Are the Costs of Assisted Living Facilities Covered by Supplemental Insurance?

No, the costs of assisted living facilities are not fully covered by supplemental insurance. While supplemental insurance, sometimes referred to as Medigap policies, can help bridge the gap between basic policies, there are still many limitations to the coverage it offers for long-term care, including assisted living.

According to Genworth’s 2021 Cost of Care Survey, the national median cost of assisted living is $4,500 per month, which totals $54,000 yearly. As many seniors live on fixed incomes, accessing financial support is essential in ensuring they have adequate funds to cover the cost of assisted living. Understanding long-term care insurance can help seniors and families effectively budget for their long-term needs.

Original Medicare is a federal health insurance program that supports seniors’ medical needs. It consists of two parts: Part A, which covers hospital stays, and Part B, which covers medical expenses. However, this leaves participants responsible for certain out-of-pocket costs, such as deductibles and copayments.

Supplemental insurance, or Medigap, bridges these gaps. Provided by private insurance companies, Medigap policies cover out-of-pocket costs, including co-payments, coinsurance and deductibles such as prescription drugs. Most states offer 10 lettered plans: A-D, F, G and K-N. Each plan includes a range of benefits. Since all policies follow standardization, they share the same basic benefits.

While Medigap covers items that Medicare doesn’t, there are limitations to its benefits. As these plans complement Original Medicare (Parts A and B), they do not cover services outside the Medicare program. Certain plans cover skilled nursing care; however, Medigap coverage generally doesn’t extend to the following:

• Long-term care
• Vision or dental care
• Hearing aids
• Eyeglasses
• Private-duty nursing

While assisted living facilities often provide medication management and care coordination services, most services, such as meals, housekeeping and personal care assistance, do not fall under the classification of medical care.

Many seniors turn to alternative insurance plans for more comprehensive financial support. Older adults with limited incomes and assets can leverage the support of Medicaid through its assisted living waivers. Commonly known as Home and Community Based Services (HCBS) waivers, these programs allow eligible individuals to receive long-term care in assisted living facilities or their own homes rather than institutional settings, such as nursing homes. Medicaid waivers are state-sponsored programs, so eligibility requirements and covered services vary.

Veterans or surviving spouses may also look to Veterans Health Administration (VA) benefits for financial support. Programs such as Aid and Attendance offer monthly payments for seniors who require assistance with daily tasks, including bathing, feeding and dressing. For more information about financial support options, consider contacting your local Aging and Disability Resource Center (ARDC).