How Medicaid Can Cover Assisted Living Costs
Mar 25, 2025
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:
1οΈβ£ 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.
2οΈβ£ Apply for Medicaid Certification
Once licensed, you’ll need to fill out an application with your state’s Medicaid office. This usually includes:
β Facility details & ownership information
β Policies & procedures for resident care
β Financial statements to prove stability
3οΈβ£ Pass Inspections & Compliance Checks
Medicaid will inspect your facility to make sure you meet state guidelines. They will review:
β Staff qualifications & training records
β Resident care plans & documentation
β Facility safety, cleanliness, and emergency procedures
4οΈβ£ 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).
π For example, in Idaho, Medicaid payments go through:
β Blue Cross of Idaho
β 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:
π° 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).
π 2. Medicaid Daily Reimbursement Rate
Medicaid pays you a daily rate per resident, based on the level of care needed.
π 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:
β Document every service you provide (bathing, dressing, mobility assistance)
β Conduct regular health assessments to show increased care needs
β 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:
β Steady & reliable income – Medicaid pays on time, every time
β High demand – Many seniors can’t afford private pay and need Medicaid options
β More referrals – Case managers & hospitals will send residents your way
π 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.
π― Next Steps:
π₯ Download the Business Plan Checklist to make sure you’re ready for Medicaid certification.
π₯Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
π Don’t leave money on the table—Medicaid can help your business thrive!
Show full transcript π
Transcript
00:00:00
hey friend I'm Brandon Gustafson I help beginners like you launch their Assisted Living business in the next 12 months excited to have you on the channel today we're going to be talking about how to get certified as for Medicaid as an assisted living provider so if you need some help with that and need some understanding there make sure you stick around for today's [Music] video hey welcome back if before we get started I want to remind you to go grab the free underwriting calculator at
00:00:27
Assisted Living investing. net it's going to be a tool that helps you determine if you have a profitable investment or not so make sure you go and grab that again it's Assisted Living investing. net now let's get into the topic of today's video we're talking about how to get certified as a Medicaid provider for assisted living Medicaid is something that a lot of people they just steer clear of they don't want anything to do with and Medicaid can be scary there's a lot of rules and regulations
00:00:49
that go into it they're already working in healthcare that's already highly regulated and Medicaid adds some complexity to that but it's also not that bad it's not that scary I promise I have worked in the healthcare for over a decade and have a lot of experience actually in government programs including Medicare Medicaid Medicare Advantage a lot of these different programs and and can really help you understand them so if you are interested in learning more about Medicaid stick
00:01:14
around number one but also type in Medicaid down below so I can see you know what is it that that you need the most help with so type in Medicaid and I'll follow up with you on a comment we can see what we can do to help you out now let's talk number one about Medicaid what is it Medicaid it's a federally funded program that is administered at a state level so the federal government they say okay we are going to allocate you know a trillion dollars to to Medicaid this year we're going to split
00:01:40
that up to the different states based off of their population and then the state gets those funds so you know the state gets a billion dollars whatever and they they then go to legislature and they say okay we have a billion dollars for Medicaid that's our Medicaid budget how are we going to use that money here to make sure we're serving people and it has to cover everybody that does with Medicaid so it's not just assisted living but people that are on food stamps or Wick or that need help in
00:02:07
other areas of of life or children who are in the foster care system or an underserved population or people that don't have a lot of money they all qualify for Medicaid and so they have to say okay we have a you know a billion dollars how are we going to allocate all of this money one of the things that they're going to be doing is allocating funds for assisted living through different waiver programs so some waivers that you could see are elderly blind and disabled which definitely fits into the Assisted Living
00:02:36
realm or it could be like a mental health type of a diagnosis this is actually what we deal with in our Colorado facility are those two waivers often are are the the specific ones that we're working with but at its core Medicaid is is really designed to help low-income or underserved populations get the the benefits and and things support that they need so they can live healthy happy lives that's at its core why we have Medicaid so the the department that does the certification process for Medicaid is going to be
00:03:03
different from the licensing agency at the State uh typically it's going to be somebody that has to do with welfare so Health and Welfare Welfare Services those are the types of things that you could be looking at as you're trying to put that all together and get your certification with Medicaid that's that's who you're probably going to be working with now let's talk about how do Medicaid payments actually work and there's a lot of confusion on this with Medicaid you actually get paid twice um
00:03:28
which is kind of cool so you get paid directly from the resident themselves from their social security income you get to collect a certain amount the state will tell you you can collect x amount of money and it's generally a percentage of their social security and it's a large percentage they keep typically like 10 to 15% and you collect the rest of it so you're getting 85 90% of their social security income because you're paying when you think about it like it seems like a lot right but when
00:03:53
