When a parent runs out of money in assisted living, the community can eventually end the residency agreement for nonpayment, but state rules set the process. Minnesota, for example, requires 30 days' written notice, a prior meeting, appeal rights and a coordinated move. Start early: check whether the community accepts Medicaid, apply for benefits, and call the ombudsman if a notice arrives.
Often you can see it coming well ahead: the savings balance drops a little faster each quarter, a care-level increase takes a bigger bite, and the math stops working. That's the best time to act, because every option (Medicaid, VA benefits, a different apartment, family help) takes time to set up. This post covers the warning signs, the contract terms to check, what to apply for and when, how to talk with the community, and your parent's protections if a discharge notice comes.
How to see it coming
Run the numbers every quarter. Two figures tell you most of what you need: the monthly gap (total costs minus income) and the runway (savings divided by the gap). The assisted living budget post walks through both.
Warning signs to act on:
- The runway, counting yearly rate increases, is shorter than the time it would take to arrange the next option (a Medicaid approval, a house sale, a benefit claim, a move).
- A care-level change has raised the bill and is likely to stay.
- Savings are being drawn from accounts you had planned to keep for later.
- A family member has been quietly covering shortfalls.
Any one of these is a reason to start the steps below now, not when the account is empty.
What the residency agreement says about running out
Pull out the residency agreement and look for four things:
- Nonpayment terms. How many days late before a notice? What notice period?
- Medicaid participation. Does the community accept Medicaid or waiver payments? How many apartments?
- Private-pay period. Some communities require a set period of private payment before accepting Medicaid. Minnesota's standard disclosure form even includes a place for the community to state how many months it requires.
- Staying in place. If your parent switches to Medicaid, can they keep the same apartment, or must they move to a different unit?
Note, too, how much notice your parent must give to move out. If the family decides on a move before the money is gone, that notice period decides when the last private-pay month falls.
If the agreement is silent or unclear, ask the business office to answer in writing.
Benefits to check early, and why early matters
Each of these takes time, which is why the runway matters more than the balance.
| Option | First step | Why start early |
|---|---|---|
| Medicaid (care services in assisted living) | Call the state Medicaid agency or the Area Agency on Aging; ask which program covers assisted living | Care-need, income and asset tests; a 60-month look-back on asset transfers; possible waitlists for waiver slots |
| VA pension with Aid and Attendance | Call a VA-accredited representative | Wartime service, need and financial tests; assisted living costs can count as medical expenses |
| Long-term care insurance | Check whether a policy exists and whether it has been claimed | Benefit triggers and an elimination period before payment |
| Family contributions | A family meeting with the numbers | Needs agreement and clear records |
About Medicaid specifically: as of March 2025, 44 state Medicaid programs covered assisted living services, according to a 2026 GAO report, but Medicaid can't pay room and board, and waiver programs let states limit enrollment. When your parent applies for long-term care coverage, the state reviews asset transfers from the previous 60 months, according to CMS, and transfers for less than fair market value can delay coverage. That's why it's worth talking to an elder law attorney before money is moved or the house is sold. Details are in does Medicaid pay for assisted living, and the VA route is in VA Aid and Attendance and assisted living.
To find local help, the Eldercare Locator, a public service of the Administration for Community Living, connects families to their Area Agency on Aging.
Talk to the community before you fall behind
A conversation six months before the money runs out gives everyone options. A conversation after two missed payments gives fewer. Ask the executive director or business office about:
- Moving to a smaller or shared apartment
- A different care package, if some services could be adjusted
- Whether a Medicaid apartment is available now or expected
- A short payment arrangement while a benefit application or house sale is pending
What to say to the executive director: "I want to raise something early. At the current rate, my mother's savings will run out in about eight months. We're applying for Medicaid and checking VA benefits. I'd like to understand our options here: can she stay in her apartment if Medicaid is approved, is there a smaller unit, and what happens if the approval takes longer than we hope?"
