Who Pays for Care in a California Assisted Living Facility?

Who Pays for Care in a California Assisted Living Facility?

It's a common question:  Medicare?  Medi-Cal?  Assisted living is considered a 'non-medical' care model, therefore no health insurance benefit covers assisted living services.  Assisted living services are largely private pay.  Funds for 'private pay' come from the individual's pensions, investments, savings, and sometimes - long term care insurance.  Individuals considering placing themselves or their loved ones in assisted living should be budgeting between $88,000 and $100,000 to cover the cost of care if the individual ages in place. Those estimates should be increased between 3 and 5% annually. 

CARR's $88,000 estimate is based on an average monthly cost of $4,000 for the estimated average of 22 months that an individual lives in assisted living. In California, 80% of the assisted living facility inventory is in facilities licensed for 1 to 6 beds.  These are the facilities where you can find monthly care in the $4,000 to $5,000 range.  If you or your loved one is considering placement in a 'senior retirement community' (an industry marketing term for larger facilities) the monthly prices will be higher (~$7,000 to ~$12,000). 

Medicare is a federal health insurance program; it pays only for covered medical care and costs, not for room and board as assisted living facilities are licensed as non-medical facilities.  The exception to this is hospice.  If an individual living in an assisted living setting meets the eligibility requirements for hospice care, and enrolls with a certified hospice agency, hospice services will then be a covered benefit through Medicare.

Medi-Cal is California's Medicaid health care program; it is administered by the California Department of Health Care Services.   Medi-Cal pays for medical services for seniors (and others) having limited resources and income.  An individual must apply for Medi-Cal, and meet the eligibility requirements.  If the individual is Medi-Cal approved, and applies and is accepted for the Assisted Living Waiver Program (ALWP) program,  Medi-Cal will pay a portion of the assisted living facility care and supervision bill.  

Before you start looking for an assisted living setting, assess your financial condition recognizing that unless you or yours qualify for Medi-Cal,  you will be paying for assisted living services from your savings, pension or investment income.  Social Security payments alone (~$1,400) are generally insufficient to meet the average monthly cost of assisted living care.  Once you understand how much money you have, and what the care needs are, you will be better equipped to understand the care and services you will be able to afford and ultimately receive.  CARR encourages families to question providers carefully to understand the admission requirements including the signing fee, the monthly rates, any extra costs (i.e. levels of care, point systems, etc.) that might show up on the monthly invoice.

If you have additional questions, please feel free to contact our office for further guidance or resources at (619) 540-1648.

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