you think about it you're paying for their food and their lodging and everything that they really need you're you're paying for and they have insurance in place to take care of their medications and things like that so they don't really need a ton and so they get to keep a little bit for personal things that they want to buy but at its core you get to collect the majority of that social security income the second way you get paid is through a daily rate for Medicaid and so you get that waiver is
00:04:18
you know that elderly blind and disabled waiver you go through a case management company who works with the the people at the state and they say yep the daily rate for this person is $100 a day and so you get to Bill $100 every single day that the resident is inside of your facility so in a 30-day month that's $3,000 and then if you get a collect $900 from their social security that's $3,900 these are real numbers like th those are very realistic we actually get daily rates that are in the $150 to $180
00:04:48
range so you can get really high rates with Medicaid but that's how you do it the other nice thing about Medicaid is that daily rate you can actually build it as frequently as you want to so if you wanted to bill every week or every other week you are able to do that they only pay out on certain cadences they only pay out like once a week but you can bill as frequently as you want so we typically build twice a month so we get consistent income coming in every month you know we get a chunk of 20,000 and
00:05:14
another chunk of 20,000 and another chunk of 20,000 and it just really helps out from a cash flow perspective with the business to make sure that we have everything that we need to run the business to pay payroll to P buy groceries and all of those things and not run into any Financial issues I'll also say that the rate that you get paid for Medicaid so that daily rate that you get paid it is going to be number one set by the state by the legislature but number two it's also going to be given
00:05:39
based off of the amount of care that you provide so in a lot of States you can actually raise your Medicaid rates based off of demonstrating that you are providing more care this is why it's so important to document Care number one it's required by law that you have to provide documentation for the care that you provide but number two if you're showing that you know three months ago we only had to help them out go to the bathroom you know once a week and we prompted them you know once or twice a
00:06:04
month to to get dressed but now we have to toilet them every single day three times a day and I have to I have to physically dress them rather than prompting them they are declining significantly and I'm doing a lot more work so I should get reimbursed for that so as you can demonstrate that type of of data the type of care that you are actually providing and you can demonstrate it because you've tracked it then you can raise those rates uh you can also do that through assessments with the the different nurses that you
00:06:30
have inside of your facility when they come in and they do an assessment on a resident they can say yes they've declined and now they need XYZ in their care plan and then you can submit that and you can raise your rates there so this is how you raise Medicaid rates it's something that not a lot of people realize you can do but it is entirely possible and you can bump those rates up this is why Medicaid is honestly I think it's the best kept secret in Assisted Living because a lot of people are
00:06:54
scared of it they don't know how to handle it but in reality it's not that hard and you are serving a population that really really needs these Services which is also super rewarding rather than catering to the you know the highend $10,000 a month person and there there's definitely a spot for that and if that's you that's what you want to do then then that's cool like I can still help you out with that um but I also want to point out that you can still do really well through serving a Medicaid
00:07:19
population you just kind of have to understand how to navigate all of that as you get into this another added complexity if there's not already enough with Medicaid is sometimes there's third party administrators sometimes you work directly with the state you build a state the state processes things they get it back to you but sometimes they realize hey we're government we're not efficient we we don't want to pay a staff member to do this and then it's high turnover we have to train them over
00:07:40
again so they will contract out with insurance companies Insurance payers and those payers they have what's called an MCO a Managed Care Organization and those mcos they basically process all of the claims for Medicaid in a specific spot often time sometimes there's contracts that are State based some are County Bas it just kind of depends there's different mcos throughout the the nation and who you're working with but when you get into this world of mcos you have to actually contract directly
00:08:09
with them it's not a hard process at all it's not like getting certified for Medicaid it's just a Contracting process and then you build them directly through their portal and and and work directly with them some of the mcos are great they're super easy to work with others are more difficult just like anything so it just kind of depends in in Idaho we actually are are contract Ed with three versions of Medicaid there's a state based there and then there's two mcos Blue Cross of Idaho and Molina and then
00:08:36
in in Colorado there's just one MCO one third party administrator I can't remember who it is off the top of my head but that's who handles everything and so we just contract directly with those people they ingest the the claims and then they process them and then they pay them out it's actually a process I I did that I was a claims processor for an MCO on a Medicaid contract so I understand a lot of exactly how that process works and everything that goes in into it so another reason why I'm not
00:09:01
scared of Medicaid at all is I I've lived in that world I know exactly what to expect now let's talk a little bit about how to get certified as a medicate provider the application process is going to actually look pretty similar to what you're doing when you when you go through the process to get to get your facility licensed there's a lot of paperwork involved a lot of forms and things like that they're going to need a lot of the same types of of things so there's number one going to be this
00:09:26
