Can Health Insurance Cover Assisted Living?
May 30, 2025
Today, we're going to talk about something most people like to avoid but absolutely need to understand: how to pay for assisted living.
There are multiple ways to cover the cost of care, and if you’re starting or running a facility, it’s your job to know how these systems work. The good news? You don’t need to be an expert in every program — you just need to know how the money flows.
In this post, I’ll walk you through the top payment options your future residents might use — and what it means for your business.
Check out this video, too;
Why It Matters
If you’re opening an assisted living facility, you need to get paid.
Understanding how residents pay for care helps you:
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Set your pricing with confidence β
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Choose your ideal resident profile π―
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Avoid cash flow issues πΈ
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Grow a financially sustainable business π
Let’s break it down.
1. Private Pay
Private pay is the simplest form of payment — and the one you’ll likely work with most often.
What it looks like:
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The resident pays you directly every month.
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You set your rates based on the services you provide and the level of care you offer.
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No insurance or third-party programs are involved.
Examples:
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The resident has a trust fund or investment income.
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The family sells a house to cover costs.
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Loved ones pitch in monthly.
π Your Job: Assess your residents annually (or their care level changes) to make sure your rates reflect the care you're providing. Update rates if care needs increase.
2. Medicaid
Medicaid is a government program that covers long-term care for those who qualify financially and medically.
Here’s the catch:
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You must be a Medicaid-certified facility to accept residents on Medicaid.
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Medicaid rates can be lower than private pay rates (though at my facilities they're usually about the same).
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Each state has its own process and reimbursement model.
π‘ Tip: Start as a private-pay facility and layer in Medicaid certification later once you're confident in your systems. We walk you through this in Phase Four of our Success System.
3. Long-Term Care Insurance
Long-term care insurance is a great additional option if a resident has it in place.
How it works:
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The resident pays you out of pocket.
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You give them a receipt.
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They submit it to their insurance company for reimbursement.
π Important: You don't need to know the details of their policy. Just make sure you're paid. Some providers choose to contract directly with the insurance company, but it’s totally optional.
Why it’s great:
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Residents with LTC insurance often have stable payment setups.
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It adds another reliable funding stream beyond Medicaid or private pay.
4. No Insurance (Still Private Pay)
Some residents may not qualify for Medicaid, have LTC insurance, or want any government involvement. These are your standard private-pay residents.
Possible reasons:
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They have assets (like real estate) they’re using to fund their care.
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Family is helping cover the cost.
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They don’t want to deal with Medicaid or insurance red tape.
πΈ You still assess care needs regularly and raise rates when care increases. You’re in control of your pricing.
5. Grants, Funds & Community Programs
Yes — some residents may qualify for grant programs or local funds that help pay for care.
Examples include:
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State-level aging services
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Non-profit grants
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Local community foundations
As a facility owner, you're not required to help residents find these programs. But offering that support as a value-added service could set you apart.
π‘ Optional Strategy: Build relationships with case managers, social workers, or elder care coordinators who know about these programs and can refer residents your way.
π£ Next Steps for You
Here’s what you can do today to get closer to accepting all these types of payments:
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Download the Business Plan Checklist – This will help you create a solid business plan as you build a foundation for your assisted living business.
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Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
π¬ Got Questions?
Drop them in the comments or shoot us a message. Whether you’re asking about private pay vs. Medicaid, how to qualify for LTC insurance, or anything else related to running a facility — we’ve got your back.
