Medicaid and Assisted Living: What You Need to Know

assisted living funding assisted living reimbursement rates medicaid assisted living medicaid provider enrollment medicaid waiver program private pay vs medicaid Jul 17, 2025

If you’re thinking about opening an assisted living facility, you’ve probably wondered:
Can Medicaid help pay for this?

The answer? Yes—but it depends. Medicaid can be a helpful funding stream, but only if you understand how it works in your state.

In this blog, we’ll break down everything you need to know about Medicaid and how it can (or can’t) support your assisted living business. We’ll also share tips to avoid common mistakes and how to plan smarter from day one.

Let’s dive in! 🚀

Check out this video, too:

What Is Medicaid, Really?

Medicaid is a federally funded program but administered at the state level, it's designed to help cover medical costs for low-income people or those with disabilities. It’s different from Medicare (which is more age-based).

🧠 Here’s the key thing:
Every state makes its own rules about what Medicaid covers. Some include assisted living. Some don’t (though they may just refer to it as something different, like long-term care). And even if they do cover assisted living services, the payment amounts and requirements can vary quite a bit.

💡 Pro Tip: Don’t assume Medicaid will cover your residents’ costs. You have to do your homework early.

Can You Accept Medicaid in Assisted Living?

Short answer: Maybe.

To accept Medicaid at your facility, you need two things:
✅ Your state must offer a Medicaid waiver program that includes assisted living (or something similar)
✅ You must become a Medicaid-approved provider in that state

Even if Medicaid is available, it doesn’t always pay enough to support your operating costs. Some states reimburse far less than what it costs to provide quality care.

Many providers find that Medicaid doesn’t fully cover the cost of staff, meals, supplies, and facility operations. So while it can help, it’s not a guaranteed path to profitability.

The Truth About Medicaid Waivers

Waivers are how states expand Medicaid to cover services like assisted living. But most of them come with serious limitations.

📌 Waivers can have long waitlists
📌 The reimbursement rates may be low
📌 There may be caps on how many people can be served

If your facility depends entirely on Medicaid, your margins may be tight or nonexistent. That’s why financial planning matters more than ever.

Should You Build a Medicaid-Based Business?

If you're thinking about building your business entirely around Medicaid, here’s a word of caution:
❌ Don’t assume it’s a sustainable model unless your numbers make sense
❌ Don’t rely on Medicaid unless you know your state’s rules and rates
❌ Don’t jump in without a solid business plan

It’s better to treat Medicaid as one piece of your business model, not the entire foundation.

How to Accept Medicaid the Right Way

If you still want to accept Medicaid, here’s how to do it right:

📌 Step 1: Check your state’s waiver programs
Go to your state’s Medicaid website and search for “Home and Community-Based Services (HCBS) waiver.” Watch the video linked above for more tips on how to search!

📌 Step 2: Get licensed and apply as a provider
You’ll need to go through your state’s provider enrollment process. This includes inspections, paperwork, and approvals.

📌 Step 3: Underwrite your numbers carefully
Use conservative estimates.

Can you Be Successful with Medicaid?

Even though Medicaid has a bad reputation, you can still be very successful serving a Medicaid population!

In my facilities, we are mostly Medicaid (90%+) and we still remain profitable. Our monthly Medicaid rates are between $3,500-$7,000/month, but if you're going to go with Medicaid, make sure you understand the numbers for your state to make sure it makes sense.

Don't be scared of Medicaid, but do your homework!

Ready to Launch? Here’s What to Do Next

Want to open an assisted living facility that serves Medicaid residents—without going broke?

✅ Step 1: Download the Business Plan Checklist and see if Medicaid makes sense for you
✅ Step 2: Apply to our Mastermind Program for help building a real, sustainable business
✅ Step 3: Do your homework on your state’s Medicaid rules before making any decisions

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