Can Health Insurance Cover Assisted Living?

assisted living payment options how to pay for assisted living long-term care insurance assisted living medicaid assisted living paying for senior care private pay 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:

Set your pricing with confidence ✅
Choose your ideal resident profile 🎯
Avoid cash flow issues 💸
Grow a financially sustainable business 📈

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:

The resident pays you directly every month.
You set your rates based on the services you provide and the level of care you offer.
No insurance or third-party programs are involved.

Examples:

The resident has a trust fund or investment income.
The family sells a house to cover costs.
Loved ones pitch in monthly.

📌 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:

You must be a Medicaid-certified facility to accept residents on Medicaid.
Medicaid rates can be lower than private pay rates (though at my facilities they're usually about the same).
Each state has its own process and reimbursement model.

💡 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 Mastermind Program.

3. Long-Term Care Insurance

Long-term care insurance is a great additional option if a resident has it in place.

How it works:

The resident pays you out of pocket.
You give them a receipt.
They submit it to their insurance company for reimbursement.

📝 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:

Residents with LTC insurance often have stable payment setups.
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:

They have assets (like real estate) they’re using to fund their care.
Family is helping cover the cost.
They don’t want to deal with Medicaid or insurance red tape.

💸 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:

State-level aging services
Non-profit grants
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.

💡 Optional Strategy: Build relationships with case managers, social workers, or elder care coordinators who know about these programs and can refer residents your way.

👣 Next Steps for You

Here’s what you can do today to get closer to accepting all these types of payments:

✅ Download the Business Plan Checklist – This will help you create a solid business plan as you build a foundation for your assisted living business.
✅ Apply to the ALI Mastermind Program – If you want help getting licensed, certified, and fully operational, I will walk you through every phase — especially the messy stuff like Medicaid setup.

💬 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.

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