Show full transcript π
Transcript
00:00:02
hey friend it is Brandon Gustafson with Assisted Living investing excited to have you here with me on the channel today for our live we're going to be talking today about health insurance for assisted living uh but before we get started I want to remind you that at Assisted Living investing we're here to help beginners launch their Assisted Living business in the next 12 months uh so if you are interested in getting started in doing that then make sure you stick around because we're going to be
00:00:25
getting into all kinds of content to help you out um as you go through that process and also I want to remind you to get over and um download our free business plan checklist so I'm going to have a ticker that's going across the bottom here uh as you watch uh so go ahead and download that will help you kind of get kicked off and getting things started on your journey as well uh by downloading that business plan checklist so want to make sure you get go and grab that um now now let us I'm
00:00:55
just about have this ready to to paste onto the Facebook group so um let's let's jump into the topic for today's video we're going to as I mentioned be getting into uh health insurance for assisted living and let me share my screen here um yeah and go grab that business plan checklist so to give you some background on me for those of you who who may not know who I am yet uh my name is Brandon Guston I own two oper two assisted living facilities out of state I live in Utah and I have one
00:01:25
facility in Colorado one in Idaho I've been doing this for close to four years now but have been in the healthcare industry for over a decade so I have a lot of experience um in healthcare a lot of background there uh working in nonprofits government paid programs so Medicare and Medicaid uh which is actually a lot of what we're going to be talking about in our video today um have secured over a million dollars uh one and a half million dollars in SBA funding actually um and do all of this
00:01:55
stuff out of state have a masters in healthcare administration so have have a lot of background um in healthare and and here to kind of help you and guide you as you are uh getting into into this journey of starting an assisted living facility if you are new here go ahead and type in newbie down below and if you uh kind of are already operating but you need better understanding of exactly how this insurance stuff is going to impact you and your business inside of Assisted Living then go ahead and type in
00:02:23
operator down below um and would love to hear from you as well as we're going through this um if you have um comments or question questions about Medicare Medicaid long-term care insurance those are the main things we're going to be talking about today um then go ahead and type those in uh we'll have time for Q&A here at the end of the call um or at the end of the the live session and we'll be able to help you out and make sure you have the understanding that you need um as well and if you do Medicaid um like
00:02:50
if you have been doing this for a while uh go ahead and type Medicade down below um and if you have done long-term care insurance type uh long-term care down below as well would love to just kind of see uh how people are are doing this and and their experience with this so make sure you share that with the group here uh that would be extremely helpful to to everybody that's watching so let's get into uh this there there really are kind of there's a few different types of insurance that I want to make sure that
00:03:19
you're aware of and I touched on these a little bit before there are some government programs insurance so this is excuse me Medicare um and Medicaid and under the the the umbrella of Medicare is also a Medicare Advantage which we're not going to touch on but these are all government program um types U of of funding types of insurance programs that some people have a misconception around how they work with Assisted Living so I want to kind of clarify that for you today make sure you understand what it looks like how it
00:03:51
works and um how you can potentially leverage these things as you get into your Assisted Living business the next one is long-term care insurance which is not a a government program it is something that is more privately held so we're going to talk about those three pieces um here in our in our video today to help you understand what these are and what they look like so you you're not scared and you hopefully don't get these things confused because they are interchangeable Medicare Medicaid
00:04:20
they're very similar you know the first four five letters six letters are the exact same um so uh it's one of those things that they people think they're interchangeable they're actually not they are very different types of programs so we're going to get into that um in our video today so let's start off by talking about Medicare so Medicare is a federally funded program um it is generally going to be for those that are 65 and older um except for in certain instances where somebody has a certain
00:04:53
type of disability or they have inst stage renal disease which is ESRD when they fall under that then they can get access to Medicare benefits um with with those programs there's also a Medicare Advantage program that I didn't call out separately here but Medicare Advantage is Medicare that is basically um administered by a private insurance um and they have different types of benefits and things like that as as they go along in getting things started so Medicare is ferally funded program um
00:05:27
oftentimes for the elderly assisted living is not a covered service under Medicare so if you you know you are are thinking you want to do this um you're probably hearing Medicare from a lot of people often times um they don't realize that Assisted Living does not have any Medicare benefits nursing homes however do so um this is another thing that nursing homes and assisted living that kind of get confused and interchanged and I think Medicare is a big reason for that the population um in
00:06:00
Assisted Living especially if you're doing an elderly care is going to crossover um your residence could be on Medicare but you as a provider are not going to be able to get reimbursed from Medicare for them when you have an assisted living facility they could have Medicare benefits for their prescriptions for their for their hospital visits and things like that but they're they're not you as a provider don't get access to any of those those Medicare benefits okay so that's that's
00:06:30
a line I want to make sure that you understand um as as you get into this that um the uh I have a buddy that's on here on the live uh and he's talking about uh milanus we we served a church mission in Argentina together and I used to eat noesis so thanks Danny um good to see you thanks for being here um anyways we'll get back into this um for for assisted living so make sure you understand that Medicare is not going to cover anything that you are doing for assisted living um as as you're trying to push things along you
00:07:07