Write down what you're told, with names and dates, and ask for anything important in writing.
Plan the next step before it's urgent
Parent Move Plan Complete includes a shared costs log and a weekly check-in agenda, so the family reviews the numbers together and decides early. If a move becomes necessary, the day-by-day plan counts every task back from the new move-in date.
Build your plan in 2 minutesIf a discharge notice arrives
Don't ignore it, and don't assume it's final. Protections come from state law and the residency agreement, and they differ. Minnesota's law (Minnesota Statutes 144G.52) shows what strong protections look like:
- For nonpayment, the facility must give written notice at least 30 days before the termination date.
- An interruption in public benefits of no more than 60 days doesn't count as nonpayment.
- Before issuing a notice for nonpayment, the facility must meet with the resident and representatives at least seven days beforehand.
- The notice must tell the resident that public benefits may be available and give contact information for the state's senior help line, state the right to appeal, and include the ombudsman's contact information.
- The facility must send a copy to the Office of Ombudsman for Long-Term Care and must take part in a coordinated move to another provider.
Whatever your state, the steps are the same:
- Read the notice for the reason, the effective date and any appeal instructions.
- Call the long-term care ombudsman the same day. The program advocates for assisted living residents, handles complaints including improper discharges, and its services are free and confidential. The long-term care ombudsman post explains how to reach yours.
- Ask the state licensing agency what notice and appeal rules apply.
- Contact an elder law attorney if the notice seems improper or benefits are pending.
- Keep paying what you can, and document every payment and conversation.
If your parent has to move
If staying isn't possible, the goal is a safe, planned move rather than a rushed one. Options depend on your parent's needs and benefits: a community that accepts Medicaid, a smaller residential care home, a return to family with home services, or, if care needs qualify, a nursing facility. Tour with the same questions you used the first time, and ask each place directly about Medicaid.
Before choosing, get four answers in writing from the new place: its full fee schedule, whether it participates in Medicaid and has an opening, whether it requires a private-pay period first, and whether it can meet your parent's care needs now and at the next level. That keeps the family from facing the same problem again a year later.
If siblings will contribute to bridge the gap, agree in writing who pays what; splitting caregiving costs with siblings covers that conversation. Throughout, keep your parent in the decision. It's their home, even if it's the second one in a few years.
Frequently asked questions
Can assisted living evict my parent for not paying?
Nonpayment is generally a reason a community can end the residency agreement, but the process depends on the state and the contract. Minnesota, for example, requires at least 30 days' written notice, a meeting beforehand, appeal rights and a coordinated move. Contact the long-term care ombudsman as soon as a notice arrives.
Will assisted living accept Medicaid if my parent's money runs out?
Only if the community participates in your state's Medicaid program and has room. Some require a period of private payment first. Ask before move-in whether your parent could stay in the same apartment on Medicaid, and get the answer in writing.
When should we apply for Medicaid?
Well before the money is gone. Eligibility has income, asset and care-need tests, the state reviews asset transfers from the previous 60 months, and waiver programs can have waitlists. An elder law attorney can advise on timing for your parent's situation.
Who can help if we get a discharge notice?
The long-term care ombudsman program advocates for assisted living residents and handles complaints about improper discharges, free and confidentially. An elder law attorney can advise on legal options, and the state licensing agency can explain the rules.
Sources
- Minnesota Statutes 144G.52: Assisted living contract terminations (accessed Sept 2026)
- Minnesota Department of Health: Uniform Disclosure of Assisted Living Services and Amenities (accessed Sept 2026)
- U.S. GAO: Assisted Living Facilities, Information on Federal Spending and Medicaid (GAO-26-107884) (accessed Sept 2026)
- CMS: Transfer of Assets in the Medicaid Program (accessed Sept 2026)
- National Long-Term Care Ombudsman Resource Center: About the Ombudsman Program (accessed Sept 2026)
- Eldercare Locator (ACL) (accessed Sept 2026)