Does Medicare Cover Assisted Living?
Assisted living can be the best option for you or a loved one who needs some help with the everyday activities of life. It’s designed for seniors who can benefit from some assistance but don’t need the full-time care of a nursing home. According to the U.S. census, in 2019 one million of the 328 million people over 65 living in the United States resided in assisted living.
The average monthly cost of assisted living is $4,300 nationwide, so it can be challenging to find the resources to pay for it. Seniors who have Medicare coverage may wonder if it will pay for any of the expenses of assisted living. Although assisted living isn’t covered under Medicare at this time, other resources are available to help seniors afford it.
Below, we break down the role of Medicare, Medicaid and other forms of financing available to help you pay for assisted living.
Is Assisted Living Covered by Medicare?
Medicare is a health insurance program provided by the U.S. government for seniors age 65 and older and some younger people with disabilities. Although it doesn’t pay for assisted living, it covers medical expenses for seniors. Medicare is divided into sections that cover different areas of health care:
- Medicare Part A/Hospital Insurance: Hospital stays, limited nursing home care, hospice care and some home health care costs
- Medicare Part B/Medical Insurance: Preventative care, doctors’ office visits, outpatient care and medical supplies
- Medicare Part D/Prescription Drug Coverage: Prescription drugs and vaccinations
Medicare Part A is funded by taxes on income, and most people over 65 get this insurance at no cost. If a senior or their spouse has worked for a certain amount of time and paid taxes, they should be eligible. This coverage may start automatically for seniors already receiving Social Security payments. However, those who are not enrolled need to go to the Medicare enrollment site and sign up to receive benefits.
Medicare Part B, the insurance for doctors’ office visits, must be chosen during enrollment to avoid paying an extra penalty for adding it later. After the initial enrollment, Medicare coverage choices can be changed at certain times of the year without a penalty.
Medicare Part D, the prescription drug program, is optional, and the yearly cost can range from a few dollars to a couple of hundred dollars, based on income. Declining a drug benefit plan upon Medicare enrollment can add a permanent penalty charge to Medicare payments going forward.
People over 65 can also choose to enroll in a Medicare Advantage Plan offered by a private provider. These health insurance plans, administered by insurers or hospital systems, are also referred to as Medicare Part C. Medicare Advantage Plans include all the services provided by Medicare Part A and B, and some cover dental and vision costs. Not all plans include prescription drug coverage, so seniors should examine Medicare Advantage Plans carefully before choosing to enroll in one.
What Medicare Does Cover in Assisted Living
For seniors in assisted living, Medicare continues to cover medical care and the cost of medical supplies and prescription drugs. However, Medicare doesn’t pay for any of the personal care costs associated with assisted living. There are rare exceptions to this rule, and guidelines vary by state. We’ll explore this in more detail, along with other financial aid options that can make assisted living more affordable.
Does Medicare Cover Any Long-Term Care?
Medicare pays for long-term medical needs, but not personal care or assisted living costs. Medicare coverage does include limited nursing home care and temporary rehabilitative services. In the United States, 12.7% of seniors have a disability, 6.9% are veterans, and 5.2% receive Supplemental Security Income (SSI). These seniors have access to resources including community programs, veterans’ benefits, and medical programs available to SSI recipients.
Medicare Coverage of Nursing Homes
Seniors with a disability or chronic health problem that requires around-the-clock care may qualify for Medicare nursing home coverage for up to 100 days. However, Medicare will only cover skilled nursing needs, and it isn’t available for assisted living facilities that provide help with the everyday activities of life.
Seniors with low incomes and few assets may qualify for additional nursing home care through Medicaid. Initially, most seniors pay out of pocket for nursing home care until their resources run out. After that, Medicaid may eventually fill the gap, depending on each person’s income and assets.
For married couples, if one spouse is ill, they are allowed to assign their assets to the other spouse so they can qualify for Medicaid. Because of this policy, a married couple doesn’t have to become completely impoverished before qualifying for help.
Medicare Coverage of Home Health Care
Another option for seniors who need assistance is home health care. When this service is ordered by a doctor in place of in-patient treatment, it’s covered by Medicare. Speech, occupational and physical therapy can often be provided at home instead of in a care facility. Home health care coverage is usually temporary, but it may become long-term for seniors as an alternative to full-time care in a nursing home.
Long-term care insurance can fill the gap in paying for both nursing home care and home health care. Insurers may cover only certain types of nursing home facilities and home health care providers, and some policies exclude pre-existing conditions. That’s why it’s vital to do your homework and choose wisely among providers licensed by the state where you live.
Who Qualifies for Medicare?
Everyone who has paid Medicare taxes qualifies for Medicare health insurance coverage when they turn 65. Younger people with disabilities may also qualify, and people who have not paid Medicare taxes may be eligible to buy Medicare Part A coverage.
How to Apply for Medicare
Seniors can sign up for Social Security at least four months before turning 65 to have automatic access to Medicare. Part A, which covers hospitalization, is free. Seniors can also choose to enroll in Part B, routine medical care coverage, with the cost determined by income. Most people will pay the standard premium for Part B ($148.50 as of 2021), which is deducted from their monthly Social Security benefit.
Income-based increases in the cost of Part B begin for incomes over $88,000 for individuals and $176,000 for couples. Seniors can enroll in Medicare parts A and B online, and you must have both of these to apply for Medicare Part D, the prescription drug plan. Stand-alone drug plans are available, and some Medicare Advantage Plans also offer prescription drug coverage. To compare prescription drug plans and Medicare advantage Plans side-by-side, visit the Medicare prescription drug page.