Medicare won't cover most assisted living costs. Medicare doesn't pay for “custody care,” a term that refers to help with tasks of daily living, such as eating, bathing, or dressing. Most of the care provided in an assisted living facility is considered custody care. Although Medicare doesn't cover assisted living, you'll continue to pay for all services approved under Parts A and B, such as hospitalizations, doctor visits, procedures, and the exams.
While federal Medicaid law requires states to cover the costs of nursing facilities, including room and board and the costs of care, nearly all home care is optional for states. Many older adults and people with disabilities move to assisted living facilities when they need help with activities of daily living (such as eating and dressing) and instrumental activities of daily living (such as preparing meals and administering medications), as an alternative to nursing facilities. While Medicaid doesn't cover room and board in assisted living facilities, Medicaid may cover home care for residents of assisted living facilities and some states may have policies to defray the costs of room and board (see below). In a small number of states (9 out of 2), assisted living facilities are prohibited from evicting residents if they pay the amount of room and board determined by the state. Assisted living centers provide older adults with an opportunity to maintain their independence for as long as possible before needing the more intensive, full-time care provided by nursing homes.
Medicare covers certain costs for people with dementia, such as hospital care, cognitive evaluations, home health care, palliative care, medications (depending on Part D), and care in specialized nursing homes. It's not known what percentage of assisted living facilities receive Medicaid funding or how many states require them to do so, and most states don't require that assisted living facilities accept new residents who are enrolled in Medicaid. All assisted living communities are unique, with different features and services that range from dining rooms and common social areas to libraries and movie theaters. There are several ways to finance the costs of assisted living, from personal savings to Medicaid exemption programs. Other types of residential care facilities include retirement homes and nursing homes, nursing facilities, and retirement communities with ongoing care. However, Medicare doesn't cover assisted living and other types of long-term care for patients with dementia.
Among the 32 states that cover home care in assisted living facilities for a specific population, 30 states do so through exemptions aimed at adults over 65 or with physical disabilities. While some families rely on their own money, such as accumulated personal savings, pension plans and retirement accounts, to help defray the cost of assisted living, long-term care insurance can also come into play in this case. Other services covered by many states in assisted living facilities include case management (24 states); nursing (22 states); equipment, technology and modifications (21 states); and non-medical transportation (19 states, Figure 2, appendix chart). In addition to Medicaid, 44 states provide additional supplemental security income (SSI) to cover the costs of assisted living, and SSI recipients are generally eligible for Medicaid.
Assisted living expenses may also vary depending on the services provided and the specific services needed by the resident. It usually refers to services provided in a long-term care facility that meet a person's health and personal care needs when they can't meet them on their own. And while Medicaid doesn't pay for the room and board costs of assisted living, many states do offer exemption programs to help cover some personal care and other support services provided in an assisted living environment. While these programs help residents pay for the costs of assisted living, they can also discourage assisted living centers from serving people enrolled in Medicaid, especially since Medicaid payment rates tend to be lower than people they would pay out of pocket.
