Many seniors and their families search for ways to make long-term care more affordable. In some cases, Medicare and Medicaid can help by financing senior health services and some types of senior living. Though not everyone qualifies for these programs, many individuals do — potentially reducing their senior care costs. Whether Medicaid and Medicare will help with your family member’s senior living costs depends on several factors, such as their age, income, and required level of care. It also depends on communities themselves, as some accept Medicaid as a payment method, while others require private pay.
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As many as 6 million eligible Americans either don’t apply for or don’t use their benefits each year, according to the Centers for Medicare & Medicaid Services. Many factors contribute to this staggering number, notes Letha Sgritta McDowell, an elder law attorney who practices at Hook Law Center in Virginia and North Carolina.
“It’s really about comprehending the rules,” explains McDowell, who also serves as president of the National Academy of Elder Law Attorneys (NAELA). “Many people don’t understand the intricacies of how public benefits work.”
Medicaid is a state and federal program designed to provide health care coverage to vulnerable populations, or to people who might not otherwise have health insurance. It’s currently the largest source of health insurance in the U.S., providing coverage for people with low income or significant medical expenses.[01] For certain populations, Medicaid also covers long-term care provided in a nursing home or via home and community based services.
Since Medicaid is administered by individual states, the program’s coverage provided — as well as eligibility requirements — vary significantly based on where you live. Due to this complexity, it’s often best for seniors and their families to work with an elder law attorney, specifically one who focuses on Medicaid planning.
To qualify for Medicaid long-term care, an applicant must meet financial requirements (income and asset limits) and functional requirements (such as needing a nursing home level of care). Specific eligibility requirements for long-term care coverage vary by state and by program.[02]
If your family member is planning to apply for Medicaid, it’s a good idea to contact your state medical assistance office for more details. Depending on where you live, Medicaid programs may go by different names.
In many cases, older adults may have income above the Medicaid threshold yet still find themselves in need of public assistance due to high medical costs. Several states address this through a Medicaid “spenddown,” which allows seniors to reduce their countable income by subtracting allowable medical expenses. By lowering their countable income, these individuals may become eligible for Medicaid. This may also be referred to as the medically needy pathway to Medicaid eligibility.
For example, a single senior might receive $2,000 each month in income but live in a state that requires Medicaid recipients to have monthly income below $1,215. If their state has a Medicaid spenddown program, they could qualify for Medicaid by spending $785 each month on medical expenses, including prescription drugs, doctor copays, and long-term care costs. Spend down periods vary by state and may be anywhere from one month to six months in length. After a senior spends down to their state’s medically needy income limit, they’re eligible for Medicaid for the rest of the period (as long as they meet all other criteria). It’s important to track and document all medical expenses if you’re considering a Medicaid spenddown.
Medicare provides federal health insurance coverage to almost all Americans ages 65 and older and to younger people with certain disabilities or medical conditions. It has several separate components: [03]
While most people don’t pay a premium for Part A, Medicare’s other forms of coverage come with monthly costs for seniors.
Medicare recipients must meet one of the following requirements:[04]
Medicare open enrollment occurs annually between October 15 and December 7. This is when eligible seniors can make changes to their Medicare benefits.[05]
If seniors apply for Social Security retirement or disability benefits before they turn 65, they may be automatically enrolled in Medicare Parts A and B. Eligible adults who wait until they’re 65 or older to receive retirement benefits or enroll in Medicare must actively sign up for Medicare coverge.[06] Seniors who choose to enroll in Medicare Advantage plans will have to select a plan, complete paperwork, and pay monthly premiums. The Social Security website is a resource that can help seniors review requirements and start the Medicare application process.
According to A Place for Mom’s 2023 proprietary data, the national median cost of independent living is $3,000 per month.[07] While independent living is typically one of the least expensive senior living options, public pay options do not cover these costs.
Since Medicare covers only health care services, it doesn’t pay for independent living. Seniors in independent living are usually healthy and active. They choose this senior living option for benefits like housekeeping, lawn maintenance, and social activities.
Because independent living doesn’t include medical services or personal care services, Medicaid doesn’t cover this senior living setting.
According to A Place for Mom’s 2023 proprietary data, the national median cost of assisted living is $4,807 per month.[07] Assisted living provides care to seniors who are largely independent but could benefit from assistance with activities of daily living (ADLs), which is also referred to as custodial care. While Medicare doesn’t cover this type of care, Medicaid has more to offer.
No, Medicare doesn’t cover long-term care or custodial care, so it doesn’t pay for assisted living. However, Medicare will continue to cover a senior’s approved medical care.
Some — but not all — states have Medicaid state programs or Medicaid waiver programs that help cover the costs of home and community based services like assisted living. Medicaid is not accepted in every assisted living community, and it usually won’t cover the total price of room and board. However, medical expenses that occur in assisted living may be covered by Medicaid.
In some states, Medicaid can be used to pay for the following:
Our free tool provides options, advice, and next steps based on your unique situation.
