Many older adults want to continue living in their own homes as they age. But that’s not always possible. For some, who need help with the basic personal tasks of everyday life without a need for medical care, an assisted living facility (ALF) may provide the best housing option.
According to the National Center for Assisted Living, assisted living communities offer a residential setting that provides a range of services meant to accommodate changing the needs and preferences of its residents as they age.1
Does Medicare Cover Assisted Living?
Medicare doesn’t pay the cost of room and board in an assisted living facility. It does cover benefits for residents such as hospital care, physician fees and some medically-necessary items.
Experts stress that it’s important to plan ahead and discuss your wishes for long-term care with your family. It’s equally important to establish a plan on how to pay for that care. Most people turning age 65 can expect to use some form of long-term care in their lives. Yet, less than a third of Americans ages 50+ have begun saving for long-term care.
What is Custodial Care?
Custodial care refers to the nonmedical help you may need to go about your daily life. Examples of this assistance include receiving help to get dressed, get out of bed or use the bathroom. Others include meal preparation or medication management.
Assisted living facilities offer custodial care to residents who don’t require round-the-clock skilled medical care at skilled nursing facilities, also called “nursing homes.”
According to the National Center for Assisted Living, there are more than 800,000 Americans residing in assisted living.2 The majority are 85 and older. Some common medical conditions of residents include high blood pressure, arthritis, Alzheimer’s or dementia, heart disease or depression.
For those who need additional care, skilled nursing facilities (SNFs) provide skilled nursing and therapy services to treat, manage and observe medical conditions and evaluate care.
Does Medicare Pay for Custodial Care?
Medicare does not pay for non-skilled assistance to help seniors with activities of daily living, such as the type of care provided in ALFs. Medicare Part A does provide payment for post-hospital medical care in SNFs in tiers. For the first 20 days, there is no cost to beneficiaires. From days 21 to 100, there is a $176 copayment per day.3 After 100 days, enrollees pay all out-of-pocket costs.
The price of a SNF can be costly. Depending on where you live, the cost of a semi-private room in an SNF can cost $7,513 per month — and $8,517 for a private room. 4
Medicare’s home health benefit covers skilled nursing care, skilled therapy services and home health aide services.
Does Medicare Advantage Cover Assisted Living?
Medicare Advantage plans (sometimes called Part C) are health plans offered by private insurance companies. These plans provide Medicare Part A and Part B benefits, as well as prescription drug coverage. They do not cover the cost of meals or room and board at an assisted living facility.
In 2020, some Medicare Advantage plans expanded their supplemental benefits to cover in-home care support. 5
What Are Other Options to Pay for Assisted Living?
The U.S. Department of Health and Human Services estimates that 70% of seniors will require long-term custodial care in their lifetime and that care will come with a steep price.6 According to a National Center for Assisted Living report, the current average cost of assisted living in the U.S. is approximately $4,000 a month or $48,000 annually. 7
While Medicare doesn’t pay for assisted living services, there are other options, including:
- Long-term care insurance – Many long-term care insurance policies cover assisted living, but benefits vary depending on the individual policy.
- Life insurance – Policies with an “accelerated death benefit” provide tax-free cash advances to you while you’re still alive.8 The advance is subtracted from the amount your beneficiaries will receive when you die. This benefit can be accessed if you live permanently in a nursing home, need long-term care for extended time or are terminally ill.
- Veterans’ Benefits – According to Veteran Aid, former military members and their spouses may qualify for the VA Aid and Attendance (A&A) pension benefit.9 As of December, 2018, a single veteran who qualifies for A&A can receive up to $1,881 per month, a married vet can receive up to $2,230 per month and a surviving spouse can receive up to $1,209 per month to pay for care in an assisted living community. You can apply for A&A here.
- Medicaid – The American Council on Aging (ACA) notes that since Medicaid is a federal and state program, the eligibility requirements and the assisted living benefits Medicaid covers will vary from state to state.10 The ACA says that state Medicaid programs typically limit a retiree’s income to 100% of the Federal Poverty Level ($1063 a month in 2020).
- Private Pay – Many people who need long-term care services pay out-of-pocket. Once their savings are depleted, they can apply for Medicaid, a joint federal/state program that helps to cover medical costs for people with limited incomes.
- PACE – Some states have Programs for All-Inclusive Care for the Elderly (PACE), a Medicare program that provides care and services to people who would otherwise need to be in a nursing home.11 The program allows most people to continue to live at home, rather than relocate to a SNF. To find out if your state offers PACE and if you meet the eligibility criteria, call PACE at 1-877-267-2323 or visit pace4you.org.
Not sure if assisted living is the best option for you or a family member? Consider contacting your state’s ombudsman, advocates for nursing homes and assisted living facilities. They can provide free information on how to find a facility and receive quality care.