Medicare Assisted Living Coverage: Costs & Options

Medicare and assisted living are often mentioned together, but the rules are tricky.

This guide cuts through the confusion so you’ll know exactly what Medicare will and won’t pay for in assisted living, how to plan for costs, and where programs like Medicaid, long-term care insurance, and VA benefits can help.

Does Medicare cover assisted living?

Short answer: Original Medicare (Parts A and B) does not pay for room and board in assisted living facilities because that care is considered custodial (non-medical) rather than skilled medical care.

Medicare will cover medically necessary services you receive while living in assisted living—such as doctor visits, outpatient therapy, lab work, imaging, durable medical equipment, and short-term home health—when you meet eligibility rules and your providers accept Medicare. It will not cover help with bathing, dressing, meals, or supervision, and it won’t cover your monthly apartment fee.

If you’re recovering after a hospital stay, Medicare Part A may cover a limited stay in a skilled nursing facility (SNF) if you qualify. That is different from assisted living. Some Medicare Advantage (Part C) plans may offer supplemental benefits like transportation or limited in-home support, but they still do not pay the base assisted living rent.

Medicare vs. Medicaid: Eligibility and assets

People often ask, “how much money can you have in the bank to quality for medicare?” It’s a common misconception. Medicare eligibility is not based on income or assets; it’s primarily based on age (65+) or disability status, and your work history for premium-free Part A. You can have substantial savings and still enroll in Medicare.

By contrast, Medicaid—a joint federal-state program—can help pay for long-term services like assisted living through Home- and Community-Based Services (HCBS) waivers in many states, but it is means-tested. Financial limits vary by state and program, and rules are complex (including spousal protections and spend-down pathways). As a ballpark, many states use an asset limit around $2,000 for a single applicant, with income limits tied to a percentage of the SSI rate; your state may be higher or use special trusts to qualify. Always check your state Medicaid office or a local elder law attorney.

Key takeaway: Medicare covers medical care, not long-term custodial care. If the goal is help paying assisted living rent and personal care, research your state’s Medicaid HCBS waivers, Veterans Aid & Attendance, or long-term care insurance.

What are Medicare Parts A and B—and how do they affect coding?

You might see the question framed as, “what are medicare parts a and b and how do they affect coding?” For families, the big picture is simple: Part A covers inpatient hospital, SNF (when qualifying), hospice, and some home health; Part B covers outpatient services like doctor visits, preventive care, labs, imaging, DME, and therapy.

For clinicians and billing teams serving residents in assisted living, coding and billing mechanics matter. Assisted living facilities themselves are typically not Medicare-certified providers, so most services are billed under Part B by the rendering provider:

Place of Service (POS): Use POS 13 for services furnished in an assisted living facility.
CPT/HCPCS coding: Bill evaluation and management (E/M), therapy, labs, and DME using appropriate codes and medical necessity documentation. Apply relevant modifiers (e.g., therapy GN/GO/GP) when applicable.
Part A vs. Part B: If a resident transfers to a Medicare-covered SNF stay, Part A consolidated billing rules may apply for certain services; otherwise, in assisted living, Part B billing is standard for outside providers.
Non-covered custodial care: Room, board, and personal care are not Medicare benefits; they should not be billed to Medicare. Providers may use an ABN in some Part B scenarios where Medicare may deny coverage, but facilities cannot bill Medicare for assisted living rent.

Medicare Advantage HMOs and supplemental insurance

You might hear that “a medicare patient with an hmo does not need a supplemental insurance policy.” Here’s what that means: if you enroll in a Medicare Advantage (MA) HMO or PPO, you receive your Part A and B benefits through the plan and you generally cannot use a Medigap (supplement) policy with it. MA plans have an annual maximum out-of-pocket (MOOP) that limits your costs for Part A/B services within the plan’s network and rules—so a Medigap isn’t allowed or necessary for MA-covered services.

However, MA plans vary widely. Check networks, prior authorization rules, and extra benefits. If you have Original Medicare instead, a Medigap plan can help with deductibles and coinsurance, but again, it won’t pay assisted living rent because that’s not a Medicare-covered benefit.

Drug coverage: Using the Medicare Plan Finder

Prescription drugs are covered through Part D or many MA plans. When comparing plans, the Medicare Plan Finder is your best tool. You might ask, “the medicare plan finder drug list id feature allows users to do what?” It lets you save your medication list with a Drug List ID and Password Date so you (or a counselor) can retrieve it later, update it, and re-run comparisons without re-entering every drug.

Enter your ZIP, pick Part D or MA, and add your pharmacies and medications (names, dosages, frequencies).
Save the Drug List ID and Password Date; share them with a trusted helper or SHIP counselor.
Compare plans by total yearly cost (premiums + copays) and check each drug’s tier and prior authorization rules.

How families actually pay for assisted living

Because Medicare assisted living coverage doesn’t include room and board, families typically piece together funding sources:

Private pay: Savings, pensions, retirement withdrawals, or help from family.
Medicaid HCBS waivers: In states that offer them, waivers may help with personal care and services in assisted living; waitlists are common.
Long-term care insurance: Policies may pay a daily benefit when ADL or cognitive criteria are met; confirm elimination periods and facility eligibility.
VA Aid & Attendance: For eligible veterans and surviving spouses, this pension supplement can offset assisted living costs.
State and local programs: Some states offer non-Medicaid subsidies or grants for low-income seniors.
Creative options: Life insurance conversions, home equity (e.g., bridge loans while selling a home), or caregiver tax credits/deductions when criteria are met—consult a tax professional.

Example: Maria’s mom moves to assisted living after a fall. Medicare continues to cover her doctor visits and physical therapy under Part B, but not the facility’s monthly fee. Maria uses the Plan Finder (with a saved Drug List ID) to switch her mom to a lower-cost Part D plan, applies for the state’s Medicaid waiver waitlist, and taps a long-term care policy to help cover monthly expenses.

FAQs

Does Medicare cover assisted living?

Medicare pays for medical services, not room and board or personal care in assisted living. It may cover PT/OT/ST, labs, DME, and doctor visits you receive while living there, and Part A may cover a qualifying SNF stay—but that’s separate from assisted living.

What does Medicare Advantage change?

MA plans can bundle medical, drug, and some supplemental benefits, but they still won’t pay your assisted living rent. Always check networks, prior authorization, and the plan’s MOOP.

How do assets affect eligibility?

Your savings don’t affect Medicare eligibility. If you need help with assisted living costs, investigate Medicaid (state-specific income and asset rules), VA benefits, and long-term care insurance.

Any quick coding tips for providers in assisted living?

Bill most services under Part B with POS 13, document medical necessity, and use correct CPT/HCPCS and modifiers. Don’t bill Medicare for custodial care or room and board.

Bottom line

Medicare assisted living coverage is limited to medical services. To fund room and board, plan early: compare drug plans smartly, evaluate Medicare Advantage vs. Original Medicare + Medigap for your health needs, and research Medicaid waivers, VA benefits, and long-term care insurance to close the affordability gap.