08/11/2026
We get a lot of calls from families regarding payments for AFC homes and what resources are available to help pay. Please see the information below if you or your loved one are considering AFC/Assisted living and have questions on how to pay for it. We are always happy to help with understanding your options.
💙 HOW CAN I PAY FOR ASSISTED LIVING?
A Family Guide to Common Payment Options in Michigan
Moving into an Assisted Living or Adult Foster Care (AFC) home is a big decision. Understanding how care can be paid for can make the process much easier.
There are several ways a person may pay for assisted living, depending on their financial situation, health needs, military history, and insurance coverage.
1. 💵 PRIVATE PAY
Private pay means the resident or their family pays the facility directly using their own income or resources.
Common sources of private-pay funds include:
- Social Security
- SSI or disability income
- Retirement income
- Pension payments
- Personal savings
- Investments
- Income from a trust
- Proceeds from the sale of a home
- Financial assistance from family members
What does private pay cover?
Depending on the facility, the monthly rate may include:
- Room and board
- Meals
- Personal care
- Assistance with activities of daily living
- Medication assistance
- Housekeeping
- Laundry
- Supervision and safety
- Activities and social programming
Important: Every facility sets its own rates and determines what services are included in its monthly charge. Families should ask for a complete fee schedule before admission.
2. 🏥 MICHIGAN MEDICAID — MI CHOICE WAIVER
Michigan's MI Choice Waiver Program is a Medicaid program designed to help eligible adults receive long-term-care services in a home or community setting rather than requiring placement in a nursing facility.
MI Choice services may be provided in qualified Adult Foster Care homes, Homes for the Aged, assisted-living settings, and other community settings.
Who may qualify?
Generally, a person must:
- Be 18 or older and meet the program's disability/age requirements.
- Be financially eligible for Michigan Medicaid/MI Choice.
- Meet Michigan's nursing-facility level-of-care requirements based on medical and functional needs.
- Require a level of assistance that would otherwise make nursing-facility care appropriate.
- Complete the required Medicaid and functional eligibility assessments.
Michigan's current 2026 HCBS information states that MI Choice has expanded financial eligibility and allows gross income up to $2,982 per month for an individual in 2026, subject to the program's rules.
Financial eligibility also involves asset/resource rules, and special rules may apply to married couples. Because Medicaid income and asset limits can change, families should have eligibility determined by MDHHS or the appropriate MI Choice waiver agency rather than relying on an old income figure.
What can MI Choice help pay for?
Depending on the person's approved care plan, MI Choice can provide Medicaid-funded services such as:
- Personal care
- Community living supports
- Nursing services
- Respite
- Transportation
- Medical equipment and supplies
- Other approved long-term-care services
⚠️ Important: Medicaid does NOT necessarily mean "free assisted living."
MI Choice pays for approved Medicaid services, not simply the entire cost of living in an AFC home.
Room and board is generally a separate financial responsibility. Michigan specifically states that its Adult Community Placement program does not pay the room-and-board portion of care, and MI Choice documentation distinguishes covered services from room and board.
A resident may therefore use Social Security, SSI, pension income, or other income to help pay room and board while Medicaid helps with eligible care services.
Also important: Not every AFC or assisted-living home participates in MI Choice. Families should ask the facility and the local MI Choice waiver agency about participation and availability.
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3. 🇺🇸 VETERANS BENEFITS
Veterans and surviving spouses may have additional resources available through the U.S. Department of Veterans Affairs (VA).
One benefit families should investigate is Aid and Attendance (A&A).
Aid and Attendance can provide an additional monthly payment to qualifying Veterans or survivors who need help with activities of daily living or meet other qualifying requirements.
Aid & Attendance may be especially helpful for someone who:
- Needs assistance with everyday activities
- Requires help with bathing, dressing, toileting, eating, or mobility
- Is substantially confined to their home because of disability
- Meets the VA's applicable service, financial, medical, and other eligibility requirements
The benefit is generally an additional monthly payment, rather than a promise that the VA will pay the entire assisted-living bill.
The VA also recognizes assisted living and residential settings as possible locations where eligible Veterans may receive certain long-term-care services.
Families should ask:
"Is the resident or their spouse a Veteran?"
If the answer is yes, it is worth contacting the VA or an accredited Veterans service representative to determine whether benefits may be available.
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4. 🛡️ LONG-TERM CARE INSURANCE
Some individuals purchased Long-Term Care (LTC) Insurance specifically to help pay for care later in life.
Many comprehensive LTC policies can provide benefits for care received in:
- Assisted living facilities
- Adult residential care settings
- Nursing homes
- The individual's home
- Adult day care
- Hospice or respite settings
How does it work?
