Does Medicare Advantage Pay for Assisted Living?

If you or your loved one is struggling with activities of daily living (ADLs), such as bathing or dressing, or need help with tasks such as laundry or medication management, an assisted living facility (ALF) may be the right choice. These residential settings offer help with daily tasks and have custodial staff available at all hours. 

 

However, assisted living can be pricey. The national average for assisted living costs is $4,200 per month, based on Caring.com's proprietary senior living cost data. When determining if an ALF is the right option for your situation, one question may arise during your search: Does Medicare Advantage pay for assisted living? 

Medicare and Medicare Advantage offer financial assistance for many of the health challenges seniors may face, and you may assume that it will cover the costs for this type of living situation. The reality, however, is a little more complicated. Fortunately, Caring.com created this guide to help you determine if Medicare will pay for assisted living.

 

Original Medicare is a health insurance program provided by the federal government for those aged 65 and over, as well as younger people with disabilities. Original Medicare pays for inpatient care at hospitals and skilled nursing facilities (Part A) and some outpatient costs (Part B). Optional Part D pays for prescription drugs. 

Medicare Advantage, meanwhile, is slightly different — it's a way of receiving your Medicare Part A and B benefits (and sometimes Part D) through the intermediary services of a private insurance company. There may also be other benefits, such as a gym membership or hearing and vision care. It's also sometimes called "Medicare Part C" and is an available option for anyone who qualifies for Medicare coverage.

Medicare Advantage may have an additional premium that you'll pay along with a basic cost for Parts A and B, but it's generally low. Its benefits make it an attractive option for many retirees, but does Medicare Advantage cover assisted living? Not exactly. 

To break it down further, health insurance companies that offer Medicare Advantage plans must cover the same services and benefits included in Original Medicare, and they cannot charge a co-pay or coinsurance for services that are covered 100% under the standard Original Medicare policy. Covered medical services include:

• Hospital care
• Skilled nursing care
• Outpatient surgery
• Lab tests
• X-rays
• Screenings for depression, cancer, and diabetes
• Medical equipment and mobility aids
• Emergency transportation services
• Inpatient mental health care
• Hospice care

In addition to these standard services, many Medicare Advantage plans cover additional benefits, such as:

• Prescription drugs
• Gym memberships
• Routine dental, hearing, and vision care
• Non-medical in-home care services
• Therapeutic massage
• Adult day health care

In most cases, Medicare beneficiaries with Original Medicare don't pay for Part A coverage but have a monthly premium for Part B. In 2024, the standard Part B premium is $174.70. Seniors with Medicare Advantage plans will pay this monthly premium and may also have an additional premium for their specific plan. On average, KFF reports that Medicare Advantage premiums reached $18.50 per month in 2024, though more than half of enrollees pay no premium other than the basic cost of Part B.

Medicare Advantage plans are available to seniors aged 65 and over who qualify for Original Medicare. To be eligible, seniors must be legal U.S. citizens or be lawfully present in the U.S. Additionally, they must live within their plan's service area. You can join a Medicare Advantage program even if you have a pre-existing condition.

Does Medicare Advantage pay for assisted living, dementia and memory care, or other similar situations? The short answer is: not exactly. Your Medicare Advantage program cannot cover the cost you pay to live in a residential facility. Since assisted living is not considered medically necessary, unlike skilled nursing facilities, it won't be covered.

Medicare Advantage plans only cover the costs of qualified medical care that seniors receive while residing in an assisted living facility. For example, acute inpatient and outpatient care is covered just as it is for seniors who reside in their own homes. However, Medicare Advantage plans do not pay for the cost of the assisted living facility itself.

One possible way around this: since 2019, Medicare Advantage plans have been able to offer non-skilled in-home care, potentially allowing those in need of some support to remain in their homes instead of moving to an ALF. Although the elements covered are likely to vary among plans, they may include things like:

• Nutrition services
• Home modifications
• Adult day health care
• Telehealth services
• Personal care services, including tasks like preparing food, dressing, and bathing
• Transportation to medical offices
• Skilled nursing care

If you or your loved one is in need of some support but is not certain if assisted living is necessary, they may find some of the help they need by utilizing the parts of their Medicare coverage that provide in-home care.

In many cases, however, these benefits are limited. For example, non-emergency transportation may only be available a certain number of times per year or within a certain period of time following hospitalization, depending on the policy.

It's important to note that Medicare Advantage plans don't explicitly cover assisted living, with many of its additional benefits aiming to promote aging in place.

Despite the expanded coverage options available through Medicare Advantage plans, seniors cannot receive assisted living coverage through these plans. Here are a few of the expenses that are not generally covered by your Medicare Advantage policy:

• Room-and-board and utilities fees
• activities fees 
• Meals
• Custodial care, such as help with ADLs like eating and bathing
• Laundry services
• Non-medical transportation
• Pet fees
• Personal services, such as salon care or wellness programs

Although Medicare does not cover the basic costs of assisted living, that doesn't mean you won't have options if you choose this living situation. Here are a few sources that may help pay for assisted living costs if you qualify:

• Medicaid: Medicaid, a public health program for people with low income, offers Home and Community-Based Services (HCBS) waivers in some states to help pay for assisted living. Although they will not pay for room and board, custodial care may be covered.
• VA Benefits: Basic veterans' health care benefits do not cover assisted living costs, but some Veterans Affairs (VA) programs may. If you are eligible and signed up for VA health care and it is determined that you need a specific service such as physical therapy, help with ADLs, or other medical care, the VA may help.
• Long-Term Care Insurance: This type of insurance coverage covers medical or personal care, along with costs like skilled nursing care, help with ADLs, and various types of therapy. Since each policy varies, you'll need to read your coverage to know if it applies to long-term care insurance.
• Reverse Mortgages: A reverse mortgage allows you to turn your home's equity into money that can be spent on health care — including assisted living expenses. However, there are strict regulations on implementing this type of transaction, and a reverse mortgage is basically a loan that must eventually be paid back.
• Private Funding: You may have private assets, such as from a whole life or other type of permanent life insurance policy, that can be used to pay for assisted living. It can be helpful to work with a financial professional or tax accountant to help you make the best use of your available funds.

One of the first questions to ask when considering a lifestyle change to make care easier for an older person is: will Medicare pay for assisted living? The answer is a little complicated. Although Medicare and Medicare Advantage may pay for some of the costs associated with assisted living, they will not cover room and board or many other aspects of that care. That doesn't mean you're without resources, though, as you may be able to access private funding, VA benefits, and other income sources to help with the non-inconsiderable costs of an assisted living facility.

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