November 24, 2025
The policies adopted by states for the licensing of assisted living communities “are critical in ensuring that regulations and payment sources support the expansion of Medicaid-financed AL services,” according to the authors of a study in press for JAMDA–The Journal of the Post-Acute and Long-Term Care Medical Association.
“Expanding access to Medicaid-funded AL is particularly important given recent findings indicating fewer adverse health events for older adults enrolled in HCBS [home- and community-based services] living in AL than in the community,” wrote the researchers, from educational institutions in the United States and Australia. “Recent federal legislation substantially reduces federal Medicaid funding, possibly limiting states’ ability to maintain Medicaid-covered AL services and decreasing access to affordable AL,” they noted.
Under the Medicaid program, states are required to cover nursing facility care, but they can choose whether to provide most HCBS, so HCBS are vulnerable to federal and state budget cuts.
The study, the authors said, “underscores the importance of aligning licensure with Medicaid payment policies to increase accessibility and affordability for low-income older adults.”
89% versus 44%
The researchers found that in 2019, 89% of licensed assisted living communities in the United States had a license that allowed Medicaid payments, yet according to the 2020 National Postacute and Long-term Care Survey, only 44% of assisted living communities are “Medicaid-certified.”
“Thus, although most AL communities were eligible to accept Medicaid payments, they may not have had a provider agreement or contract established with the state,” they wrote.
The authors examined 2019 data for almost 33,000 licensed assisted living communities across all 50 states and Washington, DC, and they analyzed six mechanisms that states use to finance the care provided in assisted living: 1915(b), 1915(c) and 1115 HCBS waivers as well as 1905(a), 1915(i) and 1915(k) state plan amendments.
Most (89%) of the assisted living communities were eligible to pursue a Medicaid contract through one or more options, the authors said, with 78% of the communities eligible for 1915(c), 35% for 1915(b), 33% for 1915(i), 14% for 1115, 13% for 1905(a) and 9% for 1915(k). Forty-one percent of the communities were eligible for two or more of those Medicaid payment options.
In Alabama, Kentucky, Louisiana, Virginia and West Virginia, no Medicaid-reimbursed assisted living existed in 2019, according to the researchers. In 45 states and the District of Columbia, an HCBS waiver, 1115 demonstration or a combination of mechanisms were used to enable Medicaid payment in assisted living communities, the authors said. In 13 states, however, according to the study, only some license types allowed for Medicaid payment in assisted living.
“Assisted living communities operating under a license type that granted Medicaid contract eligibility had a smaller average capacity than those operating under licenses that did not allow for Medicaid payment,” the authors noted.
Research in the future, they said, “should investigate the barriers to Medicaid acceptance in eligible AL communities, residents’ participation in Medicaid programs, and impact of Medicaid participation on residents’ access and health outcomes.”