Senior living costs are expensive, and many families don’t realize that Medicare doesn’t cover the majority of long-term care expenses. Choosing the right senior living option can be an overwhelming process, especially when care needs and finances collide.
The confusion can increase exponentially when Medicare and Medicaid are brought into the conversation.
The good news is that once you understand how these programs work, some financial assistance can be available through Medicaid waivers.
In this article, we will explore the differences between independent and assisted living, typical costs, and how medicaid planning can help seniors qualify for long-term care benefits.
Table of Contents
- Assisted Living vs. Independent Living: What’s the Core Difference?
- What Are the Downsides of Independent Living?
- How Much Does Assisted Living Cost and Who Pays for It?
- Medicaid, Assisted Living, and the Waiver That Changes Everything
- FAQs About Paying for Assisted Living vs. Independent Living
- Legacy Navigation: Your Partner for the Medicaid Benefits You’ve Earned
Assisted Living vs. Independent Living: What's the Core Difference?
While assisted living and independent living facilities are designed specifically with seniors in mind, there are some key differences between the two models.
Independent living is geared toward seniors who are able to care for themselves but are looking to downsize or simplify their lives. They are still active, but they wish to have a maintenance-free lifestyle.
Independent living provides:
- A community
- Organized social events
- Private living spaces
- Freedom to come and go
- Lower cost
Assisted living, on the other hand, is for seniors who need some level of assistance with daily care activities or medical care. Assisted living facilities allow seniors to maintain a level of independence while still getting the appropriate level of support they need. Seniors with chronic conditions or mobility issues may find assisted living a better fit.
Assisted living provides:
- Trained staff to assist with activities of daily living
- 24-hour access to onsite nursing staff
- Medication management
- Social and recreational opportunities
- Private living spaces
- A community
What Are the Downsides of Independent Living?
Independent living is a great option for seniors who can live on their own and desire freedom; however, the biggest drawback is that medical support and personal care are not provided, and the cost of living can be expensive.
If a senior’s health care needs change or they begin to need daily living assistance, a move to a separate assisted living facility might be necessary. This move can be costly and can disrupt the senior’s life.
When a senior chooses to live in an independent living community, the cost is generally out-of-pocket. Medicare and Medicaid usually do not cover such communities because medical intervention or care is not provided. Depending on location and the amenities provided, the cost of independent living can be anywhere from $2,400 to $5,000 a month.
When the senior’s needs escalate, and a transition to assisted living becomes a necessity, it can catch families off guard.
Legacy Navigation can help seniors and their families navigate this transition. Our team of Certified Medicaid Planners™ is also a clinical care team that can provide necessary medical evaluations and professional financial advice to assist you with waivers that will provide coverage for assisted living costs.
How Much Does Assisted Living Cost and Who Pays for It?
The national average for assisted living facilities is around $4,774 monthly. In states such as Alaska and Rhode Island, the cost can be upwards of $7,000. In states such as Missouri and South Dakota, the price averages around $3,000.
Costs for assisted living facilities can vary depending on a variety of factors, including:
- Location
- Level of care needed
- Size of living space
- Fee structure (all-inclusive or a la carte)
The fees for assisted living generally include room, meals, utilities, and care. With any assisted living residence, these fees are the responsibility of the resident. The fee is determined by a federal standard personal needs allowance that is subject to change annually across states. The resident is also responsible for their “share of cost.” Both of these fees are paid out of their income. The remainder of their income must generally go toward facility costs, which can be a surprise to seniors and their families.
Medicaid, Assisted Living, and the Waiver That Changes Everything
Medicaid alone does not provide coverage for the cost of assisted living. Traditional Medicaid covers costs such as food stamps and doctor visits. However, if a senior applies for and receives a Medicaid Home and Community Based Services (HCBS) Waiver, the care portion of assisted living that the resident would be responsible for can be covered.
