Medicare Doesn't Cover This Long-Term Care For Seniors

Healthcare in the United States is notorious for its high costs, with national healthcare expenditures reaching $4.9 trillion in 2023, or about $14,570 per person, according to the Centers for Medicare and Medicaid Services. Most Americans rely on insurance to ease this burden, and for seniors and people with disabilities, Medicare is the main option. A common misconception, however, is that it pays for all healthcare expenses, when in fact, one of the most expensive forms of care for seniors, assisted living, is not covered.

Assisted living is a residential community for seniors who may not require constant medical care but need assistance with everyday tasks, such as bathing, dressing, and managing medications. Unlike nursing homes or hospice care, assisted living is considered non-medical custodial care and not medically necessary, and so it's unfortunately one of the costs Medicare won't cover for seniors. 

Medicare plans are divided into four parts, A through D, each with a different scope of coverage. Original Medicare includes Parts A (hospital insurance) and Part B (medical insurance). Part A covers inpatient care, care in skilled nursing facilities, and hospice care, while Part B focuses on outpatient visits and medical services. While neither part covers assisted living, Part A slightly bridges the gap by providing full costs of the first 20 days of care in a skilled nursing facility, after a qualifying hospital stay. Provided by private insurers, Part C is known as Medicare Advantage and covers everything under original Medicare, and in the same way, does not cover assisted living. The scope of the final part, D, is relegated to prescription drug coverage and excludes any care costs.

Without insurance, the actual costs of assisted living can be a heavy burden for families. In 2024, Genworth's Cost of Care Survey reported an average monthly cost of $5,900, approximately $70,800 a year. Even in states like South Dakota, where the average cost sits more than a thousand dollars below the national median, shouldering the entire cost of the care option can run into hundreds of thousands of dollars over a long-term period.

Fortunately, there are a few options for managing the high costs of assisted living. One of them is long-term care insurance — targeted at patient care services like assisted living and in-home care. These policies typically pay over the specified benefit period to cover the cost of care services that include activities of daily living (ADLs). Like other types of insurance, the cost of premiums could trend higher depending on age, or even exclude coverage for pre-existing medical conditions. So it is recommended to purchase life and healthcare insurance early — typically in your 50s. 

Also, Medicare Advantage plans offered by private insurers may come with supplemental benefits. Most of these benefits are required to be primarily health-related, so they will not cover assisted living, but may include some care options like adult day care, bathroom safety devices, and meal delivery — but not housing. For low-income families, there's relief under Medicaid waiver programs, even with an existing Medicare plan. But the truth is, eligibility requirements are a bit extreme, and the scope of coverage varies by state. Individual applicants have to prove income of less than 300% of the Federal Benefit Rate (approximately $2,900 a month) and a functional need for the services covered by the program.