Medi-Cal won’t pay for assisted living in most of California. One brother fought back

Last summer, siblings Roselie and John Aiello decided it was time for Roselie to leave her home of 73 years. 

Raised on a cattle ranch in the small town of Mount Shasta, Roselie spent her life working as a butcher and handling animals, assisting her father until his death. When her three brothers moved away, she stayed at home on the ranch, with its winding dirt roads and green pastures. But over the years, the hard manual labor left her bones weak and her back curved, slowing her pace. 

John moved back to the ranch in far Northern California to take care of Roselie, who needed some assistance with showering and getting dressed. But these tasks began to weigh on John as he balanced his career as a writer with tending to the land, which was getting more difficult for Roselie to navigate. 

The two siblings made a decision: Roselie, who qualified for Medicaid, would move into assisted living. John would find an appropriate place for her to live and receive care.

But when John tried to apply for assisted living benefits on his sister’s behalf, he found that Medi-Cal — California’s version of Medicaid — does not offer a waiver to pay for assisted living care in Siskiyou County, nor does it in 42 others across the state. Only 15 California counties, most of them urban, offer this option.

This has created geographic disparity that gives aging adults in urban areas more options for care than those in rural areas, pushing Northern California seniors like Roselie Aiello into nursing homes or out of their communities, not because they need that level of care, but because they can’t afford to pay out of pocket for assisted living. 

“You’re wasting money by dumping somebody like my sister in a skilled nursing facility and lessening her quality of life and her chance at doing better,” John said. “By doing this, it makes no fundamental sense.”

In the coming decade, many more Californians may face the same predicament, given that one in four will be older than 60. As the state prepares for this explosion in the older adult population, it is prioritizing the ability to age in community-based settings like homes or assisted living facilities. 

But availability of assisted living options varies county to county and is based on decisions by the various managed care providers contracted to deliver healthcare to the state’s lowest-income residents.

“There’s not a lot of options to begin with in rural counties. You take (the assisted living waiver) off a table, which already has a history of a long waiting list, and the options are pretty bleak,” said Maura Gibney, executive director of California Advocates for Nursing Home Reform.

Partnership HealthPlan, which Roselie Aiello is enrolled in, contracts with the state to provide coverage to almost a million Californians on Medi-Cal, making it the largest Medi-Cal managed care plan in Northern California. It is the only Medi-Cal managed care plan available in a separate set of 15 California counties. 

Managed care providers are encouraged, but not required, to offer as many “community supports” as they can, Tessa Outhyse, a spokesperson for the California Department of Health Care Services, said in an email. CalAIM, the state’s multiyear initiative to overhaul Medi-Cal,includes community supports include assistance transitioning to an assisted living facility as well as transitional rent, caregiver respite and personal care services. 

These services are intended to offer healthcare options to Medi-Cal members before their conditions escalate to needing more serious care, therefore saving money. Even when CalAIM’s current waivers expire at the end of the year, the community supports benefits will continue through the managed care plans. 

When determining which supports to offer, managed care plans take into consideration provider availability and local capacity to offer care, Outhyse said. Partnership chose not to offer assisted living support based on financial factors and a lack of appropriate facilities in the rural areas where it provides care, said Dustin Lyda, spokesperson for the organization. 

Lyda said any change in what the organization offers would require proof that assisted living facilities would be safer and healthier for members than nursing homes. But he acknowledged that options are more limited for rural members. 

“There’s definitely a lot more work that we need to do on our end to navigate the more rural areas,” Lyda said. 

Hitting roadblocks

When John Aiello heard about assisted living benefits through Medi-Cal, he saw it as the perfect match for his sister’s needs. He knew that he likely would have to move her out of Siskiyou County, where there was only one facility for Medi-Cal recipients, a nursing home.

Roselie had spent some time at an assisted living facility in neighboring Shasta County, which they saw as a better fit. But Partnership didn’t offer assisted living as a community support in that county. 

Instead, the provider offered Roselie a waiver to go into assisted living in Sonoma County, which is about five hours from her home. The Aiellos turned that down, thinking it would not be good for Roselie. 

