Introduction
It has become increasingly common for a state’s Medicaid program to pay for long-term care in assisted living facilities. This might include the coverage of personal care assistance, homemaker services, skilled nursing, and non-medical transportation. Specialized care for persons with Alzheimer’s disease and related dementias, called memory care, might also be covered. Medicaid, however, will never pay for room and board, which includes housing, utilities, and meals. So how, you might be wondering, can a Medicaid recipient (who must have limited income and assets) afford this costly expense?
Given Medicaid beneficiaries are responsible for paying their own room and board costs in assisted living residences, states commonly set room and board policies, making it more likely for one to afford these fees. Some states “cap” the amount that an assisted living provider can charge. This amount is typically well below the private pay rate, enabling assisted living residents to pay for room and board with the small amount of monthly income they have. States may also provide Optional State Supplementation, which is state-funded cash assistance, above and beyond SSI. This is intended to assist state residents in affording their living costs, including the cost of assisted living room and board in some states. Still other states allow for family supplementation, enabling friends and family to cover costs not paid for by Medicaid, such as room and board.
Medicaid recipients in assisted living facilities are generally only permitted to keep a very small portion of their monthly income for their personal needs. This is called a Personal Needs Allowance (PNA) and the amount permitted is state-specific. With the exception of the PNA, all other income goes towards room and board, and in some cases, towards assisted living services as a “share of cost”, also called a patient liability or copayment. Note: The PNA for assisted living is set by each state, not by the federal government, and these amounts can differ from Medicaid nursing home residents’ PNA.
Caps on How Much Beneficiaries Are Charged for Room & Board in Assisted Living
Some states make room and board costs more affordable for Medicaid beneficiaries by capping (limiting) the amount an assisted living residence can charge a Medicaid beneficiary. In other words, the state sets a maximum room and board rate, and assisted living providers are prohibited from charging above that amount.
Supplemental Security Income Minus the Personal Needs Allowance
Approximately 12 states set the “cap” at the maximum Supplemental Security Income (SSI) Federal Benefit Rate (FBR) minus a monthly Personal Needs Allowance (PNA). The SSI benefit rate increases annually in January, and in 2025, it is $967 / month for an individual. The amount of one’s PNA, which is the amount of monthly income a Medicaid beneficiary can keep for their personal needs, varies based on the state and may or may not increase annually. States with higher PNAs have a lower cap on room and board fees. Examples follow and are accurate for 2025.
1) In Ohio, the PNA is $50 / month. The “cap” for room and board is $917 / month ($967 – $50 = $917).
2) In Texas, the PNA is $85 / month. The capped room and board fee is $882 / month ($967 – $85 = $882).
3) In Illinois, the PNA is $120 for persons living in supportive living facilities (similar to assisted living residences). The maximum amount that one can be charged for room and board is $847 / month ($967 – $120 = $847).
4) In Georgia, the PNA is $214 / month. The room and board cap is set at $753 / month ($967 – $214 = $753).
Indiana also utilizes the current SSI rate of $967 / month in capping a Medicaid beneficiary’s room and board fee. However, after ensuring one retains $52 / month as a Personal Needs Allowance, an assisted living provider can charge up to $967 / month for room and board.
State-Specific Caps on Room & Board
Colorado sets the room and board cap for assisted living facilities (called alternative care facilities in CO) at $797 / month in 2025. This is the current SSI rate of $967 / month minus $170 / month, which is the minimum amount one may receive for a Personal Needs Allowance. As a side note, the state has a maximum PNA set at $421.46 / month, with the amount of one’s PNA based on their monthly income.
Oregon also sets a cap, and in 2025, it is $752 / month. The amount of one’s PNA, called Personal Incidental Funds (PIFs) in OR, is the amount of income that remains after deducting room and board costs, and if applicable, a service liability. Also called a share of cost, this is a payment towards one’s care services based on their income. For the majority of persons, their PIF is $215 / month.
Tennessee sets a cap of $2,320.80 / month for room and board. While this amount is much higher than the previously mentioned states, TN allows Medicaid recipients in assisted living residences to retain a Personal Needs Allowance of 300% of the SSI Federal Benefit Rate, which in 2025, is $2,901 / month. The “cap” is set at 80% of this amount (80% of $2,901 = $2,320.80.)
