There were more than 800,000 Americans residing in assisted living communities in 2022. This equated to roughly 2% of seniors aged 65 and above. If you're an older adult with disabilities and can't live independently, assisted living facilities can be a crucial lifeline for you.
Nursing homes and assisted living facilities exist to give you personalized care within a residential setting.
Some older adults need short-term assisted living, while others need it permanently. The U.S. Department of Health & Human Services estimates that 70% of people turning 65 years old today will need some form of assisted living during their life.
Moving into a nursing home or assisted living facility is not an easy decision. And without the right long-term care insurance in place, it can be costly. The cost of care at a full-time assisted living facility can be anywhere between $45,000 to $85,000 per year, depending on your state. It’s not always possible to pay that amount out-of-pocket.
What is the difference between care homes, assisted living facilities and nursing homes?
Care homes, assisted living facilities, and nursing homes are all designed to offer long-term care options if you need help full-time. However, the care facilities on offer vary depending on the selected option.
At care homes, for instance, caregivers might support you with personal care and meals but typically won’t offer medical care on-site. It’s a type of senior living that provides limited support in a residential setting.
Assisted living facilities may offer slightly more help than a care home. Typically, you will have your own room but share common areas with other residents. These facilities include personal care and meal assistance and may also provide housekeeping and medication assistance services.
Finally, nursing homes, also known as skilled nursing facilities (SNFs), will typically provide you with medical and personal services. The focus here is on medical care and can include rehabilitation services and other nursing home health services.
It’s also worth noting that nursing homes are different from memory care communities where the facilities are similar, but the focus is on supporting people with conditions like Dementia and Alzheimer’s.
Whatever option you’re considering, you might wonder whether Medicare will cover any of the costs associated with these types of services, given their pricing. It’s not good news.
What assisted living costs are covered by Medicare?
Medicare doesn’t typically pay for assisted living, mainly where long-term care is required. Where it does exist, coverage is limited.
Does Original Medicare pay for assisted living?
Original Medicare comprises Medicare Part A (inpatient hospital care, including hospital stays) and Medicare Part B (outpatient care). If you are a Medicare beneficiary living in assisted care, you will still receive your Medicare entitlement.
For instance, if you have opted into Medicare Part D (the prescription drug portion), your medication costs will be covered according to the specifics of your plan. And if you receive nursing home care, you can still rely on Medicare Part B to cover specific outpatient procedures, scans, and tests.
Medicare Part A and SNFs
Medicare Part A usually covers inpatient hospital stays. In certain situations, Medicare Part A will cover a short-term stay in a skilled nursing facility (SNF). An SNF is an in-patient treatment center designed for rehabilitation. Registered nurses and other medical professionals staff it.
You may need SNF care if, for instance, you are recovering from surgery or a stroke. However, there are certain eligibility criteria that you need to meet to qualify for skilled nursing care. The criteria include:
- You need to have days left in your benefit period.
- Your doctor must determine that you need daily skilled care, which skilled nursing or therapy staff must provide.
- A Medicare-certified SNF must provide this care.
Medicare only covers care for medical conditions related to hospital stays or illnesses that began during an SNF stay for a hospital-related condition.
Medicare Part A can provide coverage for this type of care for up to 100 days. For the first 20 days, you won’t usually need to pay coinsurance. For anything between 21 days and 100 days, the coinsurance is up to $200 a day.
If you are eligible for Medicare-covered SNF, you’ll get a range of benefits, some of which include:
- A semi-private room and all meals.
- Skilled nursing care.
- Therapies such as physical and occupational therapy needed to meet specific health goals.
So, while Medicare doesn’t cover most assisted living costs, it can help with specific medical expenses in the short term. However, it’s not a solution for longer-term care.
Do Medicare Advantage plans cover assisted living costs?
Medicare Advantage plans, also known as Medicare Part C, typically do not cover the costs associated with assisted living other than what you might expect as part of your Original Medicare package.
Medicare Advantage plans are private health insurance policies that Medicare governs.
Because Medicare Advantage plans typically come with additional features, this may include benefits related to long-term custodial care. Some plans, for instance, may include in-home healthcare or related services such as skilled nursing.
Medicare and hospice care
Medicare offers a hospice benefit for people eligible for hospice treatment. Typically, these patients have an estimated life expectancy of six months or less. They retain all the benefits that are included under Medicare but also receive the benefit which includes features such as:
- Palliative care-related therapies.
- Support with activities of daily living such as grooming.
- Diagnosis-related supplies, medication, and medical equipment.
- Bereavement support for loved ones.
In general, Medicare provides limited coverage when it comes to assisted living. Typically, this is on a short-term basis of up to 100 days under an SNF arrangement or possibly longer with the hospice benefit. But, given that, on average, people spend about a year in assisted living, this type of cover might not be sufficient for everyone’s needs.
Does Medigap cover assisted living?
Medigap is also known as Medicare Supplement insurance, and you can use it to cover some out-of-pocket costs, such as co-pays and deductibles, that come with Medicare. Medigap is a private insurance policy where you pay a monthly premium. It’s provided by insurance companies to you if you already have Medicare.
However, this policy does not generally cover assisted living care fees, so you won’t be able to use it towards long-term care.
Medicare vs Medicaid: Long-term assisted living coverage
If Medicare coverage doesn’t cover your long-term assisted living needs, alternative options may be available.
Medicaid is one such possibility. Medicaid is a state-run program that helps cover medical costs if you are on a low income. Medicaid programs typically follow federal guidelines but vary from state to state. You can find out if you qualify for your state’s Medicaid program here.
Qualifying for Medicaid is typically based on your income and assets. More than 72 million Americans currently use Medicaid to fund their healthcare, and another 8 million are eligible for both Medicaid and Medicare. This means that Medicaid can provide various services that Medicare doesn’t cover.
What does Medicaid cover?
The exact benefits Medicaid pays for will vary depending on your state. However, typically, the program will cover personal care assistance, transport, emergency response systems, case management, and homemaker services such as cleaning and laundry.
Medicaid won’t typically cover the room and board portion of assisted living. Still, you may be eligible for an option SSI State Supplement, a cash assistance program that can help you cover the price associated with room and board costs.
Do Veterans Benefits cover assisted living costs?
Veterans Benefits are benefits and services provided by the US Department of Veterans Affairs (VA) to eligible veterans and their partners and dependents. The benefits span healthcare, education and training, disability compensation, rehabilitation, and other benefits.
If you're a qualifying veteran or the spouse of a qualifying veteran, you can access assistance that covers the costs of assisted living. This could include assisted-living centers and 24/7 nursing and medical care within the veterans’ own homes or adult day care if needed. Caregivers requiring skilled assistance or a break can also access respite support.
Veterans Benefits can be a great way to access long-term care if Medicare and Medicaid don’t fulfill your needs.
Paying for assisted living with Medicare
Assisted living facilities and nursing homes are a lifeline if you have complex needs, especially if you require full-time care and support. But, the high cost of care can be a barrier, and Medicare coverage is limited to short-term stays and hospice care.
If you don’t have the financial means to pay the often prohibitive fees out-of-pocket, there are options like Veterans Benefits and Medicaid. These programs can supplement Medicare and help fund your long-term health care.
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