Paying for Assisted Living Facilities: Spend Downs

Spend Downs at Assisted Living Facilities in the Denver

When professionals in the senior living industry discuss ways an individual can pay for care and housing, you may hear terms such as private pay, spend down, and straight medicaid. It can be confusing! In the Denver Metro area there are many assisted living facilities that only accept private pay funds for care and housing. They are not licensed to receive Medicaid funds from the state of Colorado.

Many facilities choose to only accept private pay residents because the Medicaid reimbursement rate is much lower than they can receive from residents who are able to private pay. Other facilities accept private pay and spend downs, while some facilities accept private pay and straight medicaid. When a resident is allowed to private pay for a certain period of time and then go onto Medicaid, it is known as a spend down. The term Straight Medicaid is generally used for facilities that accept Medicaid payment without requiring a spend down; in this scenario a resident can move in if they are approved for Medicaid or are enrolled in the InnovAge PACE program, depending upon the facility.

A resident is not eligible for Medicaid at an Assisted Living Facility until they have less than $2,000 in assets and less than $2,094 per month in income. If the resident spends their assets for their care and housing at the “Medicaid approved” facility, but still has more than $2,094/month in income, the facility that accepts Medicaid will work with the resident and either allow the resident to pay the “Medicaid rate” or require that the resident pay their monthly income to the facility (and allow the resident to keep what they could keep for spending money on Medicaid – approximately $105/month).

There are a few Large assisted living facilities and numerous Residential Assisted Living facilities (also known as Personal Care and Boarding Homes) that will allow a one to two year spend down. Facilities which allow a resident to spend down, will either accept 1) Medicaid, 2) Medicaid and InnovAge, or 3) InnovAge, depending upon the facility. If a resident is enrolled in the InnovAge PACE program, facilities are reimbursed by InnovAge, and in turn, Medicaid reimburses InnovAge for the resident’s care.

If you refer to the Denver Metro Senior Blue book, it appears that there are lots of facilities that accept Medicaid, but there is one BIG caveat. Many of the facilities require an individual to pay privately for one to two years before they will accept Medicaid reimbursement. Some indicate that they accept Medicaid, but when you contact them, they actually accept InnovAge.

On another note, we also find many families are misguided and believe Medicare or supplemental health insurance will pay for care and housing. Medicare DOES NOT cover care and housing. Only private funds, Medicaid and InnovAge pay for care in Assisted Living facilities. Medicare may cover temporary stays at Rehab facilities, but never long term care at an Assisted Living Facility.

Still confused or unfamiliar with the InnovAge PACE program? Our Advisors would be happy to discuss with you what would be your best option, based on your finances and care requirements.