Social Security Optional State Supplementation / State Supplemental Programs
Some states have an Optional State Supplementation (OSS) Program, sometimes called a State Supplemental Program (SSP), that “supplements” a SSI recipient’s monthly income. Since SSI does not take into account the cost of living differences between states, a state can provide extra cash assistance via OSS to help cover the cost of state residents’ living expenses. In fact, some states have a supplemental payment rate specifically for persons living in assisted living residences. The intention is to raise the assisted living resident’s income to an amount sufficient to cover room and boards costs. Note: In some states, persons who would otherwise be eligible for SSI, except that their income is too high, may also be eligible for OSS.
In approximately 7 states, the room and board fee for Medicaid recipients residing in assisted living is set at the current SSI rate ($967 / month in 2025) plus the state-specific OSS benefit amount, minus a state-specific Personal Needs Allowance. Examples follow.
1) In Michigan, SSI recipients residing in a home for the aged (assisted living in MI) receive an OSS payment of $179.30 / month. The combined SSI + OSS payment is $1,146.30 / month. The PNA is $44 / month. Therefore, the maximum amount a home for the aged facility can charge a SSI recipient is $1,102.30 / month ($967 + $179.30 = 1,146.30 – $44 PNA = $1,102.30).
2) In California, there is a Non-Medical Out-of-Home Care Rate (NHOMC) for persons residing in a residential care facility for the elderly (assisted living in CA). In 2025, it is $1,599.07 / month and it is a combination of the federal SSI payment of $967 / month and the state supplemental payment of $632.07. Of the $1,599.07, a RCFE resident can keep $179 / month as their PNA and the remaining $1,420.07 / month must go to the RCFE for room and board. Persons who have income other than SSI may be required to pay an additional $20 / month, so a total of $1,440.07 / month.
3) North Carolina’s State and County Special Assistance (SA) Program provides cash assistance for state residents residing in licensed residential facilities, such as adult care homes (assisted living in NC). The facility agrees to accept the amount set forth by the state for SA beneficiaries. There are two rates: basic and enhanced. With the SA basic rate, the maximum rate the adult care home can charge for room and board is $1,359 / month. The full maximum benefit rate is $1,429 / month. This allows the resident to keep $70 / month as a Personal Needs Allowance ($1,429 – $1,359 = $70). The SA enhanced rate is for persons in memory care units and the maximum room and board fee is $1,743 / month. The full maximum benefit is $1,813 / month and allows the resident to maintain $70 / month as a Personal Needs Allowance ($1,813 – $1,743 = $70).
4) In Florida, the OSS program provides up to $345 / month for persons living in assisted living residences. Combined with the federal SSI rate of $967 / month, a Medicaid beneficiary residing in assisted living can receive up to $1,312 / month. After deducting a $160 Personal Needs Allowance, an assisted living provider cannot charge an OSS recipient more than $1,152 / month for room and board.
5) New York’s State Supplement Program (SSP) provides up to $694 / month for SSI recipients living in congregate care level 3 (enhanced residential care / assisted living). This, plus the federal SSI payment of $967 / month, comes to $1,661 / month ($694 + $967 = $1,661). After subtracting $255 / month for a Personal Needs Allowance, an assisted living provider cannot charge more than $1,406 / month ($1,661 – $255 = $1,406) . Note: For non-SSI recipients, assisted living providers can charge up to $1,800 / month (with the exception of a PNA of $255).
Allowing Family Members to Supplement the Cost of Room & Board
Some states allow family (which may include unrelated persons) to supplement a Medicaid recipient’s monthly income, enabling them to pay for assisted living room and board (or a portion of it) without jeopardizing Medicaid eligibility. With family supplementation, also called income supplementation, the third party makes payments directly to the facility on behalf of the Medicaid recipient. Money should never be given directly to the Medicaid recipient to make the payment, as it would likely count as income and could jeopardize their Medicaid eligibility.
Not all states allow for family supplementation. While we do not include an exhaustive list of states that permit it, Colorado and Tennessee are two state that do allow it for assisted living room and board costs. New Jersey also allows for family supplementation, but for room upgrades (from a shared room to a private room).
Note: For persons who receive SSI, family supplementation may reduce their monthly SSI benefit amount by up to 1/3. This is because SSI considers money received by an assisted living facility for room and board as “in-kind support and maintenance”, which is food and / or shelter that someone else is providing. In this specific case, someone else is paying all (or a portion) of the SSI recipient’s room and board costs. These payments are counted as income by SSI.