Elder Care Facilities: What Happens when the Money Runs Out?

elder care facility

Article written by Elaina Mellert.

Whether for for-profit or nonprofit, assisted living facilities operate as business establishments and often have terms in the lease regarding evictions if a resident does not pay. Medicaid Waivers for assisted living do not cover room and board even when they are accepted. The best way to ensure an eviction does not happen is to find carefully review all the costs associated with the facility (monthly, one time, annual, etc.). Some facilities will charge extra for services such as delivering a resident their meal from the cafeteria. Additionally, one should be aware of any future increases in expenses. For instance, level of care costs usually exist in tiers, so if the resident needs a higher level down the line, monthly costs will likely increase. 

Nursing homes will continue to house those who have run out of money if they have already begun the application process for Medicaid. This means that even if Medicaid had not yet been approved, the resident still has a right to continue living in the nursing home. However, it is still highly-advisable to plan the Medicaid application process well in advance of the money running out to avoid Medicaid transfer penalties that can delay the approval of benefits. This highly-controlled process of “going broke” is called a Medicaid spenddown. The spenddown rules are complex, so it is wise to consult an elder law attorney to plan out the process in detail.

The 30-day window given for typical evictions is not long enough for a Medicaid application to be approved. Medicaid approval times vary state by state, however, the federal guideline states 45 to 90 days. Virginia and DC fall within the federal specified timeframe. Maryland does not give an estimated range on a statewide basis, but the turnaround time in some counties (such as Montgomery) is often much faster than 45 days. Make sure to discuss any concerns with the nursing home prior to needing Medicaid to avoid any issues further down the line. It is always helpful to confirm whether the facility accepts Medicaid and if they have anyone on staff that is knowledgeable about the process. 

Overall, the acceptance Medicaid is an important factor when determining the best elder care facility. It will tie into the overall cost of the facility and will ease the financial burden of elder care. Consult an elder law attorney if you believe that you or a loved one qualifies for Medicaid at a nursing home. 

Medicare may also cover some of the healthcare costs for resident, however, Medicare does not usually cover room and board. In some cases, Medicare for housing is accepted in the short term at nursing homes for instances such as rehabilitation after an injury. After a certain period of time, Medicare will no longer cover a resident’s stay and Medicaid will be needed if the resident qualifies. Medicaid helps those in the long term who do not have the financial means to pay for an elder care facility themselves.

Choosing the Best Elder Care Facility: Things to Consider

Which type of facility is best?

If the need for Medicaid benefits is a foreseeable possibility, it is very important to confirm that the facility being considered is registered with the state as a nursing home and not as an assisted living facility. Nursing homes and assisted living facilities typically operate differently in terms of level of care, price, etc. though assisted living facilities can offer an elevated level of care approaching that of a nursing home, such a facility is not a nursing home for Medicaid purposes unless the state deems it one. 

If Medicaid is not a foreseeable need, an assisted living facility might prove a better fit (or at least a better fit for now). To determine which facility suits the needs of an elder individual best, one must consider the differences. An assisted living facility allows a resident to be more independent while still receiving a degree of care. Nursing homes are better suited for those who cannot take care of themselves and need more help with daily activities. 

Of course, a resident of an assisted living facility can always transition to a nursing home as needs change. In fact, often the only way for assisted living residents to quickly get approved for Medicaid is to transition to a state-licensed nursing home. It is therefore not a bad idea to ask if the company that operates the assisted living facility of choice if they also operate a nursing home as that fact may ease a future transition.


The price of different facilities varies depending on location. Even at the highest level of care, assisted living facilities are typically much cheaper than nursing homes because they maintain a lower level of on-site health care staffing, and, therefore, cost less to operate. However, nursing homes do accept Medicaid to help with the cost while assisted living facilities do not so a nursing home would be cheaper to qualified Medicaid applicants. That being said, a qualified Medicaid applicant in the D.C. area probably could not afford either option without substantial family assistance.


While this ties into price, location should also be considered when choosing the best facility. Being close to family may help residents adapt to their new living situation better. Additionally, facilities sometimes offer resident transportation to and from locations that are nearby (such as doctors’ offices and grocery stores). 

Level of Care

 The level of care needed for the individual varies is crucial when determining the best type of facility for them. Along with nursing homes, assisted living facilities have different levels of care depending on the needs of the resident. Some facilities may not offer the level of care an elderly individual needs.

Dementia patients require a high degree of care on a daily basis. Many facilities, including both assisted living facilities and nursing homes, offer this type of care for residents with dementia. A neurologist or primary care provider can assess early symptoms of dementia by administering a simple cognitive test, often labeled a “mini cog” or “mini mental state exam (MMSE).” These tests are not sufficient enough on their own to determine a dementia diagnosis and are only used in conjunction with other tests such as a brain scan (Alzheimer’s Society, 2022). 


When touring a facility, pay attention to the residents, their moods, and how engaged they are with the staff and facility activities. This is an indication of how the facility operates on a day-to-day basis. Touring a facility also allows you to experience the quality of the facility itself, instead of relying on the pictures they posted online. 

Follow up the tour with an online search looking for negative news reports or complaints posted by family members. Tragically, elder abuse is a real danger, though the extent of the problem is difficult to quantify due to inadequate reporting systems. (U.S. Govt. Accountability Office, 2018).


When beginning to look for a good facility, start out by determining the proper budget and needed level of care. From there, evaluate the best type of facility that fits the requirements. Look further into the specific type of facility chosen including the location and quality of care given. After deciding on a facility, it is always a good idea to tour before signing any paperwork. A tour provides more insight into the resident rooms and common areas as well as the overall quality of the facility and how they operate. It also gives you the opportunity to ask more questions and to make observations about resident care.

Good Questions to Ask and Keep in Mind

Do they have quality meal options? What times are they provided? 

Is Medicaid accepted? If so, to what extent?

What does each level of care include? 

What are the additional pricings for higher levels of care? 

Does the facility have an in-house doctor? 

Do any doctors visit the facility for check-ups and if so, how often do they visit?

Is there any transport to doctor’s appointments and grocery stores?

Are they equipped well enough for the resident to live safely and comfortably? What, if any, additional accommodations can be provided? 

What is the ratio of staff to residents?

Medication management- What are the policies regarding administering medication to the residents?

What is the response time for the emergency button? Many elder care facilities have emergency buttons that residents can use when they need help (ie. such as falling). 

What kind of activities does the facility offer to residents? How engaged do residents seem during these activities? 

If a higher level of care is needed in the future, are there any options that would provide that? (For assisted living, it depends on the facility- some have dementia/end of life care, some do not)

Does the company operating the assisted living facility also operate nursing homes nearby? If so, how do you assist with transition? 

A good resource to start looking for facilities is the Medicare website.

Works Cited

United States Government Accountability Office (2018). Medicaid assisted living services: Improved federal oversight of beneficiary health and welfare is needed. GAO-18-179, MEDICAID ASSISTED LIVING SERVICES: Improved Federal Oversight of Beneficiary Health and Welfare Is Needed

Alzheimer’s Society (2022). Tests and scans used to diagnose dementia. 


Patrick Klemz

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