How Much Does Medicare Pay for Memory Care Facilities?

Memory care facilities address a complex need for individuals experiencing cognitive decline. These specialized environments offer structured support and enhanced safety, but their substantial costs are a significant financial concern. Understanding how Medicare applies to these expenses is important, as there is a common misconception that it broadly covers all long-term care needs. This financial landscape is nuanced, requiring clarification of Medicare’s specific role in memory care settings.

Medicare Coverage for Memory Care

Original Medicare (Parts A and B) generally does not cover most costs associated with long-term custodial care, which forms the foundation of memory care facility expenses. This includes room and board, and assistance with daily living activities like bathing, dressing, and eating. Medicare is primarily health insurance for medical treatment and short-term skilled care, not long-term living expenses.

Medicare may contribute to certain medically necessary services received in a memory care setting. Medicare Part A can cover short-term skilled nursing facility (SNF) care under specific, limited circumstances. This coverage applies after a qualifying inpatient hospital stay of at least three consecutive days, and the individual must require daily skilled nursing or rehabilitation services. SNF coverage is limited to 100 days per benefit period, with full coverage for the first 20 days, followed by a daily coinsurance payment for days 21 through 100. Even in these situations, Medicare’s coverage is for the skilled medical care itself, not for the underlying costs of the memory care facility stay, such as room and board.

Medicare Part B covers outpatient medical services, including medically necessary doctor visits, diagnostic tests, and certain therapies for individuals with dementia, regardless of their living arrangement. These services are covered because they address a medical need, not because they are part of the broader custodial care provided by a memory care facility.

Medicare Advantage Plans (Part C) are offered by private companies approved by Medicare and must cover everything Original Medicare covers. While these plans may offer additional benefits, their memory care coverage remains consistent with Original Medicare’s limitations; they do not cover long-term custodial care or facility residency costs.

Types of Care Covered by Medicare

While Medicare does not cover the residential component of memory care, it covers specific medical services for individuals living in such facilities. Medicare Part A covers medically necessary inpatient hospital care, which may be needed if a resident experiences an acute medical event or complication. It also covers short-term skilled nursing facility (SNF) care when an individual needs daily skilled nursing or rehabilitation services after a qualifying hospital stay. This SNF coverage can last up to 100 days per benefit period, with a daily coinsurance payment typically applying from day 21.

Medicare Part B covers outpatient medical services often utilized by individuals in memory care. This includes doctor visits, such as with neurologists or geriatricians, for diagnosis, evaluation, and ongoing management of dementia. Part B also covers medically necessary outpatient therapies, including physical, occupational, and speech therapy, which can help maintain or improve functional abilities. Additionally, durable medical equipment (DME), such as wheelchairs or walkers prescribed by a doctor, is covered under Part B.

Medicare Part D provides coverage for prescription drugs, important for managing dementia symptoms and other co-occurring medical conditions. Residents can enroll in a Medicare Part D plan, which helps with medication costs. Beneficiaries or their representatives should choose a Part D plan that aligns with the facility’s preferred pharmacy network to potentially minimize out-of-pocket costs. These Medicare benefits address medical necessities, supporting the health of memory care residents without funding the residential aspect of their care.

Costs Not Covered by Medicare

Medicare explicitly excludes coverage for “custodial care,” which constitutes the bulk of expenses in a memory care facility. Custodial care refers to non-medical assistance with activities of daily living (ADLs), such as bathing, dressing, eating, using the restroom, and transferring. These services, provided by non-medical personnel, are considered personal care rather than skilled medical care.

Beyond ADL assistance, Medicare does not cover the cost of room and board within a memory care community. This includes monthly fees for living space, meals, utilities, and general supervision for safety. Personal care services, such as medication reminders, safety supervision, and social activities, are also not covered by Medicare. These are all components of long-term care or residential living, falling outside Medicare’s scope as a health insurance program.

The national median cost of memory care in the U.S. ranges from approximately $6,450 to $7,596 per month in 2025. These costs often include room, meals, 24-hour care, and specialized cognitive therapies. The difference between these costs and Medicare’s limited medical coverage highlights the financial gap families must address.

Alternative Funding Options

Given Medicare’s limited coverage for memory care, families often explore various alternative funding options. Medicaid is a primary public program providing financial assistance for long-term care, including memory care, for eligible low-income individuals. Eligibility is needs-based and involves strict income and asset limits, which vary by state. Most states in 2025 typically have an individual asset limit around $2,000.

Long-term care insurance policies are designed to cover custodial care services in memory care facilities. These policies can cover expenses like room and board, personal care, and skilled nursing care, once the policyholder meets triggers such as needing assistance with a certain number of ADLs. It is important to obtain these policies before a diagnosis of cognitive impairment, as insurers typically decline applications once symptoms appear.

Personal savings and assets represent another common payment method. Families may utilize retirement funds, investments, or proceeds from property sales to finance memory care expenses. Veterans benefits, particularly the Aid and Attendance (A&A) pension, offer financial relief for eligible veterans and their surviving spouses. This benefit helps cover long-term care costs, including memory care, for those requiring ADL assistance.

Reverse mortgages allow homeowners aged 62 or older to convert a portion of their home equity into cash for long-term care. The loan is repaid when the last borrower sells the home, permanently moves out, or passes away. Family contributions also frequently help cover memory care costs. These diverse options underscore the necessity of comprehensive financial planning when addressing the complex and often high costs of memory care.