In last week’s blog post, we explained how a home care provider’s help with activities of daily living (ADLs) can allow older adults to stay in their homes and preserve independence longer. We also noted that in-home care is generally not covered by Medicare and must be paid for out of pocket by the care recipient or their family. This week I came across a real-life example that highlights how Medicare classifies certain conditions and related long-term care costs when deciding what it will and will not cover.
A real-world story about dementia and unpaid caregivers
A Huffington Post essay by an adult daughter chronicles her parents’ decline. Her father was diagnosed with Lewy body dementia about five years ago. For several years her mother served as his unpaid primary caregiver, until her own physical and mental health began to fail.
As her father lost the ability to handle basic personal care—bathing, dressing, toileting—the family explored hiring an in-home care provider. They were surprised to learn that Medicare would not cover the cost of assisted living-style services provided at home.
Ultimately, the family had to move the father into a memory care community so he could receive the level of daily care unpaid family members could no longer provide. Without long-term care insurance and with retirement savings shrinking, this middle-class family’s experience—struggling to meet the significant costs of assisted living and specialized memory care—is unfortunately common.
>> Related: Special Considerations Surround Unpaid Dementia Caregiving
What care services Medicare will and won’t pay for
Medicare typically categorizes care for people with dementia (including Alzheimer’s and related memory conditions) as custodial or companionship care—services it expects family members to provide. As one Medicare representative bluntly told the essay’s author: “We don’t consider dementia a medical issue.”
If dementia were considered a medical issue in a given case, Medicare might cover certain assisted living services. The author observes, “If my father had cancer or heart disease, he would probably live at home with some home care covered by Medicare.” That reflects how Medicare distinguishes between purely non-medical personal care and medically necessary skilled care.
In general, Medicare does not cover non-medical assisted living services if those services are the only care needed. However, Medicare Part A may cover a limited course of medically necessary skilled nursing care when specific conditions are met, including:
- An inpatient hospital stay of at least three days prior to the skilled care.
- Admission to the skilled nursing facility within 30 days of that hospital stay.
- A physician’s certification that daily skilled nursing or rehabilitation services are required.
- Care provided in a Medicare-certified facility, or medically necessary home health services provided by a Medicare-certified agency.
Typically, Medicare-covered skilled nursing follows a major medical event such as a stroke, heart attack, fall, or surgery. Though dementia is a medical condition affecting the brain, the daily support it requires is usually non-medical personal care, so it often does not qualify for Medicare coverage. For official details about what Medicare does and does not cover, consult Medicare.gov.
An important exception: Medicaid, the state-federal program for people with limited income and assets, may cover some assisted living costs for those who qualify.
>> Related: Long-Term Care: How Much Does Medicare Actually Cover?
The cost of assisted living
When paid caregiving becomes necessary, many families must cover costs out of pocket. How much does assisted living cost per month, and what about memory care? Costs vary widely depending on the level of care required and the location.
According to Genworth’s Cost of Care Survey, in 2023 the average hourly rate for homemaker-type in-home services was $27.58—roughly $5,259 per month for 44 hours of assistance each week. Because this support is primarily non-medical, Medicare generally does not pay for it.
If medical services are required, the in-home care cost rises; the average monthly cost for medically oriented in-home care was about $5,462 for 44 hours per week. That type of care might be covered in part or whole by Medicare if provided through a Medicare-certified agency and if the services meet Medicare’s medical necessity rules.
In communal settings, an assisted living community’s average cost for a private one-bedroom is around $4,774 per month—typically an out-of-pocket expense because the care is largely non-medical. Skilled nursing facilities cost more: a semi-private room averages $8,390 per month, and a private room averages $9,584. Some or all skilled nursing costs may be covered by Medicare when they are medically necessary.
Memory care often carries an even higher price tag than standard assisted living or nursing home care.
>> Related: What Will My Long-Term Care Cost?
The cost and average length of stay in memory care
Memory care is usually offered as a special care unit within an assisted living community or a skilled nursing facility. These units include safety features for residents with memory impairment, staff trained in dementia care, and specialized therapeutic programs tailored to residents’ needs.
Memory care can add an additional $1,000 to $4,000 per month on top of assisted living or skilled nursing fees, much of which is often paid out of pocket depending on the claimant’s medical situation. That can translate into nearly $100,000 a year in some cases, and costs can be higher in certain regions or facilities.
The length of stay in memory care varies widely—from a few months to several years—so cumulative costs can easily reach into the hundreds of thousands. Tools like life expectancy calculators for Alzheimer’s and dementia can help families estimate likely timelines, but individual experiences vary greatly.
>> Related: The Benefits of Customized Care in Special Care Units
Paying the price of dementia
The financial burden of caring for a loved one with dementia can be overwhelming. Many middle-class families face steep out-of-pocket expenses because Medicare often views dementia care as non-medical. This categorization leaves families responsible for daily personal care costs even when the underlying condition is clearly medical.
Numerous age-related medical issues create limitations that require regular assistance, yet Medicare’s distinction between medical and custodial care can leave gaps in coverage. For families watching a loved one lose abilities to speak, remember, or manage daily tasks, the lack of comprehensive coverage for memory care can be especially hard to accept.