Medicaid & Adult Day Care: State by State Benefits & Eligibility

Medicaid’s Benefits for Adult Day Care

Does Medicaid pay for adult day care? In a word, yes. However, a better question might be, Under what circumstances will Medicaid pay for adult day care, and is my loved one eligible? To answer this question requires some background information about Medicaid.

First, it is important to think of Medicaid not as a single program, but rather as a collection of many different programs. Not only does each state have their own rules with regards to Medicaid’s benefits, but each state typically has several different Medicaid programs, all of which have their own policies for adult day care coverage.

Finally, the target group of the Medicaid program also impacts eligibility. As an example, seniors must meet one set of eligibility criteria. Adults aged 18-64 have to meet a second, differing set of eligibility criteria. And the developmentally disabled a third set.

Medicaid Waivers

The state Medicaid programs most likely to cover adult day care are called Medicaid Waivers. There are several versions of waivers. One may find these referred to as HCBS Waivers, 1915(c) Waivers, 1115 Demonstration Waivers, or Home and Community Based Waivers. Historically, long-term care Medicaid was provided only in nursing homes. However, Medicaid waivers now allow states to offer long-term care Medicaid services outside of nursing homes to individuals who generally require a nursing home level of care but who live at home.

It is under these waivers that most individuals receive assistance from Medicaid for adult day care. There are waivers that cover adult day care in most states. Furthermore, those states that do not cover adult day care through a Medicaid waiver offer alternative public funding for adult day care. A major advantage of Medicaid waivers is they almost always have higher monthly income limits than do regular Medicaid programs. A downside of waivers is that they have enrollment caps and very often there are waiting lists.

Regular / State Plan Medicaid

To a lesser extent, “regular Medicaid” or Medicaid State Plans, offers adult day care as a benefit. Presently, approximately 15 states and the District of Columbia cover adult day care services via their Medicaid State Plan. State Plan Medicaid is an entitlement. This means that those persons who meet the eligibility requirements are entitled to receive the benefits.

As mentioned above, this is not the case with Medicaid waivers, which have a limited number of slots. Stated differently, persons can meet the eligibility requirements and still be “wait-listed” to receive benefits. The downside to State Plan Medicaid (when compared to waivers) is that very often the monthly income limit for eligibility is considerably lower than is the limit for Medicaid waivers.

Medicaid Adult Day Care Eligibility

Every Medicaid program in every state has its own eligibility considerations. Generally speaking, most adult day care is provided under Medicaid waivers. Eligibility for waivers considers the applicant’s income and financial resources, as well as their functional ability. In most states, waivers require the participant to be in need of nursing home level care.

In 2024, most waivers limit the participant’s monthly income to less than $2,829. Excluding the value of their home, their countable assets are limited to $2,000 for the majority of states. (California is one exception, where there is now no asset limit.) Applicants with resources or income in excess may be able to qualify for Medicaid by working with a Medicaid planning professional.

Eligibility for Medicaid-funded, adult day care under a Medicaid state plan is both less and more restrictive than with a waiver. Applicants do not necessarily need to require nursing home level care. This is good news for persons with Alzheimer’s or dementia who require supervision, but not 24 / 7 care.

Financially, the asset limit is the same as with Medicaid waivers, but the monthly income limit is likely more restrictive. Typically, it is pegged to the Supplemental Security Income benefit rate ($943 / month in 2024 for a single applicant or $1,415 for a married couple), or 100% of the Federal Poverty Level ($1,255 / month in 2024 for a single applicant or $1,703.33 for a married couple). Again, as with waivers, there is some flexibility when calculating what qualifies as monthly income.

Types of Adult Day Care Benefits

Before a discussion of the state by state benefits, it is helpful to have additional background information on what defines adult day care and what different types of adult day care exist. Medicaid in your state may cover some types of adult day care and not others.

Generally speaking, adult day care involves the day-time supervision of needy individuals in a group environment in a center or location. There are three types of adult day care. Each type may be referred to by several different names.

1. Social Adult Day Care – sometimes called Adult Day Services or abbreviated ADC or ADS, provides non-medical supervision. The focus is on maintaining health through recreational and social activities and nutritious meals.

2. Adult Day Health Care – also called Adult Day Medical Care or ADHC, provides a higher level of care services with trained nurses on staff. In addition to activities and meals, physical, occupational, and speech therapies may be provided. In addition, assistance with the activities of daily living, with medical equipment, and medication administration is provided.

3. Specialized Adult Day Care – typically for Alzheimer’s patients, this may even be referred to as Alzheimer’s Day Care or Day Treatment. Though usually it is open to individuals with most forms of dementia. In Alzheimer’s Day Care, there is an additional focus to prevent wandering, injury and behavioral challenges.

While these distinctions exist, in practice and in different states, the lines between these types of adult day care may not be so clear. Often times, one center will provide all 3 types of care.

Regardless of the Medicaid program or waiver from which one receives the adult day care benefit; all programs will put limits on the amount of adult day care the beneficiary can receive.  Limits are typically dependent on the individual.  However, one can expect a maximum of 8 hours per day / 5 days per week.

Coverage Reasoning

Why does Medicaid cover the cost of adult day care?  Medicaid is usually thought of as the major payer of nursing home care for low income, elderly individuals.  Why then do these programs cover the cost of adult day care?  Medicaid, like most government programs, is under pressure to contain its costs.  By paying for adult day care, Medicaid helps many families care for loved ones at home.  In doing so, this reduces the number of nursing home admissions that are paid for (or will eventually be paid for) by Medicaid.  Therefore, paying for adult day care is, in fact, a cost saving measure for most Medicaid programs. This is because the cost of adult day care is minor when compared to the cost of full-time nursing home care.

State by State Guide to Medicaid’s Adult Day Care Benefits

The following information is current as of August 2022. It should be emphasized that even though Medicaid will pay for adult day care in every state, it is not always the best source of funding. Medicaid’s reimbursement rates for adult day care are not high and not all adult day care centers will accept Medicaid enrollees. Readers are encouraged to consider both Medicaid and the alternative options available to them in each state (listed in the column on the right side of the table).