Medicaid in an Assisted Living Facility? Think again!

You’ve been looking at assisted living facilities for Mom, who simply can’t be left home alone anymore and who cannot afford round the clock in-home care.

The admissions people at the assisted living facility have asked. “Are you going to be applying for Medicaid?” They’re curious. They want to be paid. It is also the wrong question to ask.

The name of the program is State/County Special Assistance for Adults. Call it “Special Assistance.” Now burn this into a plaque somewhere: “Special Assistance is NOT Medicaid.” The rules can be very different in a few critical areas.

Clients are constantly confused by this (as are many workers in assisted living facilities who should know better). You need to know the differences if someone you care for is in an assisted living facility.

First, a bit of background.

Levels of Care

Do not confuse an assisted living facility or adult care home with a skilled nursing facility. They are two different facilities with different rules and different programs.

A skilled nursing facility (what most of us call a “nursing home”) is a place for folks who are (usually) nonambulatory and with some chronic medical condition that requires skilled care on a daily basis. Think of it as a “step down” from a hospital meant for longer term stays. In the industry we call these “SNFs” (skilled nursing facilities).

Do not confuse these facilities with assisted living facilities. An assisted living facility is a facility for frail individuals who need assistance with a number of what we call activities of daily living (ADLs). Think assistance with bathing and toileting, mobility, personal hygiene, feeding. In the industry we call these ALFs (assisted living facilities).

To add to the confusion, some ALFs have special units usually called “Memory Care” or some similar variation (the bureaucratic term is “special care unit” or “SCU”). A special care unit is a separate area of an ALF with locked doors and a higher level of supervision for residents with various forms of dementia. Care in a SCU is NOT skilled nursing. It is still part of an ALF.

Paying for It

Generally, SNFs are charging around $10,000 a month. As we’ll discuss in a moment, Medicaid will pay for most care in most SNFs for eligible individuals. At 10 grand a month, most folks are keenly interested in whether Mom will qualify for Medicaid. But Mom is in an assisted living facility, so forget about it. If you want to read about Medicaid in a skilled nursing home, read North Carolina Medicaid Nursing Home Rules: The English Translation.

Generally, ALFs run around $3,500 to $4,000 a month for the general areas and perhaps $6,000 to $8,000 for a SCU or Memory Care Unit (those locks and extra supervision get expensive). Medicaid does NOT pay for ALF room and board and most incidental services. They simply aren’t considered “medical.” That’s where Special Assistance comes in.

If Mom is in an assisted living facility and IF she qualifies for SA, there will be a cap on how much they can charge for room and board (basically her income plus whatever the state pays them). Also, if Mom qualifies for SA, she MIGHT qualify to receive some additional personal care services paid for by Medicaid.

Did I just say MEDICAID!? Yes, but it is not the same as nursing home Medicaid. In this case it won’t be very much – perhaps a few hundred or a thousand bucks. Plus, unlike the SNF which has to be happy with the Medicaid payment as complete payment, the ALF might ask for a little bit extra from the family. But at least they aren’t paying “full freight.”

Special Assistance Background

Did I already write that Special Assistance is NOT Medicaid? Special Assistance actually borrows most of the rules that apply to the federal Social Security Supplemental Security Income (SSI) program. There are some significant differences from Medicaid.

Special Assistance Transfer Rules

SA has transfer rules, as does Medicaid. But Medicaid looks at any transfer made within 5 years of applying, divides the value of the transfer by $6,810, and uses that number to establish a penalty period in months that Medicaid will not pay for the SNF . . . beginning when the person is finally in the SNF and otherwise eligible for Medicaid.

SA looks at any transfer made within 3 years. The value of the transfer is divided by $2,000, and the result is used to calculate a number of months the individual is ineligible for SA. Unlike Medicaid, the transfer penalty begins the first day of the month following the transfer.

Special Assistance Asset Rules

These are very similar to Medicaid. A $2,000 countable asset cap. Some differences in real property rules.

A huge difference from Medicaid: SA does not count assets in the name of a spouse! If Mom qualifies for SA, Dad could be a millionaire.

Special Assistance Income Rules

This is VERY different from Medicaid and causes, perhaps, the most confusion. Under Medicaid, if income is less than the SNF’s private pay rate, there is no problem. Most of my clients do not have income exceeding seven or eight thou a month.

Under SA, when qualifying for the general area of an ALF (not the SCU) the gross income cap is just $1,247.50 a month. That’s GROSS income. Count Social Security BEFORE deductions for Medicare or other insurance. Count all other income from any source (well, except VA benefits . . . but that’s another story). If income is a penny over $1,247.50, then forget about general SA.

However, if Mom has dementia and needs to be in the Memory Care unit, the cap is $1,580.50. That helps some, I guess.

Here is how crazy the rules are. Remember Mom with millionaire Dad? She is drawing just $500 a month Social Security. All assets are transferred to Dad. SA only looks at Mom. She is qualified for SA.

Now think of Mom, who is widowed. She has just a few thousand dollars in countable assets. Her gross income is $1,248. Too bad. She doesn’t qualify. After years of working around this issue, I still have trouble accepting it.

Estate Recovery

SA has none! Estate recovery is a Medicaid issue. Did I already write that Special Assistance is NOT Medicaid?
Now, be careful, if Mom was on SA and managed to receive a few personal care services paid by Medicaid there might be estate recovery when she dies – but we’re talking perhaps a few hundred dollars a month.

I hope this helps clear up some confusion. Now you can amaze them at the assisted living facility when they ask, “Are you going to apply for Medicaid.” You can give them a puzzled look, then a knowing grin, and say, “No, I’m not. But I will be applying for Special Assistance.”

Questions? Just ask in the box below.