“If you remove her totally from a family contact, she would not be thriving right now. She needs to see family,” John Aiello said. “When there were resources available that fit her needs in Redding — that’s the closest point to her home county — why do I need to move her to Oakland, to Los Angeles, to San Diego?”

Over the course of nine months, John sent dozens of emails and spent hours on phone calls to get Partnership HealthPlan to cover Roselie’s placement in assisted living. He had the support of her doctor and a spot for Roselie at the residence in Shasta County. 

The process was so intense and frustrating that it drove a wedge between him and his sister in their final months of living together. 

“He was doing all of this to help me,” Roselie said. “Where was it going to end?”

Encouraged or required? 

Most people prefer community-based services over skilled nursing care, which is generally more expensive. But nursing home beds are in short supply and should be reserved for those who truly need them, Gibney said.

“We really try to help people look at the other options that exist for remaining in the community,” Gibney said. “You’re going to have better health outcomes, better quality of care, if you can stay in the community and out of an institutional setting.”

Research indicates that while assisted living may provide better outcomes for some, people in assisted living are more likely than nursing home residents to be hospitalized, which can drive up costs, said Dr. Kenneth Lam, a geriatrician and assistant professor at the University of Colorado Anschutz Medical Campus. 

“The evidence suggests that it’s a trade-off,” he said. 

Contracts for managed care plans are not competitively bid, Outhyse said. And potential contractors aren’t asked to include specific community supports, such as assisted living, in their managed care plans.

“Whether a plan chooses to provide specific community supports is not a factor in contract renewal, which focuses instead on overall compliance with state and federal performance standards,” Outhyse wrote in the email.

Partnership’s contract with the state was set to expire in December, but will be extended until 2029, because the state delayed the process of soliciting managed care contracts. Lyda said Partnership is facing increasing demand for its community supports — which mainly address social needs, such as housing and food security — and for assisted living benefits. But even people in counties where the managed care provider offers an assisted living benefit can have a long wait for placement. 

After years of constant increases, the number of Californians receiving an assisted living waiver for the first time dropped at the beginning of 2025, though the waitlist continued to climb. 

By September, the number of Californians waiting for a waiver had surpassed the number of people who were being supported by it.

Gibney said that Medi-Cal members are often encouraged to get on the waitlist before applying for assisted living funding, which could contribute to the long wait. 

Older adults might spend months on a waitlist, only to be told that they are ineligible for assisted living coverage. 

“It’s a lot of shifting sand, that’s what people are finding themselves in the middle of,” Lam said. “They’re being told that they get to choose, but it’s a complex choice.”

A new home

In March, Roselie moved into her new home, Sundial Assisted Living, the Shasta County facility where she had previously spent some time. Two months earlier, Partnership had informed the Aiellos that it would cover Roselie’s assisted living care. 

Partnership offered Roselie early access to a pilot program that launched on July 1, which extends the assisted living options to select members of the network. There will be no open application process, but members can ask to be considered or referred through a healthcare provider. 

The goal is to discover if offering the assisted living option will provide better health outcomes at a lower price.

“Success would also be having these individuals being able to continue to receive care within their community setting, being in their home,” Lyda said. “We know that that is more impactful to health than being completely taken out of a familiar area.” 

The adjustment has not been easy for Roselie. She has been hospitalized twice since she moved to Sundial and briefly entered a nursing home.  

Socially, things have gone better. Roselie has made friends and is often called on to teach card games to her fellow Sundial residents. While she was hospitalized, her neighbors and caretakers at Sundial visited her. She’s grateful to John for navigating through red tape to get her here. 

“I’m looking at it like this: It’s a new adventure,” she said. 

John worries about his sister’s health issues and whether Sundial will be a long-term solution for her. He’s gratified his fight ended with his sister’s placement in their chosen facility. But he resents having to wage the battle.

“I don’t understand why I was the guy fighting for everybody,” John said. “I’m just one person trying to support myself, trying to take care of a family member.”

Jessica Blough reported on this story while with the Investigative Reporting Program at UC Berkeley Journalism School, though a grant from The SCAN Foundation.