‘There is nothing else’: Californians face eviction as insurer cancels assisted living benefit

Four weeks ago, Matt Johnstone received a call from the board-and-care facility where his 89-year-old father resides. Health Net, the insurance company covering his father's care, announced it would be eliminating the assisted living benefit, leaving Johnstone with no choice but to move his father out of the facility within weeks.

Johnstone, who lives in North Hollywood, California, is deeply concerned as his father suffers from dementia and requires constant care. The couple cannot afford the approximately $6,000 monthly cost of the facility, and they cannot provide adequate care at home due to their own health issues. Without insurance coverage, Johnstone fears his father may end up homeless.

Health Net, one of the largest Medi-Cal insurers in the country, is set to cancel assisted living benefits for its members by the end of the year, according to documents released to CalMatters and conversations with healthcare providers. About 3,500 Medi-Cal patients, primarily elderly and many with cognitive impairments like dementia, rely on Health Net to cover assisted living expenses.

Most are part of CalViva Health and Community Health Plan of Imperial Valley, which share news of their intention to discontinue assisted living benefits with the state.

The decision by Health Net has caused confusion and alarm among senior advocates and families of assisted living residents. They worry that people might become homeless or be moved between hospitals and skilled nursing facilities. Pauline Shatara, deputy director of California Advocates for Nursing Home Reform, expressed her concerns, stating that some facilities have already reported residents being transferred to emergency rooms.

The advocates argue that the state's lack of sufficient consumer protections leaves patients vulnerable if plans terminate their coverage. However, state regulators argue that consumer safeguards are in place.

The assisted living support is an optional Medi-Cal benefit, so insurance companies can choose whether to offer it to members and decide annually if the program will continue. Assisted living support is part of CalAIM, a program aimed at improving Medi-Cal services and cutting costs by stabilizing high-cost users who frequently end up in emergency rooms.

This benefit covers most of the 24-hour care costs in board-and-care homes, memory care facilities, or larger group settings, while residents pay for room and board. The average nursing home costs over $10,000 monthly, while assisted living facilities range from $5,000 to $7,000 per month. The state created this benefit to ease pressure on a separate assisted living program for low-income patients, which has a cap of 18,000 people and a lengthy waiting list.

Despite this, Health Net maintains that affected patients will receive care until their individual authorization date and could transition to nursing homes, home-based supportive services, or other programs based on their clinical needs and eligibility. The company also claims that their decision is not driven by a lack of effectiveness in the assisted living program, as internal data shows no significant reduction in emergency room visits or hospitalizations.