Do Medicaid Waivers Pay For Assisted Living?

Author: Jackie Smart
Reviewed By: Kristi Bickmann

Medicaid waivers help seniors pay for assisted living. Although regular Medicaid may cover services such as medication management, personal care assistance and therapy, it doesn’t pay for the everyday expenses of bed and board.

Older adults moving into assisted living face average annual fees of $54,000. So, to cover more of the expenses involved with residential care, low-income seniors need to look to Medicaid waivers for help.

What is a Medicaid waiver?

Medicaid waivers allow states to assist elderly residents with paying for care that wouldn’t normally be covered by Medicaid. Classified as Medicaid Long-Term Services and Supports (LTSS), these programs provide the care and support seniors need to live in their own homes or within a residential care community and avoid entering a nursing home.

Around 18% of assisted living residents rely on Medicaid to help cover the costs, and it’s estimated that 1.6 million people used LTSS in 2020 to pay for services, such as assistance with the activities of daily living and bed and board.

Types of Medicaid waivers

Medicaid waivers, what they cover and the eligibility criteria vary by state. To help identify which programs are available in their region, seniors can find a full list on the Medicaid website.

For senior care, these programs usually fall under sections 1115 and 1915 of the Social Security Act.

Home and Community-Based Services (Section 1915c)

Home and Community Based Services (HCBS) waivers help states provide long-term care services in settings other than a nursing facility. Eligible seniors can use HCBS to receive the support they need to remain in their own homes or live in a supportive residential setting, such as an assisted living community.

Demonstration Waivers (Section 1115)

States use Demonstration waivers to temporarily test new ways to deliver Medicaid funding. They’ve become popular with states attempting to utilize the additional funding they receive under the Affordable Care Act. All programs must be budget-neutral, so the Federal government’s contribution doesn’t exceed the amount it would spend if the waiver didn’t exist.

Managed Care Waivers (Section 1915b)

Through Managed Care waivers, seniors enroll for the care they need in a state Medicaid-funded provider. This limits the ability of retirees to choose their preferred assisted living community.