Medicare Plans Resource for Assisted Living and Long-term Care

Aging is often accompanied by decreasing ability to perform self-care activities and deal effectively with responsibilities including finances, shopping, medications, and transportation. On average, almost 70% of people who are over 65 years old will need help in the form of long-term care (LTC) for approximately three years before the end of life.

LTC is generally considered custodial or personal care and is not covered by Medicare. Assisted living facilities (ALFs) are a type of residential LTC option. Medicare does not pay for ALFs either, but whether you are receiving LTC services in your community or at an ALF, Medicare will pay for medically necessary skilled care.

This article includes information about ALFs, LTC options, your rights as a Medicare beneficiary, and ideas about how to help cover out-of-pocket costs.

What Is Assisted Living or Long-term Care?

Assisted living is a type of residential long-term care. Assisted living facilities (ALFs) are homes for people who need help with their care and activities of daily living but not to the level or extent a nursing home provides. ALFs are typically regulated and licensed by the state in which they operate.

There are different levels of care in most ALFs catering to the needs of individual residents. Lower levels of care are for more independent people while higher levels provide more assistance. Costs rise with the level of care. If needs exceed what the ALF can provide, staff may recommend transfer to a nursing home.

Long-term care (LTC) is a broad term to describe care that is typically custodial vs. skilled in nature. LTC is needed over a period of time to support a person’s independence and ability to perform personal care and daily activities. LTC often takes place in nursing homes, but there are other options to consider if you or your loved one cannot live independently at home. These options include services such as:

Extra support to help you remain at home, including home care, adult day care, meal and transportation services, and other community resources.
An accessory dwelling unit (ADU) on your home or property so you or your loved one can remain near family but still live independently. Zoning rules may apply.
Subsidized senior housing, which may include help with meals, shopping, and laundry.
Continuing care retirement communities (CCRCs) may include apartments for independent living, assisted living, and nursing homes, depending on your level of need.
Group living communities or residential care communities. ALFs are an example of this type of LTC.

PACE (Program of All-Inclusive Care for the Elderly) is a community-based program designed to help people with Medicare and Medicaid live safely with appropriate support outside of a nursing home.

Does Medicare Cover Assisted Living?

Medicare does not cover assisted living room and board costs but will cover medically necessary medical care and services you need while residing in an ALF.

What Are Your Long-term Care Rights Under Medicare?

As a Medicare beneficiary, you have these basic rights:

To safety when you get health care
To get the health care services the law says you can get
Protection against unethical practices
Protection of your privacy

If you receive LTC in a nursing home or facility, you have rights and protections under federal and state law as a resident, including the right to:

Be informed
Make your own decisions
Have your personal information kept private
Receive information about your rights and responsibilities in writing in a language you understand before you are admitted
Be treated with dignity and respect, free to make your own daily schedule
Participate in activities offered at the facility
Be free from discrimination based on race, color, national origin, disability, age, or religion
Be free from verbal, physical, sexual, and mental abuse and neglect
Report abuse and neglect; the facility must investigate any reports within five working days to proper authorities
Be free from chemical (drugs) or physical (like side rails) restraints put in place for the staff’s convenience
Make complaints without fear of punishment
Get proper medical care, being fully informed and involved in your plan of care
Have your representative informed if your condition, treatment, or level of care needs change or the facility plans to transfer or discharge you
Get written information on services and fees when you are admitted and if services and fees change
Manage your own money or have someone you trust do this for you; if you ask the facility (in writing) to keep an account for you, they must protect your funds
Get proper privacy, property, and living arrangements, including sharing a room with your spouse if you both agree to do so
Spend private time with visitors
Get social services to help with counseling, social, legal, and financial problems and discharge planning
Leave the facility for visits or to move out
Have protection against unfair transfer or discharge
Form or participate in resident groups or councils
Have your family and friends involved with your care

All states must have a long-term care (LTC) Ombudsman program. An ombudsman serves as an advocate for residents and helps to resolve problems or violations of rights. Residents and family members can ask LTC administrative staff about how to contact their local ombudsman.

What Parts of Medicare Cover Long-term Care?

Medicare type	What long-term care it covers
Medicare Part A	Does not cover LTC. You still have access to Part A benefits, such as hospitalization if your condition requires it. You can receive hospice care while residing in a long-term care facility.
Medicare Part B	Does not cover LTC. You still have access to Part B benefits, such as doctor visits, preventive care, and ambulance transport if medically necessary. Durable medical equipment (DME) is typically included in your facility room and board costs. If you receive community-based LTC services while residing at home, Part B covers medically necessary DME.
Medicare Advantage (Part C)	Does not cover LTC unless you qualify for a Special Needs Plan (SNP). The majority of Medicare Advantage SNPs are for people dually eligible for Medicare and Medicaid (D-SNPs). A small percentage of Medicare Advantage enrollees are eligible for an Institutional SNP (I-SNP). If you receive community-based LTC services while residing at home, some Medicare Advantage Plans may cover extra benefits, such as help with meals and transportation.
Medigap	Does not cover long-term care. but will help cover your costs related to Part A and Part B services you may access if you are receiving LTC at home or in a facility.
Medicare Part D	Does not cover long-term care, but covers the prescription medications you take while receiving LTC.

