How To Pay For Memory Care Facilities

Although memory care facilities may differ in their details, generally, memory care is any residential community that offers care specifically for those with dementia. As our population ages, there is an increasing need for residences that focus on dementia, including Alzheimer’s disease, providing compassionate care to seniors who are no longer able to live in their own homes or with caregivers. 

Nearly 7 million older adults in the U.S. have Alzheimer’s, according to the Alzheimer’s Association — it’s the most common type of dementia. And researchers are expecting dementia cases to reach a rate of 1 million diagnoses per year by 2060.

The burden on caregivers may be significant when caring for a loved one with dementia in their homes, especially in the disease’s later stages. For some families, a memory care residence may be the answer. Memory Care facilities can provide compassionate, targeted medical treatments and care — but that care can be costly. 

Knowing how to pay for memory care can help you make the best decision for your senior with dementia. Use this guide to navigate the costs of memory care and how to pay for memory care.

There are several types of senior residences, and it can be confusing to figure out which type is best for your senior loved one. From independent living to assisted living to nursing homes, each offers a living experience for seniors with different abilities. Each option may suit your senior with dementia depending on their symptoms and abilities, but memory care is specifically designed to support those with cognitive impairments. 

Memory care facilities feature staff trained specifically to care for those with Alzheimer’s and other forms of dementia. The residences often have safety features such as locking doors and enclosed outdoor spaces to help prevent wandering. Memory care facilities are likely to offer opportunities for people with dementia to socialize, participate in classes or workshops, and engage in activities they enjoy. Residents will have assistance with their activities of daily living (ADLs), if needed, and typically live in a private or semi-private room. 

The cost of memory care will vary depending on the facility’s amenities, location, and other factors. Based on Caring.com’s proprietary senior living cost data, memory care costs $5,100 a month, though other leaders in the industry have reported memory care costs hovering around $8,000/month. Individual rates vary, and asking for cost information from several memory care facilities near you is likely to give you a range of pricing options.

Despite the high price tag, memory care is neither the cheapest nor the most expensive option for senior care. If your loved one is in an assisted living facility, for example, they will pay a median of $5,350/month, according to the CareScout Cost of Care Survey. Paying for an adult day health care facility, meanwhile, comes in at a median of $2,058. At the high end, if your senior requires the care of a nursing home, they may pay a median of $9,733/month.

Why does memory care cost so much? The specialized care that your senior with dementia receives in a memory care facility requires staff with extensive training in dementia care. The facility is often carefully designed to keep seniors safe and secure, with low staff-to-resident ratios, locking doors, monitoring systems, and enclosed outdoor spaces. 

Facilities are likely to provide programs and therapy for your loved one with dementia, and support for family members. All these amenities can be pricey, and the costs are likely to be passed on to residents.

Your location may also play a role in determining rates. Densely populated regions where memory care facilities are in high demand may lead to a higher rate.

Once you’ve decided that memory care is the best option for your loved one, there are more hurdles ahead. How will you cover the cost of memory care? Does Medicaid pay for memory care? And what about insurance? In some cases, it may work best to combine several sources of income to pay for the costs associated with your senior’s residence. 

Per Caring.com’s 2024 dementia care data study, the majority of surveyed dementia caregivers in the U.S. are paying for memory care using Medicare or Medicaid. Social Security and their loved one’s retirement fund tie for the second most-popular ways to pay for memory care.

Your senior with dementia may have assets that can help cover the cost of memory care. Savings accounts, annuities, pensions, and other financial vehicles may provide financial support. Perhaps your loved one owns jewelry, artwork, antiques, or other valuable items that can be sold. Your family may trade in the opportunity to inherit these items in the future for the peace of mind the liquidation of those assets can bring now. 

 

Other ways to cover the cost of memory care include:

If your senior owns a house or condo, selling or renting it out could be a viable source of income. Another option is a reverse mortgage, but be aware that this is basically a loan against the value of the house. If a spouse or adult child is living there, they will, at some point, need to pay off the loan. Before signing any reverse mortgage paperwork, consult with a financial advisor to ensure you understand the ramifications of this choice.

If your loved one had previously purchased long-term care insurance when they were younger, the policy may cover all or part of the memory care costs. Life insurance may help as well. 

There are a few options there: you may be able to sell the policy, although this will mean forgoing the death benefit. Or, if the policy has accelerated death benefits, also called terminal illness riders, you might be able to tap into these. 

Some policies, however, require the policyholder to have been diagnosed with a permanent disability or a terminal illness to make use of this option. It may also reduce the death benefit available to beneficiaries,

Note: Long-term care insurance and life insurance need to be purchased well in advance. It is not something that you should pursue once in a memory care facility, but rather something you can liquidate to cover the memory care facility if your loved one with dementia already has the insurance.

Does Medicaid pay for memory care? Since each state administers Medicaid separately, it can be tricky to determine the coverage parameters. Medicaid does cover nursing home care, so if your loved one is in a dementia unit in a nursing home, Medicaid may cover the cost of memory care. 

There are eligibility requirements, however. Your loved one will generally need a high level of medical care to be admitted to a nursing home. Medical services used by your senior while in memory care may also be eligible for Medicaid benefits.  

If your senior loved one is an honorably discharged veteran, the VA may help. One option available to qualifying veterans is the VA’s Aid and Attendance benefit (A&A). Aid and Attendance benefits are a tax-free monthly payment (on top of the regular pension payments) awarded to veterans and their spouses with disabilities not related to service. If your veteran’s dementia impacts their ability to perform ADLs, the A&A benefit may come into play and help supplement other sources of income.

Memory care facilities provide customized care for seniors with Alzheimer’s disease and other dementias. They are usually staffed with professionals trained in dementia care and provide comfortable, safe living spaces for their residents. Because of the level of care, low staff-to patient-ratio, and secured facility, memory care can be expensive. You can cover the cost of memory care through multiple sources of income, including insurance, veteran’s benefits, Medicaid, and the sale or rental of a home or other assets.

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• Alzheimer’s is accelerating across the U.S. (2017). AARP
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• Dementia special care units in residential care communities: United States, 2010. (2013). National Center for Health Statistics
• Does long-term care insurance cover memory care? A comprehensive guide. (2023). National Council on Aging
• Does Medicaid cover memory care? (2023). National Council on Aging
• Does Medicare cover memory care? A comprehensive guide. (2023). National Council on Aging
• Fang, Michael, et al. (2025). Lifetime risk and projected burden of dementia. Nature Medicine
• Mandatory & optional Medicaid benefits. (n.d.). Centers for Medicare & Medicaid Services
• Navigating memory care costs: What to expect financially. (2024). Downers Grove Rehab & Nursing
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• VA Aid and Attendance Benefits and housebound allowance. (2024). U.S. Department of Veterans Affairs