Medicare and Medicaid have different rules for assisted living, and most seniors find that neither covers the full cost
Medicare does not pay for assisted living. It covers hospital care, skilled nursing facilities (which are different), and some home health services, but not the room, board, or personal care that makes up assisted living. Medicaid may pay part of the cost in some states, but only if you meet strict income and asset limits, and only for certain types of facilities. Many seniors end up paying out of pocket, using long-term care insurance, or relying on family resources.
The confusion happens because assisted living sounds like a medical service. It is not. Assisted living is housing with help — staff who remind you to take medication, help you bathe, bring you meals, and manage the building. That is custodial care, not medical care. Medicare pays for medical care. Medicaid, which is jointly run by states and the federal government, has broader rules, but each state decides whether to cover assisted living and under what terms.
Key Takeaways
- Medicare does not cover assisted living facilities under any circumstance, even if you need help with daily activities.
- Medicaid may cover part of assisted living costs in some states, but you must have very low income and assets, usually under $2,000 to $3,000 depending on your state.
- If you need skilled nursing care (wound care, physical therapy, medication management by a nurse), Medicare covers a skilled nursing facility for up to 100 days after a hospital stay, which is different from assisted living.
- Most assisted living costs come from your own savings, Social Security, pensions, or long-term care insurance if you have it.
- Your state's Medicaid office can tell you whether your state covers assisted living and what the income and asset limits are.
Why Medicare does not cover assisted living
Medicare is federal health insurance for people 65 and older. It pays for medical treatment — doctors, hospitals, prescription drugs, some therapy. It does not pay for housing or personal care services like bathing, dressing, or meal preparation, even if you cannot do these things alone.
Assisted living is housing with support staff. The staff are not nurses. They do not provide medical care. They help you with activities of daily living — the things you do to take care of yourself. Medicare's rules are clear: it does not cover this. If you move to an assisted living facility, you pay the facility directly. Medicare will not reimburse you.
The one exception is if you need skilled nursing care — care that must be provided or supervised by a licensed nurse. If you leave the hospital after a stay of at least three days and your doctor says you need skilled care, Medicare covers a skilled nursing facility (SNF) for up to 100 days. This is not the same as assisted living. A skilled nursing facility has nurses on staff and provides medical care. An assisted living facility does not.
When Medicaid might cover assisted living
Medicaid is a joint federal and state program for people with low income and assets. Unlike Medicare, Medicaid can cover long-term care, including assisted living — but only in states that choose to offer it, and only if you meet that state's rules.
As of now, about 30 states have Medicaid programs that cover assisted living in some form. The other states do not. Even in states that do cover it, the rules are strict. You typically must have income below a certain amount (often around $2,500 per month, but this varies) and assets below a certain amount (often $2,000 to $3,000, but again, this varies by state). Your home and one vehicle usually do not count toward the asset limit, but savings, stocks, and other property do.
If you own a home, some states will let you keep it and still be covered by Medicaid. Others require you to sell it or put a lien on it so the state can recover costs after you die. This is called estate recovery, and the rules differ by state. Before you assume Medicaid will help, contact your state's Medicaid office and ask what assisted living coverage looks like where you live.
The difference between assisted living and skilled nursing facilities
These two are often confused because both are residential facilities for older adults who need help. The difference matters because Medicare covers one and not the other.
| Assisted Living Facility | Skilled Nursing Facility (SNF) |
|---|---|
| Help with bathing, dressing, meals, medication reminders | Medical care: wound care, physical therapy, IV medications, nursing supervision |
| Staff are not nurses | Licensed nurses on staff 24/7 |
| Medicare does not cover | Medicare covers up to 100 days after a hospital stay of 3+ days |
| You pay out of pocket or Medicaid (in some states) | Medicare pays; you pay copay after day 20 |
If your doctor says you need skilled nursing care after a hospital stay, ask whether the facility is Medicare-certified. If it is, Medicare will cover your stay. If you are moving to assisted living because you need help with daily tasks but not medical care, Medicare will not cover it.
