Paying for Care
For most families, understanding the payment options for senior care is very confusing:
- Why does Medicaid cover the more expensive option of long-term care but not cover the more cost-effective option of Assisted Living?
- Does Medicare cover care for a person who has Alzheimer's disease and needs to move to a nursing home to be safe?
- What is considered skilled care and what is custodial care?
These are just a few of the many questions our Senior Care Advisors receive from families every day.
To help make payment options easier to understand, we put together this chart, which gives you a quick overview of what types of payments are typically accepted for each level of care.
| Medicare | Medicaid | HUD / Sliding Scale | Private Funds | Long-Term Care Insurance | Veterans' Benefits | Managed Care | |
| Adult Day Services | No | Some Instances | Some Communities | Yes | No | Yes | No |
| Alzheimer's & Dementia | Not unless they meet criteria for short-term rehab | Yes | No | Yes | Depends on type of policy | Yes | Not unless they meet criteria for short-term rehab |
| Assisted Living | No | Some State | Some Communities | Yes | Depends on type of policy | Yes | No |
| CCRC | Depends on level of care required | Depends on level of care required | Some Communities | Yes | Depends on type of policy & level of care required | Depends on level of care required | Depends on level of care required |
| Home Care | For skilled services if person meets criteria | Some Instances | Some Communities | Yes | Depends on type of policy | Yes | For skilled services if person meets criteria |
| Independent Living | No | No | Some Communities | Yes | No | No | No |
| Nursing Care | For Skilled Rehab Visit Only | Yes | No | Yes | Depends on type of policy | Yes | Depends on type of policy |
When you are shopping for care, understanding what services and amenities are offered and what payment covers them is often key in making your decision on senior care.
Home Care Services
If a client is receiving skilled nursing and/or therapy services, Medicare (or their private health insurance) may pay for home health services on a short-term basis. Medicare requires the patient to be homebound and under the care of their physician. The agency must be Medicare certified. When clients are receiving private duty or homemaker services, private funds are typically the source of payment. Some area agencies on aging have funds that assist with payment, and long-term care insurance policies sometimes cover this as well. If your family member was a veteran or spouse of a veteran, they may also be entitled to VA Benefits.
Adult Day Services
Payment for adult day services is typically from private funds. Your local agency on aging may have funds available to help families with this type of care. In addition, some long-term care insurance covers adult day. For clients with more intensive medical needs, Medicare part B (or their health insurance) may help cover skilled services and therapies. You should also check with your tax advisor to see if the care you provide to a family member or loved one meets the criteria for Dependent Care Tax credits. Again, if your family member was a veteran or spouse of a veteran, check with their VA Advisor to see if they will help with the cost of care.
Independent Living
Most often, independent living is paid for from private funds. In some instances, communities are subsidized by different state and federal programs and those communities are able to offer fees at a sliding scale based on income. Your local Area Agency on Aging typically maintains a list of subsidized senior housing and entrance requirements. Assisted Living. Assisted living is typically paid for from private funds, but there are a few exceptions. Veterans and their spouses are often entitled to some form of VA benefit for assisted living. Some long-term care insurance policies cover licensed assisted living. Check your loved one's insurance policy to see if it is covered. In a limited number of states, Medicaid funds and waivers are available to help with assisted living costs.
Specialized Alzheimer's and Dementia Care
For memory care in an assisted living, fees are typically paid for from private funds. There are a few exceptions. Some long-term care insurance policies cover licensed assisted living, and in a few states, Medicaid funds are available to help with assisted living costs. Reimbursement for dementia care in a nursing home is either from private funds, long-term care insurance or Medicaid. Continuing Care Retirement Community. Understanding the contracts, fees and payment structure for a CCRC can be very confusing. The most common payment type is private funds. Some CCRCs also require a non-refundable entrance fee or an equity payment, while others don't require these fees or make them refundable. Some communities accept Medicaid in their assisted living (depending upon the state) and in their long-term care, yet others won't. Most CCRCs have a short-term rehab program that is Medicare certified. See our Tips and Checklists for a better understanding of what to look for and what to ask a CCRC with regard to payment and fees.
Nursing Homes & Skilled Nursing Centers
Reimbursement for nursing home patients and residents is a bit complex. If a patient is there just for a short-term rehabilitation stay, Medicare and/or private insurance typically covers the stay. If the patient continues to meet what is known as the "skilled criteria" during their rehab stay, Medicare covers the first twenty days at 100% and then 80 additional days at 80%. If a patient has a secondary insurance, it often covers the 20% not covered by Medicare.
For long-term care residents, private funds, Medicaid, and long-term care insurance are the typical methods of payment. If the patient was a veteran or spouse of a veteran, they may have VA benefits that will help with a portion of their stay.