can still accept residance that have Medicare though now let's talk about Medicaid so Medicaid on the other hand you can so Medicaid is a federally funded program um it's something that um again it's federal dollars that are coming in and helping out with things but it is administered at a state level so the state receives the funds from the federal government that says um you know you can here here's a billion dollars um go ahead and spend it how you want it goes then through the legislature and
00:07:35
they say yep we have a billion dollars we're going to allocate 500 million to assisted living and 400 million to um housing and a 100 million to food I mean those numbers are not accurate at all just kind of giving you example they set the budget for for those things um and then what's going to happen is they um they you you as a provider get certified as a Medicaid provider and when you are certified as a Medicaid provider you can bill you can accept and Bill for residents that have Medicaid so
00:08:11
the the process that they go through um a resident that wants to be on Medicaid is going to um go and and and receive Medicaid benefits from the state they they go they apply they they have proof um that they qualify for Medicaid and as I mentioned here it's often times based off of limited income or other resources they prove hey I need Medicaid so that I can buy food or have Assisted Living Services or or whatever they need it for Medicaid reviews their application they say yes we approve you for the next
00:08:47
three months six months year whatever they they have to go through a recertification process as they uh as a Medicaid beneficiary you as a provider on the other hand will go to the State um it's generally going to be like the welfare Health and Welfare some a department that's that's like that and you're going to fill out your Medicaid application as a provider to become Medicaid certified it's going to be very very similar to the application process you went through to receive your license
00:09:19
as a facility to operate as a facility but it's a different government department they don't talk to each other you're going to have to fill out all this paperwork again and provide it to them okay so once you get um that c ification in place now that per that Resident who has Medicaid and you as a Medicaid provider can um kind of work together um so they come to you they say I need a home you say cool I'm Medicaid certified they come into the home and then you get uh preapproval um for their
00:09:48
Medicaid benefit for assisted living that tells you here's the code and I I did a video and I'll try to link this up above um but it says here's your code this is the Assisted Living code you can build this and it's $100 a day or whatever amount that it is um you build one code per day it's all inclusive of all the things that you do with Assisted Living okay so um that's that's how Medicaid's going to work and then you also with those Medicaid residents you're going to be able to collect
00:10:16
directly from them from their social security income so they receive $1,000 from Social Security every month you get to collect $850 of that you know somewhere along those lines um the state will also kind of tell you um what that number looks like you collect that $850 you build $100 a day to Medicaid um so you get another $3,000 a month for Medicaid so you're making $3,800 per month per resident um that's on Medicaid those are just rough numbers to kind of give you an example we actually have
00:10:46
higher rates than that for our Medicaid residents because um just like you can with a private pay resident you are evaluating them doing assessments and when you are providing higher levels of care you demonstrate that to Medicaid who will review that then make adjustments to that daily rate based off the amount of care that you're providing to them so you just want to un you just kind of have to understand how that all works um and we get over $4,500 for some of our residents that are on Medicaid
00:11:14
and that's what some people want to do for private pay and you know it gives us a really decent flow of residents and helps us keep our beds full um you do have to work with government agencies and it can be a headache sometimes but it is a viable way for you to make enough income to create a successful business so uh just want to make sure that you're aware that that you can do this you can work with Medicaid and it will work and it works for assisted living um and it's it can feel big and
00:11:44
scary and confusing um but it's it's something that you can handle if you would like to learn more about Medicaid um go ahead and type Medicaid in um down below and we can do some some other videos um on that or I can send you some resources there um also if you are interested in learning about Medicaid or need some help as you're going through this process make sure you check out the Mastermind program so Assisted Living investing. netm Mastermind that uh is my program that kind of helps you through
00:12:10
it's a year-long program we really dive deep into this and Medicaid the process for doing that is in phase four of that of that program uh where you get your license you get Medicaid certified you get your um your administrator license we work on all those things in phase four um and so if you need some help and guidance going from I don't know what I'm doing I don't know how to start to I have a facility and is successful and profitable um go ahead and check out the Mastermind because that's that's what we
00:12:37
do in that program so uh check that out I'd love to have a conversation with you and have you get started in that program uh and help you along your journey now let's shift over and let's talk a little bit about long-term care insurance so long-term care insurance I actually don't have any residents that do less but I think it's an incredible way for you to get in and um start working with people and kind of um have a really good consistent way of bringing income into facility so basically this is a
00:13:08
secondary insurance so it falls after Medicare Medicaid any private insurance that somebody might have it it is covers the extra expenses on top of that and assisted living is one of those that that it's going to help out with um beneficiaries what will happen is uh so your resident they let's say say that they were uh they private pay they didn't qualify for Medicaid um they're on Medicare but as an assisted living you don't get anything from Medicare so um they're a private pay resident for
00:13:41
you at your facility they come in and they get build for the service so let's say you're charging somebody $5,000 a month to to stay in the home you would charge them they would pay that bill um using their private funds they'd pay $5,000 to you as a as the provid as the person with the facility um and then they take a receipt you just have to like give them a receipt and they submit it to their long-term care insurance company for reimbursement and then the long-term care insurance gives them that
00:14:14
$5,000 back and then they have that in the bank and then they can use it again you know and just kind of cycle through things that way um that's a very simplified way of how that works but it essentially is going to give them a benefit where they receive money and then they they give it to you now how that exactly works you know are they getting the full 5,000 are they only getting half of that that's going to be dependent on them how they set up their long-term care insurance um all of those
