Nursing Home or Assisted Living (Part 2)

In my blog post last week I began to highlight the differences between nursing homes and assisted living facilities. Understanding the differences is especially important when one has limited assets and Medicaid benefits will be needed to pay for care at some point.

The private pay rate for care for both types of facilities is much higher than what they are permitted to bill for their Medicaid residents. For that reason, many facilities have private pay minimums. In the case of assisted living facilities, it is pretty standard. With limited exceptions, the private pay requirement is 2 years. This means one must pay the facility at the private pay rate for 2 years before it will make a Medicaid slot available. Most ALFs make 10% of their beds available for Medicaid so getting approved by the State must be coupled with an available slot. One without the other won’t get you Medicaid benefits.

Nursing home private pay rates are more varied. Some have no minimum while others have anywhere from a few months to a year or more. People tend to focus on the lower rate for ALFs vs. nursing homes, however, if one factors the longer 2 year private pay time frame, the ALF can sometimes cost more. Again, if there is a limited amount of funds before Medicaid is needed, this is an important piece of information.

One final consideration is something I mentioned last week. If additional care is needed in an ALF, it may exceed what the ALF is licensed to be able to provide. For example, hiring an aide may be necessary in order to stay in the ALF. Medicaid, however, will only cover the facility room and board. It won’t cover the cost of the aide. This is not likely to occur, however, in a nursing facility. So when choosing one type of care versus the other it is critical to understand what it means for possible Medicaid eligibility.