Does Medicare Cover Assisted Living?
Original Medicare does not cover assisted living or custodial care, which involves assisting with daily living tasks such as bathing, eating, and dressing. However, Medicare Part A may cover skilled nursing care under certain conditions. If you prefer assisted living services, your Medicare benefits may help mitigate costs by covering medications and medically necessary care.
Medicare Advantage plans offer the same benefits as Original Medicare plus additional coverage. Even so, Medicare Advantage benefits do not cover these costs, either. However, some Advantage plans can help pay for services such as adult day care, home safety improvements, and patient support in the home.
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What Is Assisted Living?
Assisted living facilities are residential spaces that primarily serve older people. Most residents can live independently but need support with daily care and easy access to services such as physical therapy and medication management, which these facilities provide. These communities may also offer wellness programs, laundry, housekeeping, and social events.
At residential care facilities, residents receive assessments before they move in, allowing the providers to create personalized service plans that meet each resident’s unique needs. Those who can perform most daily tasks without support may start in apartments or private rooms. As residents age and their needs evolve, their service plans may change, and they might transition to semi-private rooms.
Assisted living is considered custodial care, which Medicare plans do not cover because it is not considered medically necessary. Skilled nursing and nursing home care differ from assisted living since they can be medically necessary, and they involve full-time supervision by medical staff.
Limitations On How Original Medicare Covers Assisted Living
Original Medicare does not cover custodial care, but if you live in a residential care community, your Medicare benefits may cover some of the services you receive.
Medicare Part A is hospital insurance and does not pay for most assisted living services. But Medicare Part B, which is medical insurance, covers the following services that you might receive as a resident of a care facility:
- Diagnostic tests
- Doctor visits
- Durable medical equipment (e.g., a CPAP machine)
- Individual or group psychotherapy
- Medication management
- Preventative and screening services
- Some outpatient prescription drugs
How Does Medigap Cover Assisted Living?
Medigap plans are insurance policies that supplement Medicare coverage. Because Medicare coverage does not include residential care, Medigap benefits do not cover residential care expenses, either.
Like Original Medicare, however, your Medigap plan might cover costs associated with services you receive as a resident. For example, some Medigap plans cover your Medicare deductibles and coinsurance payments, meaning you may be able to visit the doctor and receive medical treatment with no out-of-pocket expenses.
How Does Medicare Advantage Cover Assisted Living?
Private health insurance companies offer Medicare Advantage plans, which include the same coverage as Original Medicare plus additional benefits, such as dental, vision, and in-home care coverage.
Medicare Advantage benefits vary among plans, but no Medicare Advantage plans cover assisted living. That said, your Medicare Advantage policy might cover certain services that residents commonly receive. These services may include:
- Adult daycare
- Nutrition services
- Personal care services (e.g., dressing, bathing, and cooking)
- Prescription drugs
- Routine dental, vision, and hearing care
If you have the option of in-home care or skilled nursing care instead of assisted living, your Medicare Advantage plan may pay for these services. However, if residential care benefits are a deal breaker for you, consider consulting with a trusted insurance agent to learn about providers and policies that cover these costs.
How Much Would Assisted Living Cost With Medicare?
No Medicare or Medigap plans cover assisted living expenses. Without insurance coverage, a one-bedroom unit in a residential care facility costs about $4,500 per month on average, according to 2021 data from Genworth’s Cost of Care Survey. This rate amounts to $54,000 annually, up from $45,536 in 2016.
To help mitigate some of your expenses as a resident, you can use your Medicare benefits to cover the following services.
Benefit | How Medicare Covers It |
|---|---|
Clinical research studies | Medicare pays 80% of approved amount, you pay remaining 20% |
Durable medical equipment (DME) | Medicare pays 80% of approved amount, you pay remaining 20% |
Mental health services, including counseling and therapy | Medicare pays 80% of approved amount, you pay remaining 20% |
Routine and medical doctor’s visits | Medicare pays 80% of approved amount, you pay remaining 20% |
Professionally administered medication | Medicare pays 80% of approved amount, you pay remaining 20% |
Preventive screenings and tests, including cardiovascular disease screenings and diabetes screenings | 100% covered by Medicare |
Vaccinations, including flu shots and Hepatitis B shots | 100% covered by Medicare |
To receive Medicare coverage for the services listed above, you must seek those services from a Medicare-approved provider. If you have a Medicare Advantage plan, your plan may offer additional benefits, so consult your Medicare Advantage policy for details.
Medicare-Covered Alternatives to Assisted Living
Your Medicare benefits may not cover assisted living, but other types of long-term care are often eligible for Medicare coverage. In-home care, skilled nursing care, and long-term hospital care are a few examples. Keep in mind, however, that these services must be medically necessary and meet other standards set by Medicare to qualify for coverage.
