While some newly available treatments show initial promise, the fact remains that Alzheimer’s disease and other dementias are impacting millions of older adults and their caregivers and often require specialized long-term care. ¹ Medicare may help pay for some services provided in memory care facilities. Here’s what older adults and caregivers need to know about Medicare coverage and memory care.

Understanding Medicare and memory care

What is Medicare?

All Americans age 65 and older, and some younger people who live with a qualifying disability or health condition, are eligible for Medicare. This federally funded health insurance program covers a wide range of services from inpatient hospital care to outpatient doctor’s visits and more.

Medicare is not the same as Medicaid. Medicaid is a public health insurance program, administered by individual states, that reduces barriers to care for low-income people of all ages.

What is memory care?

Memory care describes a type of residential long-term care specifically tailored to people with Alzheimer’s and other forms of dementia.

In addition to housing, meals, housekeeping, and personal assistance, most memory care facilities provide services designed to keep residents safe and support their quality of life, including:

• Staff specifically trained to care for people with dementia
• Round-the-clock security
• Door alarms and locked exits
• Secured and supervised outdoor areas
• Medication management
• Therapeutic activities
• Physical exercise and social engagement

Memory care differs from assisted living, although the two may be located on the same grounds or even in the same building. These “continuing care communities” are designed to provide a smooth transition from one into the other, which can ease a significant source of stress for cognitively impaired older adults, their caregivers, and their families when the need arises for a higher level of support.

There are other options for memory care, too: skilled nursing facilities (nursing homes); standalone memory care centers; and adult “day out” or day services programs all provide support for people living with dementia. It’s also possible to receive some memory care services within an older adult’s own home.

Unlike assisted or independent living—which anyone can freely choose—memory care comes with a caveat: someone first must have an official Alzheimer’s or dementia diagnosis  to be eligible.

Does Medicare cover memory care expenses?

If someone with dementia is age 65 or over and enrolled in Medicare, some—but not all—of the costs associated with their memory care may be eligible for payment. Which services will Medicare cover? Let’s take a look.

Original Medicare: limited coverage for memory care

As with other forms of long-term care, memory care typically is not considered medically necessary.^2,3 That means that health insurance, including Medicare, won’t pay for rent or other living costs incurred while staying in a memory care facility. On the other hand, Medicare Part A and Medicare Part B (together known as original Medicare) may cover some services that a person with Alzheimer’s or dementia might need.

Coverage under Part A (hospital / inpatient insurance) includes:

• Up to 100 days in a skilled nursing facility following a recent qualified hospital admission. You may have heard that Medicare also covers nursing home care, and that’s true—to a very narrow degree. The care must be medically necessary and not custodial in nature.⁴ (Custodial is personal care helping with daily activities like eating, dressing, and using the bathroom). Most people in memory care fall into the latter category and therefore will not qualify.
• Home health care for those who are homebound due to their condition. Similar to Medicare’s nursing home coverage, home health care is limited. Services cannot include help with activities of daily living (dressing, bathing, using the bathroom) or housekeeping.
• Hospice care for people whose life expectancy is six months or less. It’s critical to understand that in order to qualify for hospice under Medicare, the patient must sign a statement indicating they are freely choosing this option. In most cases, people living with Alzheimer’s or dementia will be unable to do this. Having advance directives and a health care proxy in place may help; be sure to consult with a qualified professional for advice.

Coverage under Part B (medical / outpatient insurance) includes:

• Cognitive testing that may help diagnose dementia. In addition to any cognitive evaluations performed during an annual Medicare “wellness visit,” Part B also pays for a separate visit with a specialist who will look for signs of impairment.
• Care planning services for people who recently have been diagnosed with dementia. These services help older adults, family members, and caregivers learn about treatment options and additional available support.
• Outpatient prescription drugs for Alzheimer’s and dementias. There are two important things to keep in mind: first, Medicare requires prescribing physicians to enter their patients’ information into a federal registry as a condition of coverage.⁵ Second, patients still will be responsible for a 20% copay after meeting their Medicare Part B deductible.

Medicare Advantage and memory care costs

Medicare Advantage plans, also called Medicare Part C plans, are private health plans that contract with Medicare to offer Part A and Part B coverage. There are many different Medicare Advantage plans on the market, and not every option is created equal. Some offer additional coverage for dental, eye, and hearing care as well as prescription drug (Part D) benefits.

Medicare Advantage plans provide the same standard coverage as original Medicare, including limited coverage for memory care.

Medicare Supplement (Medigap) and memory care costs

Medigap is optional additional coverage purchased through private insurers. As its name implies, this kind of plan helps bridge the gap between what Medicare Parts A and B will pay for, and what those services actually cost in out-of-pocket expenses—including deductibles, copays, and coinsurance.

