Medicare is the federal health insurance program for people age 65 and over, some younger individuals with disabilities, and some individuals with end-stage renal disease. Like other health insurance plans, Medicare does not cover long-term care services. Therefore, Medicare does not pay for the cost of room and board or personal care in an assisted living facility.
As healthcare costs continue to rise, you may wonder how your parents are going to cover the expenses. An average assisted living community costs $43,200 each year. Skilled nursing communities range between $80-and-$90,000 a year for semi-private and private rooms, respectively. Memory care facility costs are almost $69,000 annually, on average, according to data from the Retirement Living Information Center.
It’s important for adult children and family caregivers to understand the expenses that relate to senior living communities. This includes discovering what is and isn’t covered by Medicare and Medicaid.
Does Medicare Pay for Assisted Living Expenses?
Medicare, which is a type of health insurance that Americans 65 and older are eligible to receive, does not typically cover the expenses associated with assisted, independent or retirement living.
Medicare typically only covers a short-term stay in a skilled nursing or rehabilitation community while an older adult is recovering from an illness or injury. It can also cover in-home rehab care performed by a home health nurse or therapist.
It does not cover non-medical care services such as:
- Assisted living
- Long-term care in a nursing care community
- Residential care homes
- Non-medical home care
Some Medicare Health Plans (HMOs) include extra services such as prescription drugs, dental care and vision check-ups.
Does Medicaid Pay for Assisted Living Communities?
Your parent would qualify for Medicaid if they have a low income and few assets besides their home. Medicaid is funded partly by the government and partly by the states. That’s why qualifications for an individual to receive this type of coverage varies.
Many people wonder about Medicaid assisted living coverage. Almost all state Medicaid programs will cover some assisted living costs for eligible residents. However, similar to Medicare, Medicaid does not pay for the cost of living in an assisted living community.
For qualified seniors, Medicaid does pay for these assisted living services:
- Nursing care
- Case management
- Medication management
- Medical exams
Do Medicaid and Medicare Pay for Memory Care Facilities?
Medicare covers medically necessary care for people with dementia, but does not pay for custodial or personal care or the costs of living in a memory care facility. Medicare coverage for a person with dementia includes inpatient hospital stays, skilled nursing care up to 100 days and hospice. It also pays for preventive care, doctor appointments, lab and diagnostic tests, physical therapy and medical equipment.
Medicaid may cover the costs for a loved one in a memory care facility if that facility has a Medicaid contract. For those in a non-contracted Medicaid memory care facility, Medicaid will pay for the same services as listed under the assisted living community section, above.
What Costs Does Medicare Cover for Your Senior Parent?
A senior’s Medicare benefit covers the expenses relating to medical care such as kidney dialysis, diagnostic tests, emergency ambulance services and more. Some Medicare Health Plans (HMOs) include extra services such as prescription drugs, dental care and vision check-ups.
Other Medicare-covered costs include:
- Emergency care
- Treatment for macular degeneration
- Diabetes care
- Limited medical supplies
- Preventative Services
How Can You Pay for Senior Living
Understanding the costs of senior care can help a caregiver like you determine how to pay for it. If you’re in the process of helping your loved one plan their future living arrangements, start to assess your available resources.
- Long-term care insurance typically covers custodial care. Coverage varies by policy, but assisted living and memory care community expenses are usually covered by this type of insurance.
- Many families choose to pay for assisted living through personal finances. Selling assets, such as your parents’ home, may provide extra funds that can help pay for their new apartment.
- Home equity “bridge” loans are another avenue for financing senior living while you are working to sell a senior’s home or liquidate other assets.
To learn more about senior living communities and how you can help your loved one finance this transition, we encourage you to follow our blog.