00:14:42
things like those are those are questions that as a provider um I honestly don't need to care about as long as my resident is paying me the $5,000 per month um then how they handle things on their end that you know that's that's up to them you kind of think of it as as life insurance you get this early on in your life you start paying into it um to the point that then you can um pull out of it so it's kind of like a cash value life insurance type of a thing in my brain this is how how it
00:15:11
is kind of structured um but you pay into it and then you can draw on it after kind of like a savings account um which is going to be beneficial so it's really great if you can find residents that have long-term care insurance it's going to help guarantee that payments are happening there are occasions and I've I've heard of people doing this where as a provider to take out the resident as the middleman I contract for lack of a better phrase with that long-term care insurance so I bill them
00:15:39
directly I invoice them directly and then they pay me directly so it just takes out the resident so you could do that if you feel Comfort comfortable doing that and and feel like it you know you could handle that process if not then you just build a resident directly they submit that for reimbursement and they get taken care of that way but long-term care insurance really great benefit um for those residents and it can supplement on some of these other things like Medicare and Medicaid um and and be beneficial so something you might
00:16:08
want to consider there as you're getting into this now what about no insurance um so there there are those residents that just don't have insurance so this could be uh you know your private pay residents um they they don't have insurance they don't have long-term care insurance they don't have Medicare or Medicaid they can't qualify because they have a huge Trust fund or maybe they have Medicare they just you know you don't get access to that as an assisted living um provider you um so in that
00:16:37
case they are going to be private pay and then you just set your rates and very similar to what I was explaining there with the Medicaid and raising rates you're going to do regular assessments on the residents at least annually if not more frequently based off of when you there's a change in the level of care that you're providing to your residents um and when that happens you would adjust rates up and then you just build the resident directly similar to the long-term care insurance the
00:17:01
exception here is they're not taking this uh you know that that invoice and and send that receipt of payment to the long-term care insurance they have just paid it um like that's that's kind of how private pay works this could happen because somebody had a huge trust fund maybe they had a house and they sold it and and now they have all of that that money that's there to pay for their care like who who knows how they got the money um could be family that just wants to pay for it there's any number of
00:17:29
reasons why somebody could be on private pay um you just want to kind of understand that once they become your residents but um as long as they're paying then it doesn't matter nearly as much so uh that's something you just want to take into consideration and then there's other programs as well there are Grant programs out there that um help pay for residents to receive Assisted Living Services and um there's there's all kinds of opportunities out there um that exist in the world that people want
00:18:00
to um help other groups there's funds there's grants there's um programs um Community programs there there's a lot of opportunities out there as a provider it is not necessarily your responsibility to help a resident find those programs but it is something that if you wanted to add it as a service you certainly could do something like that um but there you know typically it's the resident they go out they find those opportunities um they may have to pay for services like long-term care
00:18:30
insurance and they get reimbursed you they may find a program that will pay you directly and then you may have to have some kind of involvement there at that point um just to to kind of get in and and get payments set up so that you can get paid but um at its core you know th those are the kind of the the ways that the payments work here inside of Assisted Living um now I want to get into questions so if there's any questions um out there that anybody has please go ahead and type those and while
00:18:59
you're doing that uh and could be Medicare Medicaid long-term care insurance anything there or anything else that's just on your mind um go ahead and type your questions in uh while you're doing that just want to remind you to like the video subscribe and ring the bell as well so you get notified every time we go uh and do these live sessions on Tuesdays and when we put out the content on Thursdays as well so you can just kind of stay up to date and get some extra guidance um have some really fun and exciting videos that
00:19:26
are planned um and if you are interested in getting some some extra assistance as you go along your investment Journey check out the The Mastermind program Assisted Living investing. netmaster uh would love to help you out through your journey uh it's a year-long program the the people that are in there are making some incredible progress I love chatting with them and kind of helping them um through some of the the roadblocks and things that are coming up um it's been super fun and rewarding to to kind of
00:19:53
help them and make some progress so if that sounds interesting to you then then check out the program um also want to remind you to go get some of the free resources so on YouTube I've got like five or six down below so go and check those out uh you can get the business plan checklist which has been going across uh the bottom here uh to kind of help you get started it really kind of helps set the stage for phase one of everything that you're doing which is building a business plan building that
00:20:18
Foundation helping you get clarity and then helping you have something that you can go and hand to somebody else and and help them make some progress um towards helping you get the funding that you need and help you achieve your goals um it's really important for you to to put all that together and the business plan checklist is a great way for you to to get started there so Assisted Living investing. netb checklist um well I want to thank everybody for being here uh we had quite a few people in here um today uh and
00:20:48
even though we don't have a lot of questions that's totally fine I hope you found this information valuable I want to remind you again to get over and get that business plan checklist Assisted Living investing. netb checklist list uh and thanks for watching and we will talk to you next week have a great day
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