Like original Medicare, Medigap does not cover most long-term memory care costs, including nursing. However, this type of insurance can help pay for the services that Part A and Part B provide.

Memory care costs and payment options

How much does memory care cost?

It depends on geographical region and the type of facility providing memory care. The average cost of memory care reached $6,160 per month in the United States as of February 2023.⁶ According to Genworth’s interactive Cost of Care Survey, these fees can range from $3,650 in Las Vegas, Nevada, to $6,819 in Boston, Massachusetts.⁷

It’s expensive no matter what. And because Medicare does not pay for memory care facilities, it’s important to research, consider, and plan for other ways to cover it. These include personal savings and other financial assets, long-term care insurance, and options for military veterans.

Alternative ways to pay for memory care

Can you get financial assistance for memory care? There are certain other ways to help cover the costs, including:

• Medicaid. Good news: Medicaid will cover some memory care costs. However, because individual states administer their own Medicaid plans, coverage rules can be complex to navigate. Contact your state Medicaid agency for helpful advice.
• Veterans benefits. Additional resources are available for veterans seeking memory care. The VA Health System provides broad-based coverage for eligible veterans with Alzheimer’s and other forms of dementia. This may include long-term inpatient and outpatient custodial care, adult day health services, caregiver support, and more.
• Long-term care insurance. Some providers will reimburse the costs of memory care, but understanding coverage details is absolutely key. Waiting periods are common. Be sure to research individual policies and their coverage limitations in advance.
• Reverse mortgages. Reverse mortgages convert home equity into cash that can be used to pay for long-term care, with caveats. Care must be provided in the home, for instance, and there are penalties if the homeowner needs to move into a facility for a year or more.
• Private assets. Many people requiring memory care use personal savings, Social Security income, pension payments, retirement accounts, and other private funds (such as a loan from a relative) to cover the expense.

How to enroll in a Medicare plan

Although memory care coverage is limited, Medicare provides other vital health care coverage. Get started by visiting BenefitsCheckUp.org, NCOA’s free online tool for browsing and understanding financial assistance programs that may be available.

The bottom line

Medicare enrollees with an official diagnosis for Alzheimer’s or other dementia may be eligible for limited memory care coverage. Although average costs vary by region, long-term memory care is expensive in the United States. Therefore, it’s important to understand what services Medicare does and does not pay for and consider other ways to manage the expense. A qualified elder care attorney or financial professional can help.

Frequently asked questions

How does Medicaid differ from Medicare in covering memory care?

Medicare will pay for some costs associated with memory care, but coverage is limited.

Medicaid generally pays 100% of the costs of a nursing home stay, including any memory care services provided within the scope of that care. It does not cover the cost of room and board in assisted living or dedicated memory care facilities. However, Medicaid may pay for some memory care services provided in these settings for eligible patients if the facility is Medicaid-approved.

What memory care facilities accept Medicare?

Remember: Medicare does not cover the costs of room and board at memory care centers. It also will not pay for long-term personal care—which generally is what people with Alzheimer’s and other dementia require. This includes assistance with the activities of daily living (ADLs) and housekeeping, for example.

That said, someone who is already staying in a memory care facility who is age 65 or over and enrolled in Medicare is entitled to the same benefits as anyone else. Learn more about Medicare coverage.

Sources

1. Alzheimer’s Association. Alzheimer’s Disease Facts and Figures. Found on the internet at https://www.alz.org/alzheimers-dementia/facts-figures

2. Medicare.gov. Long-term care. Found on the internet at https://www.medicare.gov/coverage/long-term-care

3. Administration for Community Living. What is Covered by Health & Disability Insurance? Found on the internet at https://acl.gov/ltc/costs-and-who-pays/what-is-covered

4. Medicare.gov. What Medicare covers. Found on the internet at https://www.medicare.gov/what-medicare-covers/what-part-a-covers/medicare-part-a-coverage-nursing-home-care

5. Centers for Medicare & Medicaid Services. Statement: Broader Medicare Coverage of Leqembi Available Following FDA Traditional Approval. Found on the internet at https://www.cms.gov/newsroom/press-releases/statement-broader-medicare-coverage-leqembi-available-following-fda-traditional-approval

6. Dementia Care Central. Alzheimer’s / Dementia Care Costs: Home Care, Adult Day Care, Assisted Living & Nursing Homes. February 9, 2023. Found on the internet at https://www.dementiacarecentral.com/assisted-living-home-care-costs/#assisted-living

7. Genworth. Cost of Care Survey. Found on the internet at https://www.genworth.com/aging-and-you/finances/cost-of-care.html