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Does Medicaid Pay for Adult Day Care?
Medicaid Might Reimburse for Adult Day Care

Adult day health centers deliver organized outpatient programs for health, therapy, social services and activities to people needing care.

Individual states establish the specific requirements for Medicaid reimbursement of adult day health services.

In order for Medicaid to reimburse for adult day health services they must meet:

  1. ordered or requested by a physician or other medical practitioner
  2. provided to eligible beneficiaries determined by a patient assessment
  3. included in a plan of care
  4. rendered by staff whose qualifications meet the state licensing requirements
  5. supported by appropriate documentation

Does Medicaid Pay for Adult Day Care

Adult Day Health Care
Adult Day Health Care

The state Medicaid programs that apply to adult day care are the Medicaid Waiver programs. In the past, the only long-term care paid by Medicaid was nursing home care.

Medicaid waivers allow states to offer Medicaid paid-for services outside of nursing homes to individuals who live at home. It is under these programs that most individuals receive assistance from Medicaid for adult day care.

Most waivers have enrollment caps and long waiting lists exist. So, you and your loved needing adult day care assistance, may need to wait to receive the services. While you wait, you can find good affordable adult day care in your area - and they can direct you in locating financial assistance to pay for it.

State Medicaid Coverage of Adult Day Health Services

State Medicaid programs cover adult day health services, including section 1915(c) home and community-based services waivers, optional State plan benefits, and home and community-based state plan benefits.

Most states provide adult day health services through one or more section 1915(c) home and community-based services waiver(s). Section 1915(c) waivers allow States to target services to the population thought most likely to benefit. To be eligible for 1915(c) waiver services, beneficiaries must require an institutional level of care, like a nursing home.

State Medicaid programs pay for services:

  • Personal care services
  • Physical therapy
  • Nursing services

The Medicaid State plan benefit is available to all eligible Medicaid beneficiaries who meet the conditions of coverage. These state requirements for eligibility:

  • Coverage of services
  • Physician orders
  • Plans of care
  • Documentation of services
  • Provider qualifications

All states require that Medicaid adult day health services be:

  1. ordered or requested by a physician or other medical practitioner
  2. provided to eligible beneficiaries, as determined by a patient assessment
  3. included in or consistent with a plan of care
  4. rendered by staff whose qualifications and/or supervision meet state licensing requirements
  5. supported by appropriate documentation; progress notes,flowcharts, and treatment logs
  6. beneficiaries meet attendance requirements

Individual Services in Beneficiary's Plan of Care

  • nursing
  • physical therapy
  • occupational therapy
  • speech-language pathology
  • therapeutic activity
  • recreational/social activity
  • assistance with activities of daily living (ADL)
  • dietician/nutritionist education
  • meal
  • snack
  • mental health/psychiatric service
  • pharmacy service
  • social work service

Adult day care is not usually covered by Medicare, but there is some financial assistance available through a federal or state programs like Medicaid, Older Americans Act, or Veterans Administration that pays for adult day care on a limited basis.

Program of All-Inclusive Care for the Elderly (PACE)

There's a program called the Program of All-Inclusive Care for the Elderly (PACE) that Medicaid partners with Medicare to sponsor comprehensive home and community care, including adult day care,

It's an alternative program for frail elders who would otherwise require nursing home care.

PACE is only available in certain states and in those states, eligibility for the PACE program has restrictions. PACE is primarily for low-income seniors who are eligible for both Medicare and Medicaid.

PACE helps people get needed health care services in the community instead of moving to a nursing home or another care facility.

With PACE, a team of health care professionals work with you and your family to receive the care you need. The PACE team has experience in giving care.

When a person enrolls in PACE, one's required to use a PACE-preferred doctor who is best suited to help you make health care decisions.

Who qualifies to receive PACE?


You can have either Medicare or Medicaid, or both, to join PACE. PACE is only available in some states that offer PACE under Medicaid. To qualify for PACE, you must:

  • Be 55 or older
  • Live in the service area of a PACE organization
  • Need a nursing home-level of care (as certified by your state)
  • Able to live safely at home with help from PACE

Learn more about PACE.

What does PACE cover?

The care and services covered by Medicare and Medicaid using PACE:

(If your health care team decides you need care and services that Medicare and Medicaid doesn't cover, PACE may still cover them.)

Here are some of the services PACE covers:

  • Adult day primary care (including doctor and recreational therapy nursing services)PACE Covered Services
  • Dentistry
  • Emergency services
  • Home care
  • Hospital care
  • Laboratory/x-ray services
  • Meals
  • Medical specialty services
  • Nursing home care
  • Nutritional counseling
  • Occupational therapy
  • Physical therapy
  • Prescription drugs
  • Preventive care
  • Social services, including caregiver training, support groups, and respite care
  • Social work counseling
  • Transportation to the PACE center for activities or medical appointments, if medically necessary

Find out if you qualify for PACE - Medicaid website.

To learn more about Medicaid payment for care costs, contact your State Medicaid Office.

Dependent Care Tax Credits

What many people do not realize is that dependent care tax credits are available to the caregiver. In order to claim this tax credit, you must meet each of following criteria:

  • Your child or dependent must meet certain qualifications
  • Your daycare provider must meet certain qualifications
  • You must have earned income
  • The care provided must enable you to work or to look for work
  • You must reduce your eligible daycare expenses by any amounts provided by a dependent care benefits plan through your employer

There are other rules in place to meet the guidelines for dependent care credit so speak to your personal accountant for more information.

To find out if your state offers Medicaid Waivers for Adult day care - contact your local AoA.

Health Care Reform Bill

The Health Care Reform Bill means that more people will be eligible for Medicaid services like adult day care. Access to these services will also be improved in the following ways:

  • 6% additional federal funding will go to states for home and community-based individual care
  • Eligibility for spousal Medicaid for home and community-based services will match nursing home eligibility requirements
  • States will get more funding for the expansion of Medicaid to 133%
  • The bill expands services of Aging and Disability Resource Centers, meaning more people will have access to services
  • The Community Living Assistance and Support (CLASS Act) provision will establish a national insurance trust. In 5 more years, the trust will pay for services including adult day care.
Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.