Are the Costs of Assisted Living Covered by Medicare?

Medicare does not cover the costs of assisted living for people who need basic support with activities of daily living (ADLs) such as eating, bathing and moving around. However, it can cover skilled nursing and medical care in an approved nursing home or assisted living facility for members who meet certain eligibility requirements.

Continue reading to learn more about when Medicare pays for assisted living communities and what other options senior citizens have for covering their end-of-life care.

On This Page

• 

  How Much Does Assisted Living Cost?

• 

  What Assisted Living Costs Will Medicare Cover?

• 

  Will Medicare Cover the Costs of Long-Term Care?

• 

  How To Pay for Assisted Living When Medicare Won’t Cover It

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  FAQs

How Much Does Assisted Living Cost?

The median cost to stay in an assisted living facility is $5,350 per month; that price jumps up to $9,733 per month if you instead opt for a private room in a nursing home.^[1] You should note that assisted living facilities are regulated at the state level, while nursing homes are regulated at the federal level and tend to have stricter staffing, training and inspection requirements. Skilled nursing care is typically provided in nursing homes but may also be available in assisted living facilities.^[2]

What Assisted Living Costs Will Medicare Cover?

Medicare will not pay for most types of assisted living benefits since it doesn’t cover custodial care, which refers to assistance with everyday living activities and other types of unskilled care for people with chronic illnesses or disabilities.^[3] However, it does cover rehabilitative and nursing care delivered by licensed nurses or other medical professionals in a Medicare-certified skilled nursing facility.^[4]

To qualify for skilled nursing coverage through Medicare Part A, you must generally spend three days in a hospital receiving inpatient care no more than 30 days before the beginning of your stay in a skilled nursing facility. That said, you may not need a qualifying hospital stay if you’re on Medicare Part C or your doctor participates in an Accountable Care Organization or a similar initiative. If you meet the eligibility criteria, Original Medicare will cover your first 20 days in the facility with no copays, though you may have copays if you have a Medicare Advantage plan.^[4]

Afterward, you must pay $204 per day through the 100th day, at which point your coverage will expire. However, if you leave the skilled nursing facility and reenter it or enter a different facility within 30 days — or if you require skilled nursing care again later on after another three-day hospital stay — then you will qualify for a new 100-day benefit period. Each benefit period comes with its own deductible for inpatient hospital care but there is no limit on the number of benefit periods you can qualify for.^[4]

Does Medicare Pay for Assisted Living for People With Dementia?

People with dementia may be eligible for coverage for skilled nursing care in an approved assisted living facility through Medicare if a doctor determines that it is necessary to manage their condition and they were either treated for dementia during an inpatient hospital stay lasting at least three days or they developed dementia while receiving skilled nursing care for a separate condition.^[4]

Examples of the types of services that may be covered by Medicare while you are in a skilled nursing facility include the following:^[4]

• Semiprivate room
• Meals
• Skilled nursing care
• Physical therapy
• Occupational therapy
• Speech-language pathology services
• Medical social services
• Medications
• Medical supplies and equipment
• Ambulance transportation
• Dietary counseling

You should note that, even if you’ve been in an assisted living facility for less than 100 days, Medicare will stop covering your stay if you go 60 days in a row without receiving any skilled nursing or inpatient hospital care.^[4] Even so, if you’re in a situation where Medicare won’t cover your room and board at an assisted living facility, it will still cover medical services and prescription drugs you receive while you are in assisted living.

Will Medicare Cover the Costs of Long-Term Care?

Medicare generally does not provide coverage for long-term care since it doesn’t cover custodial care at all and only covers skilled nursing care for up to 100 days in a row.^[3][4] In addition, long-term services and supports (LTSS) generally aren’t covered by Medicare Supplement Insurance, also known as Medigap.^[3]

Nevertheless, you may be able to receive more comprehensive health coverage by enrolling in an Institutional Special Needs Plan (I-SNP) if you need the level of care provided by a skilled nursing facility or have already lived in such a facility for at least 90 consecutive days.^[5]

How To Pay for Assisted Living When Medicare Won’t Cover It

If Medicare won’t help pay for you to move into an assisted living facility, you can consider options like the following to cover the costs.

Medicaid

Medicaid is the top payer for long-term care services throughout the country, with LTSS accounting for more than 30% of Medicaid spending in 2020.^[6] Specifically, Medicaid should cover 100% of the cost associated with staying in a nursing home, although it may not cover room and board for an assisted living facility.^[7][8]

Keep in mind that, depending on your circumstances, you may not qualify for Medicaid unless you earn less than $500 per month after subtracting the amount you are charged for medical care or have less than $2,000 worth of countable assets.^[9] As a result, Medicaid may not be an option for you unless you have little to no income or have already spent the majority of your money on long-term care.

Veterans’ Benefits

Veterans signed up for health care through the Department of Veterans Affairs (VA) can receive coverage for 24/7 nursing and medical care, pain management and comfort care, physical therapy, assistance with ADLs and support for caregivers if the VA determines that they need the services and they live in an area where the services are available.^[10]

In addition, veterans receiving a pension through the VA can qualify for an additional Aid and Attendance benefit that they can use to help cover long-term care costs if they are bedridden, live in a nursing home, need help with ADLs or have significantly impaired eyesight.^[11]

Long-Term Care Insurance

Long-term care insurance can cover custodial, hospice or respite care services you receive over an extended period of time in an assisted living facility, a nursing home or your own home. You may qualify for coverage if you need significant supervision due to a major cognitive disability or are impaired in your ability to do at least two of the following six ADLs:^[12]

• Bathing
• Putting on clothes
• Getting out of bed
• Feeding yourself
• Going to the bathroom
• Controlling your bladder and bowel movements

Some policies have an elimination period — also known as a deductible or waiting period — lasting between 30 and 100 days. This means that you must pay for long-term care services out of pocket for the first 30 to 100 days that you receive them, after which your insurance carrier will start to pay for them.^[12]

Life Insurance

Some insurance companies allow you to add a long-term care insurance rider to your life insurance policy that pays out before your death in the event that you develop a need for long-term care. Alternatively, you may be able to purchase an accelerated death benefit rider that enables you to withdraw money from the policy early if you contract a terminal illness or are permanently confined to a nursing home. Keep in mind that any money you withdraw from the policy will generally be subtracted from your beneficiaries' death benefit after you die.^[13]

Personal Funding

Of course, you may be able to pay for assisted living services out of pocket if you have a significant amount of money in savings or a substantial pension. However, you should remember that it costs around $64,200 per year to stay in an assisted living facility and $116,800 per year to stay in a private room in a nursing home on average, which means that personal funding may not be a sustainable option unless you are very wealthy.^[1]