What to do if you cannot afford assisted living
If you need help with daily living but cannot afford assisted living and do not may have access to for Medicaid, you have other options. Home care services — where someone comes to your home to help you — may be cheaper. Some home care is covered by Medicare if it is skilled care (like physical therapy after surgery), but personal care at home is usually not covered and you pay out of pocket.
Ask your doctor about a home health agency. Some are nonprofit and offer sliding-scale fees based on income. Your local Area Agency on Aging can tell you what services exist in your area and what they cost. You can find your local agency by calling the Eldercare Locator at 1-800-677-1116 or visiting eldercare.acl.gov.
If you have a pension or other income, some assisted living facilities offer payment plans or will work with you on cost. Call facilities directly and ask about financial information or reduced rates. Some are nonprofit and may have more flexibility than for-profit ones.
If you have a long-term care insurance policy, check what it covers. Some policies cover assisted living. Your insurance agent or the policy itself will say what is included.
How to find out what your state covers
Because Medicaid rules vary by state, you need to contact your state directly. Call your state's Medicaid office or visit its website. Search "[your state] Medicaid assisted living" to find the right office.
When you call, ask these questions:
- Does your state cover assisted living through Medicaid?
- What is the income limit and asset limit?
- Do you count the home and car as assets?
- What happens to your home if you receive Medicaid — can you keep it, or does the state put a lien on it?
- How long does it take to be approved?
- What facilities does your state cover — do they have to be licensed a certain way?
You can also contact your local Area Agency on Aging. They know the Medicaid rules in your state and can point you toward facilities that accept Medicaid if your state covers it. Find your local agency at eldercare.acl.gov or call 1-800-677-1116.
Questions to ask your doctor and your facility
Before you move to any facility, ask your doctor whether you need skilled nursing care or just help with daily living. If your doctor says you need skilled care, ask whether a skilled nursing facility would be appropriate and whether Medicare would cover it. Get this in writing.
When you tour an assisted living facility, ask whether it is licensed by your state and whether it accepts Medicaid (if your state covers it). Ask what is included in the monthly fee and what costs extra. Ask whether they will work with you on payment if your money runs out. Ask what happens if you run out of money — will they ask you to leave, or do they have a plan.
If you are considering a skilled nursing facility, ask whether it is Medicare-certified. If it is, Medicare will cover your stay. Ask what your out-of-pocket costs will be. After day 20, you pay a daily copay (the amount changes each year). After day 100, Medicare stops paying and you pay the full cost.
Frequently Asked Questions
Can I use my Medicare Advantage plan to pay for assisted living?
No. Medicare Advantage plans are still Medicare, and Medicare does not cover assisted living. Some Medicare Advantage plans offer supplemental benefits like transportation or meal delivery, but not the cost of living in an assisted living facility itself.
What if I need help at home instead of moving to a facility?
Medicare covers home health services if a doctor orders them and they are skilled care — physical therapy, wound care, nursing visits. Personal care like bathing and dressing at home is not covered by Medicare. Medicaid in some states covers personal care at home, so ask your state Medicaid office. Many seniors pay out of pocket for home care or use long-term care insurance.
If I spend down my savings to may have access to for Medicaid, can the state take my house?
It depends on your state. Many states will not take your primary home if you are still living in it or if a spouse or dependent child lives there. But some states place a lien on the home and recover costs after you die or move out permanently. Ask your state Medicaid office about estate recovery rules before you spend down your assets.
How much does assisted living cost if I pay out of pocket?
Costs vary widely by location and facility. In some areas, assisted living costs $3,000 to $5,000 per month. In others, it is higher. Call facilities in your area and ask for their current rates. Ask whether the rate includes all services or whether some things cost extra.
What if I was told I do not may have access to for Medicaid but I think I should?
You can ask your state Medicaid office to review your case. You can also contact your state's Long-Term Care Ombudsman, who advocates for people in long-term care facilities. Find your ombudsman at ltcombudsman.org. They can help you understand your options and appeal a denial if you believe it was wrong.