What happens when the money runs out in memory care?

First, which kind of place is it?

"Memory care" is a kind of care, not a legal category. It is offered in two very different settings, and the rules that protect a resident depend on which one your parent is in.

• Assisted living, often with a memory care unit. The Alzheimer's Association points out that assisted living is not federally regulated, and that its definition varies from state to state.
• A nursing home. Nursing homes are licensed by the state and regulated by the federal government.

If you are not sure which one your parent's facility is, ask. The license will say.

If it is a nursing home

Nursing home care is a required Medicaid benefit for people who qualify. Medicaid.gov says that states "may not limit access to the service, or make it subject to waiting lists."

A nursing home that takes part in Medicare or Medicaid must also follow a federal rule on discharge. It may move a resident out only for a short list of reasons. Not being paid is one of them, but the rule is specific about what that means:

Non-payment applies if the resident does not submit the necessary paperwork for third party payment or after the third party, including Medicare or Medicaid, denies the claim and the resident refuses to pay for his or her stay.42 CFR 483.15(c)(1)(i)(E)

The same rule gives a resident several protections:

• Written notice at least 30 days before a discharge, in most cases.
• A notice that states the reason, explains the resident's right to appeal, and gives the contact details of the state's Long-Term Care Ombudsman.
• For a resident who becomes eligible for Medicaid after moving in, the facility may charge only what Medicaid allows.
• The facility "must not request or require a third party guarantee of payment" as a condition of admission or of staying. In plain terms, a nursing home cannot make admission depend on a relative agreeing to pay from their own pocket.

Not every nursing home takes Medicaid. The National Institute on Aging lists Medicare and Medicaid certification among the first things to look for on a visit.

If it is assisted living or memory care

Here there is no single federal rulebook. What happens is decided by your state's rules and by the contract your family signed. Three facts shape most situations.

Medicaid may help with care, in some states. The National Institute on Aging says care in assisted living is "almost always paid for out of pocket", and that "in some states, Medicaid may cover some costs for people who are eligible."

That help does not cover room and board. A federal rule bars the federal share of Medicaid's home and community-based money from paying for room and board, with narrow exceptions. So even with Medicaid, part of the monthly bill still has to come from somewhere.

Each facility decides whether to take part. The Alzheimer's Association notes that some communities accept Medicaid and others do not. The assisted living industry's own figures put the share of residents who rely on Medicaid for daily services at almost 1 in 5.

State law usually sets some ground rules for the contract. In Florida, for example, the statute on assisted living contracts requires the contract to set out the services and the rates, to provide for at least 30 days' written notice of a rate increase, and to include a refund policy. Other states have their own versions. Ask the facility which state rules apply to its contract.

What can happen next

When private money is close to running out in assisted living or memory care, families generally face one of these:

1. The facility accepts Medicaid and has a place. If your parent qualifies under the state's rules, they may be able to stay, with Medicaid helping to pay for care.
2. The facility does not accept Medicaid, or has no place. Your parent may need to move, either to a facility that does accept it or to a nursing home.
3. The family makes up the difference. Some families choose to pay the gap for a time so that a parent does not have to move.

Which one applies is usually settled by what the facility told you, or did not tell you, before you signed. That is why the questions belong at the start. Here is the list.

Who can help if a facility says your parent has to leave

• The Long-Term Care Ombudsman. Every state has one. The program works to resolve problems related to the health, safety, welfare, and rights of people who live in nursing homes, assisted living, and other residential care. Find yours at theconsumervoice.org/get_help.
• An elder-law attorney in your parent's state, who can read the contract and the notice.
• The Eldercare Locator, for local services: 1-800-677-1116.

Why the date matters

Almost everything above goes better with time in hand. Medicaid has its own rules, including a review of gifts and transfers made in the 60 months before an application. An attorney can only help with what is still ahead of you.

So the most useful thing to know is not a rule. It is a date: the month your parent's money stops covering the bill. This guide shows how to work it out.

A simple timeline

• Before you sign with a facility. Ask, in writing, whether it accepts Medicaid, after how long, and what happens to a resident whose money runs out.
• With a year or more of money left. See an elder-law attorney. Bring the figures, the contract, and a list of any gifts made in the last five years.
• With six months left. Confirm the facility's position again, in writing. If a move may be needed, start looking while there is still a choice.
• Every quarter. Re-check the balances and the bill. A rate increase or a change in care level moves the date.