level of care provided in a nursing home. Intellectual disabilities may also qualify someone for this level of care.^[01]

If your loved one does qualify for a Medicaid-sponsored nursing home, Medicaid will likely pay for room and board there.^[02]

Both memory care communities and nursing homes offer 24-hour supervision for seniors, but you may not find the specialized memory care supports that your loved one needs in a nursing home. When exploring nursing home options, be sure to request information on what specific memory care services are offered for residents with dementia.

Because Medicaid is jointly administered by federal and state governments, what’s covered and how it gets paid out to beneficiaries and care communities will vary. If a community is classified as providing institutional care, Medicaid will pay the facility directly.

The following benefits are mandatory under Medicaid:^[03]

• Inpatient and outpatient hospital services
• Nursing facility services
• Home health services
• Physician services
• Federally qualified health center services

The following are considered optional benefits:^[03]

• Private duty nursing services
• Personal care, such as assistance with activities of daily living
• Occupational therapy
• State plan home- and community-based services
• Physical therapy

Your loved one’s care needs, their eligibility, and the HCBS waiver programs in their state affect how much Medicaid will pay for memory care. Medicaid’s waiver programs are designed to enable eligible individuals in need of memory care to remain in their home or local community without having to move to institutions or other isolated settings.

Waivers vary greatly across states, so it’s important to check with your state agency to see what waiver programs are offered. It’s also important to understand that even if a person qualifies for Medicaid, they may not have access to a waiver. Each state handles their waiver program differently, offering different types and amounts of waivers. Some states have a limited number of waivers and may have waiting lists that are years long.

Depending on your state, HCBS waivers may cover the following services:^[04]

• Homemaker and home health aides
• Case management and caregiver training
• Assistance with activities of daily living (ADLs) and incidental activities of daily living (IADLs)
• Skilled nursing
• Respite care
• Adult day health services

Talk with a Senior Living Advisor

A number of different programs fall under the general umbrella of Medicaid. Therefore, individual eligibility will depend on what type of Medicaid program your loved one has applied for.

To be eligible for basic Medicaid, an individual needs to fall under an income threshold. The income limit is determined using their modified adjusted gross income (MAGI) as a percentage of the federal poverty level (FPL). In 2023, the FPL for the 48 continental states and the District of Columbia is $14,580 annually for an individual, or $19,720 for a couple.^[05]

However, if your loved one has special needs or certain disabilities, or if they require care in a nursing home or assisted living facility, then they might be able to make more than the set amount and still qualify for Medicaid. You can view their state’s information, factoring in household size, in the 2023 poverty guidelines spreadsheet.

In addition to income, there’s a limit on an applicant’s total assets. This also varies by state and by program.

Eligibility can be determined in several ways:

• Seniors receiving Supplemental Security Income (SSI) from the Social Security Administration are prequalified for Medicare, as this is a mandatory eligibility group.^[06]
• Seniors purchasing health insurance through the Health Insurance Marketplace® — a database of state organizations selling insurance plans that are compliant with the Affordable Care Act (ACA) — can determine eligibility by answering income-related questions during the application process.
• Seniors can also apply directly to Medicaid by contacting their state’s department of health.

Because Medicaid is based on financial need, you may be asked to provide the following documents:

• Bank statements
• Medical expense records
• Information about investments or savings
• Information about property or other assets

If your loved one doesn’t meet the income threshold but has significant medical expenses, they may be able to participate in a “medically needy program” if their state offers it. This allows individuals to spend down their excess income on medical expenses not covered by insurance in order to qualify for Medicaid.^[06]

Read related article:Understanding the Medicaid Look-Back Period: 14 Key Questions, Answered

Medicaid covers many aspects of memory care, but your loved one may face hurdles during the application process. You might find out that their assets are too high, or they might be on a Medicaid waiver waitlist.

Keep in mind that other memory care payment options may be available. These could include life insurance policies, veterans benefits, Medicare, or long-term care insurance. Cash and counsel programs and spending down assets can also help someone become eligible for Medicaid.

However, if you’re already looking for a home care agency or a memory care facility, connect with a Senior Living Advisor at A Place for Mom for tailored, local advice. Our experts can guide you toward local resources and navigate the process of finding your loved one a senior living community that’s a great fit.