Table of contents
Table of contents
Medicare covers many medical costs, but it generally doesn’t pay for assisted living.[1] This long-term care service generally includes lodging and support for daily living activities rather than being a true healthcare expense, like if you’re recovering from a fall.
The fact that Medicare doesn’t cover assisted living facilities may come as a shock to many seniors, and understandably so, given that the national average cost of an assisted living facility was $5,350 per month in 2023.[2] Though Medicare may pay for some of the care you need while you’re in an assisted living facility in limited cases, you’ll need to consider other options or ways to pay the remainder.
The different parts of Medicare
To understand when and how Medicare might pay for assisted living costs, you need to better understand Medicare. Each part of Medicare has a different role.
Medicare Part A
Medicare Part A covers hospital stays and short-term stints in nursing homes, as well as medical care provided by therapists and nurses on an in-home basis. This includes living in an assisted living community.
Medicare Part B
Medicare Part B covers medical treatment on an inpatient or outpatient basis, including medical equipment and vaccines. Together, Part A and Part B coverage are known as Original Medicare.
Medicare Part C
Also known as Medicare Advantage, this includes plans offered through private insurers. These plans offer bundled coverage to match Medicare Parts A and B, and these plans include Part D as well. Medicare Part C may also cover some custodial care, depending on the type of Medicare Advantage plan you have.[3]
Medicare Special Needs Plan
This is a special type of Medicare Advantage plan that may offer more coverage and disability benefits for people with specific needs stemming from chronic conditions, like kidney disease or Alzheimer’s disease.
Medicare Part D
This part focuses on the prescription drug component of Medicare. Private insurance companies offer Part D plans, and you can purchase a Part D plan as you would a Medicare Advantage plan.[4]
Does Medicare cover assisted living?
No. Medicare doesn’t pay for assisted living facilities — at least not directly. That’s because assisted living facilities generally offer help with custodial care services. This includes help with daily activities like bathing and grocery shopping, rather than skilled nursing care for diagnosed medical conditions like you’d get with a qualifying hospital stay.
Medicare helps cover inpatient hospital care and stays in nursing homes or skilled nursing facilities. But Medicare only covers these stays for a limited time, and they must be for covered medical ailments.
Good to Know
Some Medicare Advantage plans will help cover assisted living stays, but you’ll need to check with your insurer. Your plan may offer additional coverage or even limit your choices to specific nursing facilities.
Assistive services covered by Medicare
If you have a medical condition that makes you require help for basic personal tasks or you’re homebound, Medicare may cover some of your services. This could include in-home visits from a physical therapist or a part-time home health aide. But Medicare won’t cover your rent, food, or other living costs. It would only cover medically necessary expenses.
If you need more intensive care while you recover from an illness or injury, Medicare will cover you for short-term stays in a skilled nursing facility like a nursing home, rather than an assisted living facility. Nursing home stays under 20 days are generally free, with additional copays required until your 100th day in care, when you reach the limits of your Medicare coverage.
If you’re facing a terminal illness, Medicare may cover some of your non-medical hospice care as well. This could include personal care, homemaker services, and social support. But you’re still required to pay for your own room and board whether you’re at an assisted living facility or not.
Other financing options for assisted living
About six in 10 seniors needing some kind of long-term care pay out of pocket, according to Genworth.[5] But not everyone can afford such costs.
Fortunately, senior have some alternative ways to pay for living solutions, including:
Home equity: If you’re a homeowner, selling your home can help you raise the funds you’ll need for assisted living while ridding you of extra costs. If you have a spouse living in the home, a reverse mortgage could also be a viable option.
Personal savings: Now’s the time to use assets you’ve been stockpiling in retirement, including savings plans, stocks, Social Security benefits, and Supplemental Security Income.
Medicaid waivers: The federal government partners with individual state programs to offer support for some (but not all) services offered by assisted living facilities. This support is offered to older adults with a low income on a first-come, first-served basis in some states.
Veterans’ benefits: If you’re receiving a Veterans Affairs (VA) pension, you may be able to get additional monthly income for community-based services through an Aid and Attendance award. You may also qualify to live in a veterans’ home.
Long-term care insurance: If you purchased a policy when you were younger, it may cover some or all of the costs of long-term care in assisted living facilities, memory care facilities, and more. Some life insurance policies offer similar benefits.
Preparing financially for assisted living
Financial resources are available for most seniors looking to transition into a retirement community, but the guidelines aren’t for everyone. For example, if you have more than $2,000 in assets, you won’t meet the eligibility requirements for Medicaid services.
If your assets are above this threshold, the following tips can help you plan:
Research the total cost of residential care facilities in your area, which is available through Genworth’s Cost of Care Survey.
Keep your family members in the loop about your plans, financial abilities, and preferences for senior care.
Be realistic about the types of long-term care you’ll need based on your family history, the healthcare services you already use, and your personal preferences.
Talk to a fee-only financial advisor who works on a fiduciary basis to give you the best information, rather than one who sells investments for a commission.
Consider a facility that offers a range of services spanning from assisted living to nursing and memory care so that you don’t need to switch retirement homes.
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