According to A Place for Mom’s 2023 proprietary data, the national median cost for memory care is $5,995 per month.[07] This type of senior living caters to seniors who experience memory challenges due to Alzheimer’s disease or another form of dementia. Both Medicare and Medicaid cover some services outside of room and board.
Medicare won’t pay for rent, board, or personal care in memory care facilities. However, Medicare does cover many health care costs associated with dementia, such as cognitive testing, medical appointments, and necessary medications.
The cost of memory care room and board is not covered by Medicaid. However, as long as the memory care facility accepts Medicaid and is licensed as a Medicaid-approved memory care community, waivers may cover some services. Waivers and coverage amounts vary depending on where a senior receives memory care.
Seniors who receive dementia care services in an assisted living community can apply for coverage of home and community based services (HCBS). HCBS programs may be used to cover some of the assisted living care costs, reducing senior living expenses.
Seniors who receive dementia care services in a nursing home can receive full Medicaid coverage. As long as a senior needs both dementia care and skilled nursing care, Medicaid will cover services, room, and board.
The national median cost for nursing homes varies by room type. Families can expect to pay $7,908 per month for a semi-private room or $9,034 for a private room.[08] This type of long-term care is only covered by Medicaid.
“The number one misconception about Medicare is that it will pay for your long-term care,” says McDowell. Medicare will only pay for short-term stays in nursing care facilities, like a rehabilitative stay after hospitalization or an end-of-life hospice stay.
Seniors who need care in a skilled nursing facility due to an injury or period of acute illness can receive Medicare coverage for up to 100 days, but only after incurring a qualifying three-night hospital stay. In addition, the patient must require skilled care to prevent a decline in their condition.
A covered stay in a skilled nursing facility comes with the following costs: [09]
Medicare also covers hospice and palliative care in a senior’s home, including long-term care settings.[10]
Medicaid pays for long-term care in a nursing home if a senior meets the program’s eligibility criteria. Once approved, seniors must pay a monthly coinsurance amount based on their income. If a senior’s prospective nursing home accepts Medicaid, the program will then cover nearly all associated costs including a senior’s room, board, and health care services.
According to A Place for Mom’s 2023 proprietary data, the national median cost for nonmedical home care is $30 per hour.[07] This type of senior care mainly provides companionship and assistance with activities of daily living (ADLs). Home health care is a type of medical care provided in a senior’s home, which can include specialized therapies and skilled nursing care.
As long as a home care service is medically necessary, Medicare and Medicaid may provide some coverage.
Medicare doesn’t pay for long-term home care. Medicare only covers medically necessary part-time or intermittent home health care services for homebound seniors. Generally, this amounts to up to eight hours of care per day, with a maximum of 28 hours per week. A senior may be able to qualify for more frequent care for a short time if their doctor or other health care provider determines it’s necessary.[11]
Medicare primarily pays for treatments that help seniors recuperate from an injury or illness, such as: [11]
If they’re able, some families hire an in-home caregiver to give their loved one companionship or to reduce their household responsibilities, like chores and meal preparation.
Medicare doesn’t pay for these aspects of home care: [11]
Medicaid pays for home health care for qualifying seniors in all states. If a senior requires medically necessary home health care and meets the financial criteria, Medicaid will cover the costs of the following items and services: [12]
You can also check for Medicaid home and community based services programs to help pay for the following nonmedical home care services: [13]
Whether your family member currently has Medicaid coverage or thinks they may be eligible someday, public payment sources can significantly alter the senior living options that are available to them. Many communities don’t accept Medicaid, so it’s crucial to plan ahead and verify this information upfront.
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Determining how Medicaid and Medicare help cover senior living can be a challenge for most seniors and their families. One-size-fits-all advice may not apply to each family’s unique situation, especially low-income seniors.
“Doing your own research and then talking to an expert is so critical,” urges McDowell. “In the same way a financial advisor or accountant would talk to someone about how to reduce their taxes, that’s how an elder law attorney would help someone decide the best option for their long-term care.”
Browse the resources below for further assistance with long-term care and benefits planning:
Experts in your state or territory can help answer questions about specific Medicaid policies. Find your state Medicaid agency’s website below to contact them directly:
What is Medicaid?
American Hospital Association. (2023). Medicaid.
Medicaid.gov. Medicaid eligibility.
Medicare.gov. Parts of Medicare.
Medicare.gov. Get started with Medicare.
Centers for Medicare & Medicaid Services. (2023, September 6). Medicare open enrollment.
Medicare.gov. Get started with Medicare.
A Place for Mom. (2023). A Place for Mom proprietary data.
Genworth. (2021, November). Cost of care survey.
Medicare.gov. Skilled nursing facility (SNF) care.
Medicare.gov. Hospice care.
Medicare.gov. Home health services.
Congressional Research Office. (2022, September 15). Medicaid coverage of long-term services and supports.
Medicaid.gov. Home and community-based services 1915(c).
The information contained on this page is for informational purposes only and is not intended to constitute medical, legal or financial advice or create a professional relationship between A Place for Mom and the reader. Always seek the advice of your health care provider, attorney or financial advisor with respect to any particular matter, and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not endorse the contents of the third-party sites.
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