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She has dementia and relies on wine to relax her.
Her dog is diabetic.

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Not that I know of. Some have visiting animals. I even know one that has a resident cat that can go into rooms if doors left open. Used to know one with a resident Golden Retriever in Missouri. But I do not know of any that allow residents to keep their animals. It is quite common with some restrictions, in ALF, but seldom in Nursing Homes, which are covered by medicaid or otherwise.
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No. LTC facilities, that Medicaid pays for, do not allow dogs or cats. Assisted livings may but the resident needs to be able to care for the animal themselves. Since ur Mom has Dementia, I doubt she could properly care for an aging dog. I doubt if the dog would be allowed to roam the facility. Other residents may not like dogs.

Not sure about wine. That would be a question for the facility she is placed in.
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In my MIL's facility in the AL wing, a resident can have a dog or cat but must "be in control" of it at all times. A diabetic dog requires medications. Who would be paying for its care? Also, Medicaid rooms are shared rooms, so the roommate thing would disqualify her having a pet no matter what. Regarding the wine...the medical staff isn't going to store and administer it to her as if it were a prescribed medicine. You'd have to bring it in every time and give it to her.
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When my family member worked in an AL dogs were a big problem because families seemed to think that staff should be looking after pets as well as people. Aging pets may not play well with others, and if the owner isn't up to walking, grooming and ensuring they have the ability to do their business they may (almost certainly will) make messes not only in the resident's rooms but in public areas of the facility. Staff are barely given enough time to look after the needs of people and with the exception of a few animal lovers they are not going to be happy about dealing with a pet, if you find a place that does accept them then please arrange for someone to come in daily to look after the dog.
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Long Term Care Medicaid generally only pays for a NH when the patient reaches two levels of qualification. One being financial. The second one medical. She has to qualify, be at need, in both areas. Any funds she has access to have to be spent on her care. No gifting. Currently most states look back five years as part of the application process.

Some ALF would allow the dog and the wine but there would be the issue of taking care of the dog. Plus your mom may need memory care vs ALF. It depends on her health and since dementia is progressive, that can change sooner than might be expected.

It is often suggested that she look for a facility that offers a continuum of care. Assisted living, memory care and then skilled nursing with the understanding she would be progressing to Medicaid as she outlives her assets and that a bed would be available.

A certified elder attorney who is well versed in Medicaid law in Illinois would be a first stop to make sure she doesn’t make costly missteps and has her paperwork in order.

Some board and care homes might accommodate her dog as well. They are smaller, sometimes fewer rules.

I am sorry for this difficult time in your moms life. Good luck helping her make these transitions.
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