Does Medicare Advantage Cover Assisted Living?

Many individuals and families inquire whether Medicare Advantage plans cover assisted living. The financial considerations for long-term care are substantial, and the answer is not a simple yes or no. Medicare Advantage coverage for services in an assisted living setting involves nuances and specific criteria. This article clarifies these complexities, detailing what these plans offer and do not, along with other financial avenues for assisted living.

Understanding Medicare Advantage Coverage for Assisted Living

Medicare Advantage plans, also known as Medicare Part C, do not cover the non-medical costs associated with assisted living. This includes the expenses of room and board, as well as personal care services often referred to as custodial care. Custodial care involves providing assistance with daily living activities such as bathing, dressing, eating, and toileting, which can be performed by non-skilled caregivers. The reason for this limitation stems from Medicare’s primary focus on medically necessary services rather than long-term care for daily support.

Medicare Advantage plans are required to offer at least the same coverage as Original Medicare (Parts A and B), which primarily covers medical services. Within an assisted living facility, this means Medicare Advantage can cover medically necessary services such as doctor visits, skilled nursing care, and various therapies like physical, occupational, and speech therapy. It also includes durable medical equipment, laboratory tests, X-rays, and prescription drugs if the plan incorporates Part D coverage. These services must be deemed medically necessary and provided by Medicare-approved professionals, often within the plan’s network.

The distinction between skilled care and custodial care determines coverage. Skilled care requires licensed healthcare professionals for services like wound care or complex medication management. While Medicare Advantage may cover short-term skilled nursing facility stays for up to 100 days under specific conditions, it does not cover ongoing custodial care in an assisted living setting. Thus, while medical services may be covered, the facility’s overarching costs, including personal assistance, remain largely uncovered.

Navigating Plan Options and Provider Networks

Medicare Advantage plans are offered by private insurance companies and often involve specific provider networks. Verify that any healthcare providers associated with the assisted living facility, such as visiting doctors or therapists, are included within the chosen plan’s network to ensure coverage for medical services. Different plan types, such as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), have varying rules regarding network usage.

Some Medicare Advantage plans, particularly HMOs, may require referrals from a primary care provider before seeing specialists or obtaining certain services. Prior authorization might also be necessary for specific treatments, therapies, or medical equipment. These administrative steps must be followed to avoid unexpected costs.

Out-of-pocket costs, such as deductibles, copayments, and coinsurance, apply to covered medical services received within an assisted living setting, not to the facility’s room and board. For instance, in 2025, the maximum out-of-pocket limit for in-network services in Medicare Advantage plans can be up to $9,350, though individual plans may set lower limits. For prescription drugs, a cap of $2,000 on out-of-pocket costs for Part D covered prescriptions begins in 2025. Review the plan’s “Summary of Benefits” and “Evidence of Coverage” documents to understand specific cost-sharing obligations and limitations for medical services. When choosing a Medicare Advantage plan, consider the network, coverage for specific medical needs, and cost-sharing structures, especially when anticipating healthcare needs within an assisted living community.

Other Financial Resources for Assisted Living

Since Medicare Advantage does not cover the primary costs of assisted living, explore alternative financial resources. Personal savings and assets are a common method for funding assisted living expenses. This can include drawing from bank accounts, investments, or the proceeds from selling a home or other property. Utilizing personal funds offers flexibility in choosing communities and care plans, though it can lead to the depletion of resources over time.

Medicaid, a joint federal and state program, can offer assistance for long-term care costs, including assisted living, for individuals who meet specific income and asset eligibility requirements. Some states offer Home and Community-Based Services (HCBS) waivers that help cover services in an assisted living facility, allowing care outside of a nursing home. These waivers may cover personal care assistance, case management, and transportation for medical visits.

Long-term care insurance is a private policy designed to cover expenses like assisted living, home care, and nursing home care. Policyholders pay premiums, and benefits begin after an elimination period (often 30 to 90 days) once the individual meets criteria, such as needing assistance with daily living activities. Policies often pay up to a daily or monthly limit for care, up to a lifetime maximum.

Veterans and their surviving spouses may be eligible for the VA Aid & Attendance pension, a tax-free benefit that can help offset assisted living costs. Eligibility depends on service requirements, medical need (requiring assistance with daily activities), and financial limitations. This benefit is paid in addition to any basic VA pension and Social Security benefits.

Reverse mortgages allow homeowners aged 62 and older to convert a portion of their home equity into cash without selling the home or making monthly mortgage payments. Funds can be used for any purpose, including assisted living costs. The loan becomes due when the homeowner no longer lives in the home as their primary residence for a specified period, such as 12 consecutive months.

Life insurance policies may offer financial options, such as cashing out the policy for its surrender value or entering into a life settlement, where the policy is sold to a third party for more than its cash value but less than the death benefit. Some policies also allow for loans against the cash value. Short-term “bridge loans” are available to cover immediate assisted living costs while waiting for other funding sources, such as a home sale or approval of long-term care insurance or VA benefits. These loans are repaid within six to twelve months.