How Medicaid Can Cover Assisted Living Costs

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If you own or are thinking about starting an assisted living facility, you’ve probably wondered: Can Medicaid pay for residents’ care?

The answer is YES! But there’s a process to get approved—and if you don’t know how it works, you might miss out on steady, long-term income for your business.

This guide breaks down how Medicaid funding works, how to become Medicaid certified, and how you can increase your reimbursement rates to make the most of this opportunity.

Check out the video, too:

What Is Medicaid and How Does It Work?

Medicaid is a government program that helps low-income seniors pay for healthcare, including assisted living. While Medicare covers short-term hospital stays, rehab, or even nursing homes, Medicaid is the one that helps with long-term care, including assisted living.

Each state runs its own Medicaid program and sets eligibility rules, payment rates, and requirements for assisted living facilities. This means you need to check with your state’s Medicaid office for the exact process.

Steps to Get Medicaid Certified

If you want Medicaid to pay for residents in your facility, you need to become a Medicaid-certified provider. Here’s how:

1️⃣ Get Your Facility Licensed

You must have a valid assisted living license before applying for Medicaid. This ensures your facility meets safety, staffing, and operational standards.

2️⃣ Apply for Medicaid Certification

Once licensed, you’ll need to fill out an application with your state’s Medicaid office. This usually includes:

✔ Facility details & ownership information
✔ Policies & procedures for resident care
✔ Financial statements to prove stability

3️⃣ Pass Inspections & Compliance Checks

Medicaid will inspect your facility to make sure you meet state guidelines. They will review:

✔ Staff qualifications & training records
✔ Resident care plans & documentation
✔ Facility safety, cleanliness, and emergency procedures

4️⃣ Contract with Managed Care Organizations (MCOs)

In some states, Medicaid doesn’t pay you directly. Instead, it works through private insurance companies called Managed Care Organizations (MCOs).

📌 For example, in Idaho, Medicaid payments go through:
✔ Blue Cross of Idaho
✔ Molina Healthcare

You may need to sign contracts with these MCOs to receive payments.

How Medicaid Payments Work in Assisted Living

Once certified, you’ll receive payments from two sources:

💰 1. Resident Social Security Income

Medicaid residents must contribute most of their Social Security benefits toward their care. The state sets the amount, usually allowing them to keep a small personal allowance (around $100–$150/month).

🏠 2. Medicaid Daily Reimbursement Rate

Medicaid pays you a daily rate per resident, based on the level of care needed.

📌 Example:

Basic care: $100/day
Higher care needs: $180+/day

Since Medicaid pays weekly or biweekly, it provides a consistent cash flow for your business.

How to Get Higher Medicaid Reimbursement Rates

Many facility owners miss out on extra money simply because they don’t track resident care properly. Here’s how you can increase your rates:

✔ Document every service you provide (bathing, dressing, mobility assistance)
✔ Conduct regular health assessments to show increased care needs
✔ Submit detailed reports to justify a higher daily rate

If a resident requires more hands-on care, you can apply for a higher Medicaid rate—but only if you have proper documentation!

Why Accept Medicaid Residents?

Some assisted living owners avoid Medicaid because they think it’s complicated. But here’s why it can be a smart business move:

✔ Steady & reliable income – Medicaid pays on time, every time
✔ High demand – Many seniors can’t afford private pay and need Medicaid options
✔ More referrals – Case managers & hospitals will send residents your way

📌 Pro Tip: Many private-pay facilities struggle to stay full, but Medicaid-approved facilities rarely have empty beds because demand is so high.

Final Thoughts: Should You Get Medicaid Certified?

If you’re serious about running a successful assisted living facility, getting Medicaid certified is a smart way to create a steady, recession-proof business.

🎯 Next Steps:

📥 Download the Business Plan Checklist to make sure you’re ready for Medicaid certification.
🔥 Join the Assisted Living Investing Mastermind for step-by-step coaching on licensing, funding, and scaling your business.

🚀 Don’t leave money on the table—Medicaid can help your business thrive!

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