Who Is Eligible for Medicare Coverage of Long-term Care?

Original Medicare Parts A and B do not generally cover LTC. However, as a Medicare beneficiary receiving LTC, you have access to medically necessary services. For instance, if you reside in an ALF, you may need to visit your doctor. Medicare Part B covers your doctor’s visit. If you need to go to the hospital due to injury or illness, Medicare Part A covers your inpatient hospital care. You must have Medicare Part A and/or Part B to be eligible for medically necessary services you get.

If you have a Medicare Advantage Plan, you will already have Part A and B and receive Medicare-covered services through your plan. Depending on your plan, you may have access to other LTC benefits, such as transportation to doctor’s visits or meal delivery. Like Original Medicare, Medicare Advantage Plans do not generally cover LTC’s larger expenses, such as room and board costs.

What Are Assisted Living Services?

Assisted living services are provided on a continuum of care depending on your need and level of independence. Each facility has its own system and number or types of levels of care that generally follow this formula:

Level One: Lowest level of care if you are mostly independent but need minimal assistance or supervision with daily tasks.
Level Two: Moderate or medium level of care if you require hands-on assistance with some of your daily activities.
Level Three: Highest, most comprehensive level of care if you have needs that require multiple staff to help you.

If you reside in an ALF, you will have an apartment or suite and access to general services, such as:

Meals and snacks
Opportunities to join in facility activities
Laundry and housekeeping
On-site medical staff
Utilities
Opportunity to have a pet
Wellness and exercise programs
Transportation to and from medical appointments

If you need it, you may have assistance with your medications and health assessments conducted by health care professionals. ALF regulations limit the type of care that can be provided. If your health condition warrants the need for more skilled care than an ALF can provide, staff may recommend transfer to a nursing home.

Some ALFs have memory care units designed for people who have cognitive impairment. These units are secure and staffed with specially trained employees to maintain a safe and calm environment.

What Long-term Care Services Does Medicare Cover?

Medicare does not cover LTC services, which are generally considered custodial, if that is the only care you need. If you are receiving skilled care in a hospital, nursing home, or at home through a home health agency, Medicare may pay for home health aides. Home health aides provide assistance with personal care and daily activities.

What Long-term Care Services Does Medicare Not Cover?

Medicare does not cover LTC services that are provided in the absence of skilled care.

When Should You Consider Long-term Care or an Assisted Living Facility for Yourself or a Loved One?

When you or your loved one need more assistance with day-to-day tasks due to compromised health, you should consider LTC options to build in an extra layer of support. For most people, the best place to start is to add extra help that enables you to stay in your own home. For instance, a meal delivery program like Meals-on-Wheels or adult day care programs are community-based LTC options that may extend the time your loved one can stay at home without relying on family and unpaid caregivers to meet all their needs.

If you or a loved one lives alone or with a spouse who is unable to provide sufficient care, it may be time to consider a move to a residential facility or nursing home. For most people, this is a big, expensive move, which is motivated by a safety incident (like a fall) or a deterioration in physical or cognitive health that makes living at home unfeasible.

The best time to consider a move is before it becomes necessary. It can take months to investigate all your LTC or ALF options to decide which ones fit your preferences and budget. Some facilities may have wait lists, too. Here are some precursors to watch for:

Increased potential safety incidents, such as leaving the door unlocked or the stovetop burners on, forgetting to take medications, taking the wrong medications, or other significant cognitive decline.
Loneliness. Some people experience depression at home alone and may thrive in an ALF environment with opportunity for social interaction.
Increased difficulty with daily activities, such as bathing, dressing, or eating.
Growing dependence on family and unpaid caregivers to assist with day-to-day tasks.

Talk with your local Area Agency on Aging, your LTC Ombudsman, or a social worker affiliated with your primary physician’s office about your LTC options.

What Is the Difference Between Home Health Care Services and an Assisted Living Facility?

Home health care services

Assisted living facilities

Home health care services are provided in your home by skilled medical professionals who are operating in accordance with physicians’ orders. Home health care services are limited in scope and short-term in duration. The goal of these services is to restore you to your previous level of functioning after an illness or injury or at least help maintain your level of functioning or slow your decline.

Medicare covers medically necessary home health care services. Federal and state entities regulate home health care, which is provided through Medicare-certified home health agencies.

ALFs are residences geared toward housing people who are unable or unwilling to be at home, but don’t require skilled care.

Medicare does not cover ALFs. ALFs are governed by state rules and regulations and may be Medicare and Medicaid certified. ALFs provide a lower level of care, and are thus less expensive, than nursing homes.

How Much Does Assisted Living Cost?

