Does Medicare Pay for Assisted Living?

Medicare is a federal health coverage program that will not pay for an assisted living facility directly. However, under certain circumstances, Medicare may help pay for some assisted living costs for qualifying senior residents in senior living communities. Currently, this program applies to:

• Seniors age 65 years and older
• People under age 65 with receiving Social Security Disability Benefits
• People of all ages diagnosed with Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s disease) or permanent kidney failure.

In these cases, Medicare covers medically necessary care for acute care, such as doctor visits, drugs, and hospital stays. To accurately plan for your long-term care needs, make sure to understand the facts about the Medicare program and stay current about changes on what may or may not be covered.

How much does Medicare pay for assisted living?

It’s important to know that Medicare does not pay for “custodial care” such as most assistance with activities of daily living (ADLs). Rather, it covers limited and medically necessary skilled care for an illness or injury. Medicare will only pay for medical treatment (it does not cover any costs associated with room and board). For example, if you need long-term skilled care following hospitalization and meet qualifying conditions:

• Medicare pays 100 percent of the cost for the first 20 days.
• For days 21 through 100, you pay a daily co-payment, and Medicare pays any balance.
• Medicare will not cover costs for days you stay in a skilled nursing facility after the 100th day.

In some cases, assisted living facility residents use Medicare to pay for ongoing long-term care services if they have medical conditions that may not improve. For example, they have experienced a stroke, Parkinson's disease, ALS, Multiple Sclerosis, or Alzheimer's disease. Medicare may also cover hospice care for senior residents in assisted living homes who have a terminal illness and are no longer seeking a cure.

If you live in an assisted living community and have Medicare prescription drug coverage, you’ll get your covered prescriptions from a long-term care pharmacy that works with your plan. 

For durable medical equipment and supplies, such as wheelchairs, hospital beds, oxygen, and walkers, Medicare will often cover a large portion of the cost, but you will still need to pay the remainder.

Assisted living residents on Medicare can also take advantage of home medical services if they meet certain criteria:

• A doctor must certify that a resident needs particular home health services, which would include skilled visiting nurse services, physical or occupational therapy, or services for speech-language pathology.
• The care must be provided by an agency that has Medicare certification.
• A doctor needs to certify that the resident is homebound and travel to medical appointments is not advisable for health reasons.

How to find assisted living that accepts Medicare

The question of do assisted living facilities take Medicare comes down to the structure and services of the specific assisted living community. Not all assisted living facilities accept Medicare since they might not be able to directly provide the covered medical services. If you want to use Medicare to pay for your medical care while in an assisted living facility, you will need to ensure that the facility has Medicare certification.

Confirm that Medicare will cover the specific service you need by visiting their website, and work with your doctor to create a healthcare plan. When you’re researching assisted living communities, check that they employ the necessary healthcare staff (such as skilled nurses and therapists) that can directly provide the needed care services.

When researching retirement communities near you ask if they accept Medicare. Also, look into their payment structure. You will need to separate your medical expenses from personal care services as well as room and board fees. This is easily accomplished if the assisted living facility uses an “à la carte” payment model, but if they have an “all-inclusive” payment structure, will they still be able to provide an itemized list of medical services?

How to pay for assisted living with Medicare

How does Medicare pay for an assisted living facility, once you or your loved one has chosen one that matches your needs? How assisted living facilities work with Medicare will depend on the specific assisted living community, but often they will help coordinate payment plans or act as a liaison. When applicable, Medicare will pay just as they would if the medical procedures occurred in a doctor's office, hospital, or at one's home.

To use your Medicare benefits to cover assisted living costs, you will need to prove that the medical care was provided directly through the facility. If your assisted living facility accepts Medicare payments for medical care, it should provide an itemized list of services so that you can clearly show which health care charges are eligible for coverage.

Other forms of government healthcare

Other government-funded programs may also help pay for some long-term care services. However, each program has specific rules about what services are covered, how long you can receive benefits, whether you qualify for benefits, and how much you have to pay out-of-pocket. Moreover, not every assisted living community accepts payments from these programs. It’s important to check with your plan and your assisted living community to ensure that your benefits can be used to pay for services.

Can Social Security pay for assisted living in your state?

In most states, qualifying seniors can use Optional State Supplements (OSS) to help pay for assisted living costs. OSS is state-based financial aid provided on top of the federal Social Security benefits. As a state-based program, OSS coverage will depend on your location.

In most states, when applicable, OSS can be sent directly to your assisted living community to help pay for the room and board. OSS amounts are calculated based on the individual’s income. You can find more information about state OSS benefits here.

Can Veteran's Benefits be used to pay for assisted living?

The Department of Veterans Affairs (VA) pays for long-term care services for service-related disabilities and, in some cases, for certain other eligible veterans. This includes long-term care at assisted living communities, private homes, and skilled nursing facilities. However, there are restrictions, so it’s important to confirm if VA benefits can be used to cover your specific medical or personal care needs and that your assisted living community accepts VA payments. Visit the VA’s website to learn more about their senior care program options.

Does Medicaid cover assisted living costs?

Medicaid is partly funded by the federal government and partly by the states. This means each state sets its own policies regarding how Medicaid funds can be applied to care in assisted living facilities. Many states include non-medical services under Medicaid programs, including personal care, homemaker assistance, medical equipment, and other services needed for senior care and housing.

Because custodial skilled nursing placement is costly, the Medicaid program sometimes provides vouchers that enable seniors to remain in assisted living facilities. For more information, here is a state-by-state summary of Medicaid personal care benefits.

Are there state government aid programs that can help with assisted living costs?

Apart from the government programs that are offered nationally, many states across the U.S. offer their own unique forms of financial aid. A few examples of these programs have been provided in the table below: