Does Medicare Pay for Assisted Living Expenses?
If you’re exploring the question, “does Medicare pay for assisted living?” it’s important to understand that Medicare generally does not cover the cost of assisted living facilities. However, there are exceptions and other ways to fund these costs.
In this article, we’ll clarify the limitations of Medicare coverage, examine the specifics of Medicare Advantage plans, and discuss additional financial options for assisted living expenses.
Key Takeaways
- Medicare does not cover the cost of residency or nonmedical custodial care in assisted living facilities but does cover some medical services, such as doctor’s visits and short-term skilled nursing care after a hospital stay.
- The average monthly cost for assisted living is $3,628, which is typically less expensive than other elder care options, yet alternatives such as Medicaid, long-term care insurance, and veterans’ aid can help cover these expenses.
- Medicare Advantage plans offer additional benefits over Original Medicare and can cover certain services to support independent living, but they do not cover the full cost of residing in an assisted living facility.
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Exploring Medicare Coverage in Assisted Living Facilities
Understanding the role of Medicare is a key aspect when contemplating assisted living. As a federal health insurance program, Medicare is designed to assist older adults with medical expenses.
However, does Medicare cover assisted living? The answer is no, as it does not cover the cost of residency in assisted living facilities or nonmedical custodial care, which includes help with daily activities such as bathing, dressing, and eating.
On the other hand, Medicare does cover medical services provided by third-party providers at assisted living facilities, such as physical therapy and doctor’s appointments. It also covers a portion of expenses for specialized nursing or rehabilitation services following inpatient hospital care lasting at least three days, for up to 100 days at a Medicare-certified skilled nursing facility.
The Boundaries of Original Medicare
Original Medicare, composed of Part A (hospital insurance) and Part B (medical insurance), has specific limitations when it comes to assisted living. Medicare Part A may offer coverage for a brief stay in a skilled nursing facility after a hospitalization, but it does not cover the cost of living in an assisted living facility.
Meanwhile, Medicare Part B provides coverage for certain medical supplies and services deemed medically necessary, including:
- doctor visits
- preventive care
- diagnostic tests
- durable medical equipment
However, it also does not include the expenses for the assisted living facility or non-medical assistance provided within the facility. These costs would need to be covered separately.
Medicare Advantage’s Role
Medicare Advantage plans, also known as Part C, offer an alternative to Original Medicare.
These plans are offered by private insurance companies and provide all the coverage of Original Medicare, along with additional benefits. However, they do not cover assisted living expenses.
Certain Medicare Advantage plans may offer coverage for services that support seniors in living independently at home, such as home modifications, adult day care, and transportation.
But while these services can provide some similar benefits to those offered in assisted living facilities, they cannot replace the comprehensive care provided in a nursing home or an assisted living setting.
The Real Price Tag of Assisted Living
The cost of assisted living varies significantly due to factors such as location, amenities, and the required level of care. On average, the assisted living cost is around $3,628 per month. However, this figure can be much higher in certain states, with the average monthly cost in Massachusetts reaching $6,500.
Comparatively, assisted living is often less expensive than other forms of elder care. For instance, home care averages around $4,700 per month, and nursing homes are notably higher at about $9,000 per month. Despite this, the median annual cost of assisted living in the United States is approximately $54,000, which includes various services but not medical care.
Navigating Assisted Living with Medicare Advantage
Medicare Advantage plans offer seniors a variety of services, akin to those in assisted living facilities, including help with daily activities, meal delivery, and transportation. However, these plans are not designed to cover the full cost of residing in an assisted living facility.
In fact, while Medicare Advantage plans can cover services that support independent living, they do not encompass the entire cost of residing in an assisted living facility. In 2022, the median monthly cost for an assisted living facility was approximately $4,500 per person.
Supplementing Medicare: Does Medigap Extend to Assisted Living?
Medigap, or Medicare Supplement Insurance, is another option for seniors seeking to supplement their Medicare coverage.
These plans are specifically created to fill in the gaps left by Original Medicare. They assist with covering expenses like coinsurance, copayments, and deductibles.
However, assisted living expenses are not included in Medigap coverage. This is because Medigap policies are designed to address gaps in Original Medicare coverage, and Original Medicare does not encompass the costs associated with residing in an assisted living facility.
Paying for Assisted Living: Alternatives to Medicare
There are several alternatives available for financing assisted living when Medicare doesn’t cover all expenses. These include:
- Medicaid
- Long-term care insurance
- Veterans’ aid
- Other financial resources
Thoroughly examining these options and comprehending how they can assist with assisted living costs is necessary.
Aside from these options, financial tools like life insurance policies, reverse mortgages, and annuities can also be used to fund assisted living expenses. For instance, a reverse mortgage may be utilized to cover the expenses of assisted living if there is a second borrower residing in the home.
Medicaid and Assisted Living
Medicaid, a state and federal program, can be an option for seniors with limited financial resources. It provides coverage for certain expenses associated with assisted living for eligible residents in 47 states and Washington, D.C..
Medicaid offers waiver programs to help with the cost of personal care and support services in assisted living facilities. This allows residents to use their monthly income for room and board while retaining a personal needs allowance.
However, eligibility for Medicaid coverage in assisted living typically requires residency in the state where the application is being made, and there are income thresholds that vary for waivers and state plans.
Utilizing Private Insurance and Other Resources
Private insurance generally does not provide direct coverage for assisted living costs. However, it may offer coverage for certain associated expenses, such as:
- Medications
- Medical equipment
- Therapy services
- Home health care services
This can help alleviate some of the financial challenges associated with assisted living.
For veterans, there are benefits and programs specifically created to provide financial assistance for assisted living expenses. One such benefit is Aid & Attendance, which is provided to qualifying veterans by the U.S. Department of Veterans Affairs to address the expenses associated with long-term care or assisted living facilities.
Special Considerations for Skilled Nursing and Hospice Care
Despite its limitations in covering assisted living costs, Medicare does provide provisions for skilled nursing care and hospice care in assisted living communities under specific conditions.
For example, Medicare may provide coverage for skilled nursing care in assisted living communities for short-term stays, particularly for up to 100 days, if specific conditions are met.
When it comes to hospice care, Medicare will provide coverage in an assisted living community if the individual meets the eligibility criteria, which requires a doctor-certified life expectancy of 6 months or less. Medicare coverage for hospice care can encompass:
- Drugs for symptom and pain control
- Medical and support services tailored to the patient’s needs
- Some respite care
- Grief counseling for the patient and family.
Preparing for Long-Term Care: How to Plan Financially
Financial planning for long-term care includes investigating diverse payment options to cover assisted living costs, consulting with experts, and taking into account factors such as location, medical needs, and anticipated future healthcare needs.
The median annual living cost of assisted living in the U.S. is $57,684 or $4,807 per month, influenced by factors such as the type of senior care facility, senior care needs, location, and amenities.
Financial advisors can assist individuals in managing long-term care expenses by:
- Devising a strategy to manage expenses
- Determining the necessary types of care
- Assessing possible situations
- Examining insurance alternatives such as long-term care insurance.
Summary
Understanding the financial aspects of assisted living is crucial for planning and making informed decisions about long-term care. Although Medicare provides coverage for certain medical services, it does not cover the cost of residency in assisted living facilities.
However, alternatives such as Medicaid, long-term care insurance, and other financial resources can help bridge the gap. Planning for long-term care financially is paramount, taking into consideration various payment options, seeking expert guidance, and considering factors such as location, medical needs, and future healthcare expectations.
Frequently Asked Questions
→ How do you qualify for assisted living in NY?
To qualify for assisted living in NY, applicants must be medically eligible for nursing home care but not require around-the-clock nursing care, and they must have self-mobility to function in an assisted living environment.
→ What part of Medicare covers long-term care for whatever the beneficiary might need?
Medicare Part A covers long-term care, including custodial care, under hospice services when certain conditions are met.
→ Does Medicare cover assisted living in Wisconsin?
No, Medicare does not cover the cost of assisted living in Wisconsin, but it may cover some in-home care services like skilled nursing and home health aides.
→ What does Medicare cover in assisted living facilities?
Medicare covers medical services like physical therapy and doctor’s appointments in assisted living facilities, and also a portion of expenses for specialized nursing or rehabilitation services after a qualifying hospital stay.
→ What are the alternatives to Medicare for financing assisted living?
Some alternatives to Medicare for financing assisted living include Medicaid, long-term care insurance, veterans’ aid, and other financial resources like life insurance policies, reverse mortgages, and annuities. Consider exploring these options for financing assisted living.
ZRN Health & Financial Services, LLC, a Texas limited liability company
Russell Noga is the CEO of ZRN Health & Financial Services, and head content editor of several Medicare insurance online publications. He has over 15 years of experience as a licensed Medicare insurance broker helping Medicare beneficiaries learn about Medicare, Medicare Advantage Plans, Medigap insurance, and Medicare Part D prescription drug plans.