Services covered by the waiver include:
- Case management
- Home health aid
- Adult day health services
- Personal care
- Respite care
- Habilitation
The HCBS waiver still will not cover room, utilities, or food, as those are always the resident’s responsibility. However, with the HCBS waiver, when the facility charges the client for care, the client will pay the portion of their income required, and the waiver will cover the remaining care balance.
In-home care on the waiver works differently. Seniors are charged a copay based on the number of caregiving hours they receive. Paying privately, it could cost $35-50 an hour, but with the waiver, especially for low-income seniors, the copay can be much lower, even near zero.
The HCBS waiver is the key to getting Medicaid coverage for assisted living or in-home care. Without it, Medicaid will not cover such expenses. Getting assistance from a medicare planner, such as the team at Legacy Navigation, can help you maneuver through the application process with ease.
Common Roadblocks to Medicaid Waiver Approval and How To Overcome Them
Unfortunately, due to misunderstood income or asset rules, Medicaid denies a significant number of first-time applicants for the HCBS waiver. Many applicants don’t understand that their eligibility is determined at specific times, such as the first day of the month, and that if they are slightly over the limits on one day, it doesn’t mean they are permanently disqualified from receiving the waiver.
Although income and asset limits do exist, there are also legal planning tools that can help if you are over the stated limits. Many seniors fall victim to the Medicaid myths they have heard, such as Medicaid will take their homes, or they have to get divorced to qualify.
Many seniors also think they have to be “totally broke” and can’t have retirement savings to qualify, but that isn’t the case.
Legacy Navigation’s team can assist you with your application and eligibility. If you are overwhelmed, Legacy Navigation will provide professional guidance to help you navigate the application process.
FAQs About Paying for Assisted Living vs. Independent Living
Is Medicaid or Medicare for Seniors?
Both Medicaid and Medicare are for seniors, but they serve seniors differently. Medicare is a federal health insurance program that does not cover long-term custodial care.
Medicare coverage includes:
- Doctor visits
- Hospital stays
- Short-term medical needs
- Medically necessary services and supplies
Medicaid, on the other hand, is a needs-based program. If you have the appropriate waiver in place, it can cover long-term health care costs that Medicare will not.
Traditional Medicaid acts as a state insurance plan. It is designed to assist with costs such as copays, medical needs, and food assistance. However, it is limited in that it does not cover the costs of assisted living or any form of caregiving without being enrolled in the HCBS waiver.
What Is Better, Medicare or Medicaid for Seniors?
Both Medicare and Medicaid serve different purposes for seniors. Therefore, one is not considered universally better than the other. Medicare is designed to cover medical necessities and short-term services.
Medicaid with waivers covers long-term care costs that won’t be covered by Medicare. For seniors over 65, they can be dually enrolled in Medicare and Medicaid. What Medicare won’t cover can typically be picked up by Medicaid with an approved waiver.
When seniors are in need of long-term, ongoing care, using both together provides the most powerful coverage.
Do You Need Both Medicare and Medicaid for Seniors?
Just because a senior qualifies for one form of coverage, it doesn’t mean that they will qualify for both programs. For those who are eligible for both Medicare and Medicaid, the benefits are significant.
With Medicare in place and a Medicaid waiver on top of it, Medicaid acts like a secondary insurance. It covers items such as copays, incontinence supplies, assistive devices, and more that Medicare does not cover.
For seniors with a fixed income, being dually enrolled makes paying for care easier to manage financially. When Medicare doesn’t pay, Medicaid can fill in. Medicaid planning is designed to help seniors achieve dual-enrolled status so that they can afford long-term care assistance.
Legacy Navigation: Your Partner for the Medicaid Benefits You've Earned
Are you overwhelmed by the application process for Medicaid waivers? Our Certified Medicaid Planners™ at Legacy Navigation can help you arrange everything so that when you apply for a Medicaid Home and Community Based Services waiver, you qualify.
Our role is to help seniors access the Medicaid waiver by providing application assistance, financial planning and reorganization to protect finances and spouses, advance directives, asset protection, and care evaluation for seniors across 46 states.
Reach out to us today for a consultation.