Every policy is different.
A policy may specify:
- A daily or monthly benefit amount
- A maximum lifetime benefit
- An elimination/waiting period
- Specific eligibility requirements
- Covered types of care
- Whether assisted living or AFC care is covered
- Whether the facility must meet particular licensing requirements
Most policies require the policyholder to meet certain benefit triggers before payments begin.
Families should contact the insurance company and ask:
"Does this policy cover care in a Michigan Adult Foster Care or assisted-living setting?"
They should also ask:
- What is the daily/monthly benefit?
- Is there an elimination period?
- What documentation is required?
- Does the policy pay the facility directly or reimburse the resident?
- Is there a lifetime maximum?
- Does the policy have inflation protection?
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🚫 5. MEDICARE DOES NOT PAY FOR ASSISTED LIVING
This is one of the most important things for families to understand.
Medicare does NOT pay the monthly room-and-board cost of an assisted-living or AFC home.
Medicare generally does not cover long-term custodial care, which includes ongoing assistance with activities such as bathing, dressing, eating, toileting, and other daily activities.
Medicare may still pay for certain medical services a resident receives while living in an assisted-living setting when those services are otherwise covered by Medicare.
For example, a resident may continue to use Medicare for:
- Doctor visits
- Hospital services
- Prescription medications
- Certain medical equipment
- Covered therapy or skilled services
But Medicare does not pay the assisted-living monthly rent/room-and-board charge or ongoing custodial care simply because someone has Medicare.
Remember:
Medicare ≠ Assisted Living Payment
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💡 OTHER POSSIBLE RESOURCES
Depending on the individual's circumstances, families may also want to investigate:
🏠 Home Sale or Home Equity
Selling a home or using available home equity may provide funds for assisted living.
👨👩👧 Family Assistance
Family members sometimes contribute toward monthly care costs.
💰 Trusts & Investments
Certain financial assets may be used to help cover private-pay expenses.
📋 Social Security / SSI / Pension
Monthly income can often be used toward room, board, and care expenses.
🏛️ Other Michigan Programs
Michigan has additional Medicaid and community-based programs that may be appropriate depending on the person's age, disability, medical needs, and financial circumstances.
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⭐ QUICK COMPARISON
Payment Source| May Help With Care?| May Pay Room & Board?| Important Notes
Private Pay| ✅ Yes| ✅ Yes| Resident/family pays directly
MI Choice Medicaid Waiver| ✅ Yes, for approved services| ⚠️ Generally no| Must meet financial & nursing-facility level-of-care requirements
VA Benefits| ✅ May help| ✅ Benefit may be used toward living expenses| Eligibility requirements apply
Long-Term Care Insurance| ✅ Often| ✅ Depending on policy| Check the individual policy
Medicare| ⚠️ Limited medical services| ❌ No| Does not pay for long-term assisted-living care
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📞 WHAT SHOULD FAMILIES DO FIRST?
If you're unsure how care will be paid for, start by identifying all possible sources of funding.
Ask these questions:
☐ Does the resident have Social Security, SSI, a pension, or retirement income?
☐ Does the resident have long-term care insurance?
☐ Is the resident or their spouse a Veteran?
☐ Could the resident qualify for Michigan Medicaid?
☐ Does the resident appear to need nursing-facility level of care?
☐ Does the chosen AFC/assisted-living home accept MI Choice participants?
☐ What is included in the facility's monthly rate?
☐ Are there additional charges for higher levels of care?
☐ How much will the resident be responsible for paying each month?
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❤️ A FINAL REMINDER
Every person's situation is different.
Eligibility for Medicaid, Veterans benefits, and long-term-care insurance depends on individual circumstances and program/policy requirements.
Families should verify eligibility directly with the appropriate agency or insurance company before making financial or placement decisions.
The information in this handout is intended for general educational purposes and is not legal, financial, insurance, or Medicaid eligibility advice. Program rules and financial limits can change.
Helpful official resources
Michigan Medicaid / MI Choice:
"Michigan Department of Health & Human Services — MI Choice Waiver" (https://reference-url-citation.invalid/9)
Michigan AFC/HFA information:
"Michigan Department of Licensing and Regulatory Affairs — AFC/HFA" (https://reference-url-citation.invalid/10)
Veterans Benefits:
"U.S. Department of Veterans Affairs — Aid & Attendance" (https://reference-url-citation.invalid/11)
Medicare long-term care information:
"Medicare — Long-Term Care Coverage" (https://reference-url-citation.invalid/12)
Long-Term Care Insurance:
"Administration for Community Living — Long-Term Care Insurance" (https://reference-url-citation.invalid/13)
