Does Medicare pay for assisted living? Understand what's covered and your other options

Assisted living can be expensive, since almost everything must be paid for out of pocket. Costs average $4,500 per month nationally and can easily top $6,800 monthly in some cities. However, if you or a loved one are thinking about a move, there are a few ways you can make the most of this transition.

What is assisted living?

Assisted living provides a more structured setting for people who need some help with instrumental or basic activities of daily living. There are roughly 30,600 assisted living communities, with about 1.2 million licensed beds in the U.S. Depending on the residence, you have your own apartment or an efficiency room, and access to staff 24/7, if needed. You may share the residence with as few as 25 to more than 100 other residents, according to  the National Council on Aging. 

Each community is different, but most offer help with:

• bathing, dressing, or medication management
• meal preparation as well as a communal dining room
• social workers or activities directors to keep you occupied, engaged, and socially involved
• exercise, health and wellness programs
• housekeeping, transportation to shopping or doctor’s appointments

Assisted living facilities do not provide skilled nursing—that is, care by a registered nurse (RN), licensed practical nurse (LPN) or certified nursing assistant (CNA). So, if you need more hands-on daily care, you may not qualify.

Paying for assisted living

Medicare covers the medical services that people in assisted living need, just as they would if you were still at home, but does not pay for housing, room, food or other fees, says Gretchen Jacobson, vice president, Medicare, at The Commonwealth Fund. It also won’t pay for aides or personal care services, with limited exceptions.

“If they have low income and assets they might qualify for Medicaid or a state-funded program that might cover this. But for everyone else, they must pay for this help entirely themselves or rely on friends and family for help.”

Medicaid, the joint federal-state program for low income individuals, may help cover some assisted living costs, such as memory care, homemaker or personal care assistance, depending on the state you’re in and the specific coverage needed. However, Medicaid will not pay for room or board at an assisted living facility either, according to the American Council on Aging.

Unfortunately, most people end up selling their assets or spending their savings to cover the costs of long-term care, says Jacobson. “We do not have a national system that covers long-term care and instead we have a patchwork system that varies from state to state. Middle income people in particular – and their families – really struggle with affording the costs of long-term care in most states.”

Long term care insurance may pay for assisted living, but these policies are unaffordable for many people, she points out.

Other options for those who can’t live independently

If you or a loved one can no longer live independently, you might also consider:

Group homes

Also known as adult family homes, board and care homes, residential assisted living, or residential care homes), group homes provide a more “home-like” environment, along with assistance and socialization on a small scale (usually 10 or fewer people). Residents may have a private or semi-private room, 24/7 supervision, three meals a day, recreational and social activities, help with personal care, medication assistance and case management. Some group homes offer specialized care for those needing more help, or memory care. Licensing, costs and operating requirements vary by state.

Shared housing programs

These programs match older adults with one or more roommates, as a way to help the senior remain in their own home. These arrangements usually include a private bedroom for each person and some common living areas.  Seniors receive rent or help with tasks like transportation to doctor appointments, help with shopping or cooking, or home maintenance, and/or rent from their housemate.  Some programs which facilitate this arrangement may offer home-visits, mediation, and assistance obtaining social services. The national shared housing directory has a list of home sharing programs by state for those who may be interested in a home-sharing arrangement.        

Senior apartments

These apartments offer amenities geared towards older adults, such as communal eating spaces, transportation and recreational activities. Depending on income and location, residents may be eligible for rent subsidies through federal, state or local housing programs. Some senior apartments may rent only to those 55 or older; some offer luxury amenities like swimming pools, concierge service or on-call transportation.

Enriched housing programs

These housing programs provide more independence than group homes and usually serve those 65 or older, in a community-integrated setting. They usually consist of a private, efficiency apartment with a kitchen. Depending on location, part or full-time supervision is provided, as well as congregate meal options. 

Additional support at home

Adults 55 and older who live in a PACE area and has access to Medicare or Medicaid may be eligible for the PACE program. This all-inclusive care plan may include in-home care, respite care, and/or adult day care in the person’s home, or in the home of a relative or assisted living facility. PACE does not cover room and board but will provide personal, homemaker or home health services.

Continuing care retirement communities (CCRCs)

Sometimes known as life plan communities, CCRCs provide multiple senior living options all within one large campus. Residents commonly move into a CCRC while they are mostly still independent. Then, if needed, they can move to other levels of care throughout their time there. Residents pay a monthly fee to access various amenities. Many CCRCs require an entrance fee and contract, based on local real estate costs.