Key Takeaways

  • Assisted living communities allow residents to enjoy independence and privacy—but they also include staff to help with daily custodial care.

  • Can you you pay for assisted living with Medicare? While Original Medicare does not provide coverage for assisted living, it does cover short-term care in a skilled nursing facility.

  • There are various ways to fund assisted living costs, from personal savings to Medicaid waiver programs. Learn about the different options below.

Medicare is a federal health insurance program that covers a broad range of medical services for older adults, including routine doctor visits, preventive care, and hospital stays. While most people become eligible for Medicare when they turn 65, the program also covers younger people with certain disabilities. Note that Medicare is not the same as Medicaid—a public health insurance program for populations with low income.

If you’re enrolled in Medicare or about to turn 65, you might be wondering: “Will Medicare pay for assisted living?” Here’s all you need to know.

What is assisted living?

Assisted living is a type of residential community for older adults. It allows residents to enjoy freedom and independence in a private apartment setting—but with 24/7 staff on hand to help with activities of daily living (ADL). Residents of assisted living don’t need the level of medical care provided in a nursing home. But they may need help with personal care tasks (e.g., toileting, bathing, dressing, and medication management) as well as transportation and housekeeping. Today, there are roughly 30,600 assisted living communities in the U.S. with nearly 1.2 million licensed beds.1

Assisted living communities are all unique, with different features and amenities ranging from common dining and social areas to libraries and movie rooms. Some of the more elaborate facilities even have spas, bars, restaurants, fitness centers, and outdoor walking and nature trails.

How is assisted living different from nursing homes? Assisted living communities are geared toward generally healthy, active older adults who need minimal extra support. Nursing homes, rather, provide skilled medical care in a clinical setting for people with serious and chronic health conditions. These residents do not need to be in a hospital, but they cannot get the care they require at home.

Does Medicare cover assisted living expenses?

Below are different types of Medicare plans and what they cover related to assisted living costs.

Original Medicare and assisted living costs

Since it's not considered medically necessary, Original Medicare (Parts A and B) does not cover the costs of assisted living.  However, under Part A (Hospital Insurance), Medicare does cover eligible short-term stays in a skilled nursing facility following an inpatient hospital stay for each benefit period. After 20 days, a $200 per day coinsurance applies, and any days beyond 100 must be paid for out of pocket. Original Medicare also covers some aspects of home health care services and hospice care.

While Medicare does not cover assisted living, it will continue to pay for all approved services under Parts A and B—such as hospital stays, doctor visits, procedures, and screenings.

Medicare Advantage and assisted living costs

Medicare Advantage (Part C) allows you to receive your Medicare Parts A and B coverage through private health plans. In addition to Original Medicare, these plans often include prescription drug (Part D) coverage and other benefits.

Medicare Advantage plans cover everything included under Parts A and B. Like Original Medicare, they do not cover assisted living costs. However, some (not all) Part C plans may cover services similar to those offered by assisted living facilities, such as help with activities of daily living, meal delivery, and transportation to and from medical appointments.

Medicare supplement (Medigap) and assisted living costs

Medigap is a supplemental insurance policy sold by private carriers. It can be used alongside Original Medicare to help cover Medicare out-of-pocket costs like deductibles, copayments, and coinsurance. Some Medigap policies also cover medical services that don’t fall under Original Medicare—like emergency medical care during overseas travel.

Since it’s designed to supplement coverage, Medigap does not pay for assisted living or other types of long-term care. It may help relieve some of the out-of-pocket expenses related to short-term care, but this depends on your specific Medigap plan and the coverages it provides.

Medicare and assisted living for dementia patients

Medicare covers certain costs for people with dementia, including hospital care, cognitive assessments, home health care, hospice care, medications (under Part D), and skilled nursing home care. It also covers care planning for eligible patients with Alzheimer's disease and dementia.2 Medigap and Medicaid can help pay for dementia care not covered by Medicare Parts A and B. However, assisted living and other types of long-term care for dementia patients are not covered by Medicare.

Assisted living costs and payment options

How much does assisted living cost?

The cost of assisted living depends greatly on location. In Massachusetts, the 2021 average monthly cost of assisted living was $6,500. In Texas, it was $4,500, and in Louisiana, $3,748. Assisted living expenses may also vary based on the amenities provided and the services a resident needs.

Alternative ways to pay for assisted living

  • Medicaid: Medicaid does not cover the room and board portion of assisted living costs. However, many states offer Medicaid waiver programs that help cover medication management, on-site therapy, and other support services provided in a residential setting. These programs can help defray some of the costs of assisted living for beneficiaries.
  • Veterans’ benefits: Eligible veterans may be able to receive assisted living benefits through the Veterans Administration (VA). Some facilities may be run by the VA and others are approved non-VA facilities.
  • Long-term care insurance: Long-term care policies may cover some of the costs of assisted living, but it depends on your policy and the specific coverage it includes. Each carrier and policy has its own rules and conditions. Be sure to do your homework first.
  • Reverse mortgages: You can use funds from a reverse mortgage to pay for assisted living. However, if you reside at a facility for more than 12 months and your home remains vacant, the reverse mortgage must be paid (usually by selling your house). It's important to talk to a qualified financial counselor before applying for a reverse mortgage.
  • Private funds: Many older adults pay for assisted living through income, personal savings, pensions, and other types of private funds.

Frequently asked questions about assisted living

How does Medicaid differ from Medicare in covering assisted living?

Medicare does not provide coverage for assisted living costs. And while Medicaid does not pay the room and board costs of assisted living, many states do provide waiver programs to help cover some personal care and other support services provided in an assisted living setting. This can help reduce total assisted living costs for qualifying enrollees.  

Can you get financial assistance for assisted living?

A number of states offer help with assisted living costs for qualifying older adults with limited financial resources (e.g., Medicaid). If you’re a veteran, VA benefits and programs may also help cover your assisted living costs.

Are there resources available for veterans seeking assisted living?

To learn more about long-term care benefits for U.S. veterans, visit the VA website or contact your regional VA office.

It’s important to do your research for assisted living costs

When it comes to assisted living costs, Medicare coverage is limited. That’s why it’s essential to explore what other funding alternatives are available to you or your loved one. Talking to a qualified expert can help you understand all your options and make informed decisions.

Sources

1. American Health Care Association/National Center for Assisted Living. Assisted Living Facts and Figures. Found on the internet at https://www.ahcancal.org/Assisted-Living/Facts-and-Figures/Pages/default.aspx

2. Alzheimer's Association. Medicare coverage of care planning for people with cognitive impairment. 2023. Found on the internet at https://www.alz.org/media/documents/alzheimers-dementia-medicare-coverage-for-careplanners-ts.pdf