application form typically it's like two or three pages it's not long at all basic information facility info your license number you do have to have a facility license to become certified and contracted with Medicaid so that is something you have to do you cannot do this as an unlicensed provider you have to be licensed uh if you want to go and serve a Medicaid population because you're going to have to have that facility license number your proof of insurance you're going to need Bank
00:09:50
information something that I learned and and this is something I teach in The Mastermind program so if you need some help and you want some guidance go check out Alim mastermind.com application apply and see if see if it's a good fit for you but I tell you all the secrets in there about everything and I help you through the process now the one thing that I learned as I went through this process it took us about four months to get certified as a Medicaid provider in Colorado and that was because of
00:10:18
paperwork issues and just them taking forever to process everything I learned a lot from that experience and then when we went to go get certified in Idaho it took us less than a week so I shrunk a 4month period of time down to one week and I can help you do the same thing as you're trying to get certified with Medicaid so that's something that you need help with check out The Mastermind program again it's Alim mastermind.com application um to go and apply for that you're going to need to also apply for
00:10:46
specific waivers and that application is there's boxes on the form that you fill out and you say we want to do this this one we want to do that one again I'll mention the waivers that we serve specifically for our facilities are elderly blind and disabled and and me mental health eate may have different waiver names those are the ones that actually the same in Colorado and Idaho but they may call them something different in your States you just want to look at them uh if you're like I
00:11:11
don't know exactly what that is you could reach out to the person that does the Contracting at the organization or you could just look it up online and figure out what those specific waivers are and what population they're going to serve to make sure that aligns with you and who you want to be working with and who you want to serve in your facility now as you work through all of that process you get everything in there you're going to submit it and then you're going to wait to get approved and
00:11:33
like I mentioned it could take a week I I I figur out how to do this the right way and it took us only about a week maybe a week and a half to to get everything done or in Colorado it took us four months to get certified but it was not entirely their fault I will put some of the blame on them there there was some things that I was missing though and their application process was really not all that well written and and it was confusing as to what I actually needed to provide them with and trying
00:12:00
to get a hold of them on the phone was a joke so that it's a long story I'm not going to get into it in this video um but if you are interested in learning more about that type in application process down below and maybe I could do a little video on exactly my experience and exactly what that looked like so application process if you'd like to hear a little bit more about that now once you receive that certification once you are certified as a Medicaid provider you're contracted with them you do have
00:12:22
to maintain that certification it's an annual certification often times what you're going to have to do to do that is you go and they do online trainings that you have to attend a few of them a year doesn't take very long they're webinar style type types of things you're also going to need to reproduce things like your insurance your proof of insurance Bank info maybe potentially just look at their entire the entire application that you submitted initially and update anything that needs to be on there
00:12:48
addresses or or anything like that mailling info it's it's really a pretty simple process to maintain that certification once you have it you just got to make sure that you don't let anything lapse and that way uh you don't have any payment issues and you just kind of keep things up to date so the more consistent you are doing that the better off you're going to be you also have to just make sure that you stay in compliance with that certification as a Medicaid provider you C you cannot
00:13:10
mistreat your residents you have to make sure that you care for them provide them adequate care that you're following their care plans that you're doing everything that you need to do there and you need to work with the Medicaid payers as as requested and make sure you get them any information that they request sometimes they want paperwork on specific residents they do their own Audits and and things like that so you have to just make sure that you are doing that document everything absolutely everything you got to
00:13:33
document it now if you found all of this to be helpful make sure you like the video subscribe and ring the bell as well so you get notified every time we do content like this we do lives on Tuesdays we put out content on Thursdays as well I love getting out there helping people if you need a free resource go grab I got links down below like a ton of them but go grab the free underwriting calculator Assisted Living investing. net or if you want some help and some guidance as you're trying to
00:13:55
move through this process and and really need some somebody to hold your hand and help you through it go apply to The Mastermind program Alim mastermind.com application I love helping people and giving you guidance to help you make some progress to reach your goals and your dreams and to recap what we've been talking about again has been all about certifying getting certified with Medicaid we talked about exactly what Medicaid is we've talked about how do Medicaid payments work and getting paid
00:14:21
twice which is a really really cool part about Medicaid and why you shouldn't be scared of it we also talked about how to get certified what that process is like and then maintaining that certification as well for the long run does residential Assisted Living sound interesting to you but you're not sure how to get started at Assisted Living investing I'm here to help beginners like you launch their Assisted Living business in the next 12 months want to thank you for watching and remember it
00:14:43
doesn't take a lot just a little bit keep going step by step by step I promise you if you do and you're consistent and persistent you're going to be successful thanks for watching and have a great day [Music]
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