Costs for assisted living vary depending on where you live and what level of care you receive. Expect to spend a minimum of $3,500 per month for the lowest level of care in a modest facility up to several thousand dollars for the highest level of care in a premium facility. On average, people reside in ALFs for about a year before needing a higher level of care at a nursing home.

Because ALFs create an individualized plan of care for each resident based on an in person assessment, ALFs do not publish monthly costs on their websites. They do list amenities and services available, however. According to a Genworth cost of care survey for 2021, the average national cost per month for a one-bedroom ALF apartment is $4,500.

What Are Your Options to Help Pay for Assisted Living?

Medicaid

If you meet financial and functional criteria, Medicaid may help to pay for LTC support you receive while residing at an ALF through a Home and Community Based Services (HCBS) waiver. The waivers are intended to support people living independently at home, but can extend to alternative residences, such as ALFs and memory care units. Medicaid won’t cover ALF room and board costs, but each state can choose to supplement Social Security income through an Optional State Supplementary payment to people who are eligible for Medicaid. These payments can be used to help pay for assisted living. Contact your state Medicaid office to find out if you are eligible for any Medicaid benefits.

Long-term care insurance

Long-term care insurance policies may help cover assisted living costs. For instance, you may receive a daily dollar amount for room and board until your lifetime maximum allowance is reached. Policies vary, but most require that you meet two criteria before your policy pays:

Benefit triggers determine if you are eligible for benefits. These are typically based on your inability to perform activities of daily living or your compromised cognitive function.
The elimination period is the time between when you are deemed eligible for benefits and when your policy pays. You must pay for costs during the elimination period, much like you have to pay a deductible on an insurance plan first.

Reverse mortgage

A reverse mortgage allows you to receive cash against the value of your home without selling it. Talk with your insurance agent or broker about whether or not a reverse mortgage is a good plan for you.

Whole life insurance policy

Your whole life insurance policy may help pay for assisted living if you have long-term care benefits as part of your contract.

Annuity

You may have an existing annuity account or purchase one through an insurance company to help pay for LTC expenses, such as ALF room and board costs. An annuity makes regular monthly payments to you through a single premium payment. Talk with your insurance agent about annuities and when you may be eligible to begin regular withdrawals.

Veteran’s benefits

Veterans may receive LTC benefits through the United States Department of Veterans Affairs (VA). Veterans with service-related injuries or disabilities can get help paying for ALF care at specific locations. VA pensions can be used to pay for ALFs. To find out your level of benefits and how to access them, contact your VA social worker. Alternatively, call the VA’s toll-free hotline at (877) 222-8387, Monday through Friday, 8 a.m. to 8 p.m. Eastern time.

Medicare for Assisted Living and Long-term Care Expert Tips

If you or your loved one is moving to an ALF, start with the lowest level of care possible and add services (and cost) as you need to. Stay in close communication with the ALF administrator about the level of care options available to you. You may be able to supplement ALF services yourself without having to incur extra costs. For instance, you may set up medication reminders for your loved one or assist with bathing once a week.
Visit several ALFs in your area and meet with staff before you make a final decision. Ask for pricing up front and learn how and when you may incur higher costs if your condition worsens. If possible, talk with current residents or their families about their experience with the ALF you are considering.
Allow you and your loved one time and space to grieve the loss of independence that happens when LTC becomes necessary. Seek professional help from a counselor if needed.
Have the conversation sooner than later with your loved one about what they would like to plan for in the case of physical decline. The more control your loved one has in decisions related to accessing LTC supports or moving to a facility, the better.
If you have been in the role of unpaid caregiver, know that it is stressful, exhausting work. It’s OK to ask for help and let your loved one know what you can and cannot do.

Kelly Blackwell

Certified Senior Advisor (CSA)^®

As a health care professional since 1987, Kelly Blackwell has walked alongside and cared for seniors as they journey through the season of their fourth quarter of life. Blackwell holds a Bachelor of Science in nursing from the University of Northern Colorado, a Master of Science in health care administration from Grand Canyon University, an interprofessional graduate certificate in palliative care from the University of Colorado Anschutz Medical Campus and holds a Certified Senior Advisor^® credential from the Society of Certified Senior Advisors.

Blackwell contributes to the University of Colorado-Anschutz blog and has been published in “The Human Touch” distributed by the University of Colorado Center for Bioethics and Humanities. She cowrote “Dying Is” for Pathways Hospice.

A registered nurse, Blackwell understands health insurance choices influence quality of life and are driven by values, goals, and beliefs. She’s passionate about engaging with, educating, and empowering seniors as they navigate the health care system. She’s equipped to lend an experienced, compassionate voice to beneficiaries seeking information about Medicare Advantage Plans.

As a CSA^®, Blackwell has access to valuable resources for Medicare beneficiaries. Her work as a bedside nurse and clinical manager has given her the opportunity to see how Medicare rules, regulations, and benefits work when patients need them. With a passion to learn and to make a difference in the lives of seniors, Blackwell supports seniors through Medicare and fourth-quarter life decisions.