Does Medicare Cover Long-Term Care for Dementia?
Understand Medicare's coverage for dementia care. Learn what medical services are covered and why long-term custodial care often requires other funding.
Dementia describes neurological conditions that progressively affect thinking, memory, and reasoning. Alzheimer’s disease is the most common form. Medicare, the federal health insurance program for individuals aged 65 or older and certain younger people with disabilities, covers many medical services for dementia. However, it generally does not cover long-term custodial care, a key distinction from medical treatment.
Medicare Coverage for Dementia-Related Medical Services
Medicare covers various medical services for diagnosing and managing dementia. Medicare Part A, Hospital Insurance, covers inpatient hospital stays for medically necessary care. It also covers short-term skilled nursing facility (SNF) care for rehabilitation or medical needs, limited to 100 days per benefit period and requiring a three-day qualifying hospital stay. Part A covers hospice care for individuals with dementia who have a life expectancy of six months or less, provided at home, in a nursing facility, or an inpatient hospice center.
Medicare Part B, Medical Insurance, covers outpatient services, including doctor visits with primary care physicians and neurologists for diagnosis and treatment. This includes cognitive assessments during annual wellness visits, diagnostic tests like brain imaging and laboratory tests, and mental health services. Part B covers medically necessary outpatient therapies, such as physical, occupational, and speech therapy. New FDA-approved monoclonal antibody treatments for early-stage Alzheimer’s disease are also covered for eligible individuals with documented amyloid plaques.
Medicare Part D provides prescription drug coverage for managing dementia symptoms. All Part D plans must cover at least two cholinesterase inhibitors, which are dementia medications. These plans also cover other medications prescribed for individuals with dementia, such as antidepressants and antipsychotics. Medicare Advantage Plans (Part C) combine Parts A and B, and often Part D, with additional benefits. These plans must cover at least what Original Medicare covers for dementia-related medical services.
Medicare’s Stance on Long-Term Custodial Care
Long-term custodial care, also known as personal care, involves assistance with daily living activities. This includes help with bathing, dressing, eating, using the restroom, moving around, and supervision for safety as dementia progresses. Medicare does not cover these services when they are the only care needed, whether provided in a nursing home, assisted living facility, or at home.
The distinction lies between “skilled care” and “custodial care.” Skilled care requires licensed medical professionals, like nurses or therapists, and is provided for a limited period to treat a medical condition or aid recovery. Medicare covers skilled care under specific conditions and time limits. Custodial care does not require medical training and focuses on personal assistance, which Medicare excludes from long-term coverage.
This exclusion stems from Medicare’s design as a health insurance program focused on acute medical needs, not ongoing personal assistance or long-term support services. While Medicare may cover a short, medically necessary stay in a skilled nursing facility, it will not cover nursing home or assisted living facility costs if the primary need is custodial care. After the 100-day limit for SNF care, or if only personal care is needed, individuals are responsible for the full cost.
Other Funding Sources for Long-Term Dementia Care
Given Medicare’s limitations on long-term custodial care, individuals and families explore alternative funding sources. Medicaid is a joint federal and state program that can cover long-term custodial care for those who meet income and asset limits. Eligibility criteria vary by state, and many individuals may need to “spend down” assets to qualify. Medicaid can cover nursing home costs, including room and board, and in many states, supports home and community-based services, allowing care in homes or assisted living facilities.
Private long-term care insurance policies cover services like home care, assisted living, and nursing home care, including custodial care. These policies offer financial reimbursement for a specified duration or up to a certain daily or monthly limit. Purchasing long-term care insurance requires foresight, as premiums can be substantial, and health status and age at application influence eligibility and cost.
Many individuals rely on personal funds, savings, and investments to pay for long-term dementia care out-of-pocket. This includes drawing from retirement accounts like 401(k)s and IRAs, using pensions, or liquidating assets such as real estate. While straightforward, this approach can quickly deplete financial resources due to the high cost of long-term care.
Veterans and their surviving spouses may be eligible for financial assistance through Department of Veterans Affairs (VA) programs. The Aid and Attendance (A&A) benefit provides additional monthly income to eligible individuals who require assistance with daily living. These benefits can be used to pay for in-home care, assisted living, memory care, or nursing home expenses.
Some state and local community programs offer limited assistance or resources for dementia care, such as adult day care or respite care. These programs provide valuable support, though they often do not cover the full scope of long-term care needs. Planning early and exploring all available options can help families navigate the complex financial landscape of dementia care.