Part-time or Intermittent In-home Care
How Medicare Covers It: Both Part A and Part B cover home care, and eligible beneficiaries pay nothing out of pocket for these services. There is also no deductible or coinsurance for Part B-covered home health care. After paying the Part B deductible, beneficiaries pay 20% of the Medicare-approved amount for any qualifying medical equipment used in home care services.
Your services must be part of a treatment plan created and regularly reviewed by a doctor to qualify for in-home care coverage. Covered services may include medically necessary skilled nursing care, occupational therapy, physical therapy, or speech-language pathology.
Qualifying beneficiaries must be homebound, as certified by a doctor. If your needs exceed part-time or intermittent skilled nursing care, you may not be eligible for Medicare’s home care coverage. If you receive home care benefits under Medicare, you can still receive coverage for adult day care.
If you require 24/7 care that is not eligible for Medicare coverage, an assisted living facility might be more affordable than home care.
Skilled Nursing Facility Stay
How Medicare Covers It: Medicare Part A covers skilled nursing facility (SNF) care for $0 coinsurance for the first 20 days of care. For days 21 through 100, beneficiaries must pay up to $200 per day in coinsurance. Medicare coverage ends after day 100 in SNF care.
You must have usable days left in your benefit period to become eligible for SNF coverage. You must also:
- Have a qualifying inpatient hospital stay
- Receive certification from a doctor that you require daily skilled care
- Get your skilled care from or under the supervision of skilled therapy or nursing staff
- Receive care in a Medicare-approved SNF
- Require skilled care for a medical condition that either is hospital-related or began while you were staying in an SNF for another hospital-related condition
SNFs tend to be more restrictive and provide more intensive medical care than assisted living facilities. If you want access to care while maintaining an independent lifestyle, a residential care community might suit you better than an SNF.
Long-term Hospital Stay
How Medicare Covers It: Medicare Part A covers long-term hospital services at various out-of-pocket costs depending on the length of the stay.
Days one through 60 in the hospital are covered after the beneficiary meets a $1,600 deductible. Days 61 through 90 incur a $400 daily copay. After day 90, the beneficiary must pay an $800 copay for each lifetime reserve day. Medicare caps lifetime reserve days at 60.
You might not have to pay a deductible for your long-term hospital stay if you transferred to long-term care from an acute care hospital. Likewise, if you were admitted to long-term hospital care within 60 days of a hospital discharge, you might not have to pay the $1,600 deductible for days one through 60.
Long-term hospital stays are more medically intensive than residential care and typically serve patients facing multiple serious medical conditions. You might receive respiratory treatment, head trauma treatment, or pain management services during a long-term hospital stay.
After completing long-term hospital care, many patients transition to assisted living facilities, SNFs, or other types of long-term care.
How to Find Affordable Assisted Living
If you are ready to transition into a residential care community, you have financing options beyond Medicare. Below, we explore providers and programs that can help pay for your stay in a facility.
- Medicaid: Medicaid is a government-backed program that provides low-cost medical coverage to low-income people and people with disabilities. Many Medicaid programs cover assisted living services, but because Medicaid is state-administered, coverage details vary by state. Louisiana, Pennsylvania, and Virginia do not help pay for assisted living services under their Medicaid programs. All other U.S. states and Washington, D.C., offer some type of Medicaid coverage for residential care facilities.
- Programs for All-inclusive Care For the Elderly (PACE): PACE gives medical and social services to qualifying older people, most of whom also qualify for both Medicare and Medicaid. Though PACE does not cover room and board at assisted facilities, the program pays for adult day care, including transportation to and from the care facility. Such benefits can reduce your necessary residential care services, thereby reducing expenses.
- Life Insurance with accelerated death benefit: An accelerated death benefit (ADB) lets a terminally ill life insurance policyholder claim part of their death benefit before they die. If you receive an ADB, you can use these funds for whatever you choose.
- Life insurance with cash value: If your life insurance policy includes a cash value component, you can borrow against that cash value with an insurance-secured loan. You can use this lump sum of cash to cover any expenses you need.
- Long-term care insurance: As the name implies, long-term care insurance covers long-term care for beneficiaries. Many comprehensive long-term care plans can help cover assisted living expenses. However, long-term care policies usually limit the duration of covered care and how much they will pay for care.
- VA benefits: Some military veterans qualify for residential care coverage from the U.S. Department of Veterans Affairs. Eligible beneficiaries must receive assisted living care from a VA-run or VA-approved provider.
- Pension and retirement savings: Pension payments and retirement savings are private funds you can use to pay for these services. Most people who enter these communities cover their expenses with private funds.
What This Means For You
Many individuals benefit from residential care, which allows community members to live independently while also receiving assistance with life tasks and easy access to medical care and other personalized services. Older people who want to make day-to-day life safer and simpler without sacrificing their freedom may enjoy life in an assisted living community.
However, residential care facilities are expensive, costing well over $50,000 per year on average. Medicare does not cover assisted living expenses, but you can seek coverage through Medicaid or a life insurance provider.