With healthcare costs on the rise, families seeking memory care options for a loved one are often concerned about cost. You may have wondered whether Medicare will pay for memory care, or if private health insurance provides coverage.
In this guide, we break down what memory care services Medicare covers, which expenses Medicare doesn’t pay for, and other financial options that can help manage the cost of memory care.
What Does Medicare Cover for Memory Care?
Medicare can help pay for specific memory care services and expenses that are related to dementia and Alzheimer’s care, such as:
- Cognitive assessments or Alzheimer’s testing and diagnosis
- Short-term skilled nursing care (i.e., stays shorter than 100 days at skilled nursing facilities)
- Specific prescription medications, covered under Medicare Part D.
Medicare coverage also extends to hospice care and in-home health care. This can include aide and homemaker services, physician and nursing services, nutritional counseling, medical supplies, grief counseling services, and more.
What Medicare Doesn’t Cover for Memory Care
Memory care costs that aren’t covered by Medicare include:
- Long-term custodial care (i.e., non-medical care)
- Assistance with activities of daily living (ADLs), such as bathing or dressing
- Room and board at memory care facilities
- Alternative therapies or medicines, such as acupuncture
Additional Medicare Options that May Help Pay for Care
Medicare is split into different categories called “Parts"including:
- Part A (Hospital Insurance)
- Part B (Medical Insurance)
- Part C (Medicare Advantage)
- Part D (which covers prescription drugs)
Medicare Advantage and Part D Medicare can both help pay for select expenses related to dementia care. For example, Part D covers a variety of antidepressant, anticonvulsant, and antipsychotic medications, which are commonly prescribed to help manage symptoms of Alzheimer’s disease.
You can potentially lower your out-of-pocket costs even further by enrolling in a Medigap plan, which provides coverage for services that aren’t included in Original Medicare (Parts A and B). For instance, Medigap coverage can help pay for a doctor’s visit, copayment, or hospital admission that isn’t covered by Original Medicare. It’s important to note that only people who already have Original Medicare are eligible for Medigap insurance.
Additionally, the Centers for Medicare and Medicaid Services (CMS) offers a resource called Guiding an Improved Dementia Experience—better known as the GUIDE program. This program aims to create a standardized care delivery model that helps people with dementia and their caregivers. It extends care coordination and management, as well as caregiver education and support.
The GUIDE program includes an annual allotment of funds for respite care services that people caring for loved ones with dementia can use to offset the cost of hiring a professional caregiver so they have time to tend to their own well-being.
Does Private Health Insurance Cover Memory Care Costs?
Most health insurance policies don’t cover long-term custodial care, which refers to non-medical support like personal care or companion care. However, most healthcare plans offer coverage for short-term rehabilitation and treatments that are deemed medically necessary, including doctor visits, lab tests, urgent or emergency care, medical gear, hospital visits, and, in some cases, ambulance rides.
Because of the huge amount of variation that exists between different healthcare plans, it’s critically important to read the fine print and check policy details carefully. If you have questions about your policy, how to enroll in a new plan, or how to find the best health insurance for your family’s needs, you may want to consider contacting a health insurance broker, who can provide you with free expert advice.
Long-Term Care Insurance Coverage for Memory Care
Long-term care (LTC) insurance coverage is a type of insurance designed to help pay for long-term care, such as admission to a nursing home or assisted living community. There are three kinds of LTC insurance:
- Traditional (standalone) LTC insurance, which is typically the most affordable option
- LTC insurance riders, which expand what your healthcare policy covers
- Linked-benefit LTC insurance, which offers the best of both worlds by merging the benefits of life insurance with traditional LTC insurance.
Depending on the specific plan you choose, LTC insurance typically covers multiple costs that are associated with memory care, including:
- All levels of care at an assisted living or skilled nursing facility
- Care coordination
- Respite care
- In-home or facility-based hospice care
Like other types of insurance plans, pricing depends on the details of your specific policy, such as how your benefits are capped, what sort of waiting periods apply (such as 30 vs. 90 days), and what types of exclusions your plan features. For example, LTC insurance plans typically exclude care provided outside the U.S., care provided at a VA facility, and care provided for self-inflicted injuries.
Medicaid, Veterans Benefits, and Other Ways to Pay for Memory Care
Medicaid and veterans benefits can help supplement your other coverage and lower your out-of-pocket costs. Medicaid helps pay for select memory care-related expenses, such as nursing home services; though, it’s important to note that eligibility varies by state.
Medicaid does not cover costs of room and board, but other types of insurance can, such as LTC insurance. Veterans benefits, which are managed by the Veterans Benefits Administration (VBA), can also provide financial support.
According to the U.S. Department of Veterans Affairs, covered services for veterans with dementia or Alzheimer’s disease “may include Home Based Primary Care, Homemaker and Home Health Aide, Respite Care, Adult Day Health Care, outpatient clinic, inpatient hospital, Nursing Home, Palliative Care, or Hospice Care.”
Planning Ahead: How to Prepare for Memory Care Costs
Memory care is a significant investment, which makes it important for families to plan ahead financially. Look into multiple options and compare prices. You’ll also want to check whether potential options are Medicaid-approved and what (if any) types of private healthcare insurance are accepted.
Once you’ve narrowed down a shortlist, make a plan to meet with caregivers or tour facilities. Most importantly, you’ll want to consult with experienced professionals, such as elder law attorneys, care coordinators, or memory care insurance advisors
FAQs About Medicare and Insurance for Memory Care
What type of insurance is best for memory care?
Long-term care (LTC) insurance can offer robust memory care coverage because it’s designed to help pay for long-term expenses like skilled nursing care, plus room and board. However, not all LTC insurance policies cover Alzheimer’s disease. In some cases, an existing Alzheimer’s diagnosis may result in denial of coverage. Check policy details carefully and explore additional types of insurance that can help pay for memory care, such as Medicaid benefits, traditional health insurance, or VA benefits for military veterans.
Does supplemental insurance reduce out-of-pocket costs for memory care?
Potentially, yes. You may be able to lower your out-of-pocket memory care costs by enrolling in supplemental insurance, which helps cover expenses that aren’t included in your main healthcare policy. Types of supplemental insurance include critical illness insurance, vision insurance, cancer insurance, and accident insurance.
Are memory care services tax deductible?
Potentially, depending on the situation. The Internal Revenue Service (IRS) generally permits taxpayers to claim deductions for expenses related to memory care, provided the deductions are greater than 7.5% of your Adjusted Gross Income (AGI). For detailed guidance on this topic, refer to the IRS website or talk to an experienced tax professional about how your filing requirements may be impacted.
What happens if I run out of savings while in memory care?
Memory care facilities can potentially discharge patients for non-payment. However, they’re required to follow state and federal regulations throughout the process. Typically, they’re required to provide at least 30 days of advance written notice prior to discharging the patient.
How do Medicare and Medicaid work together for dual-eligible seniors in memory care?
Some people simultaneously qualify for Medicare and Medicaid benefits, which is called being “dual-eligible.” Dual-eligible seniors can apply both sets of benefits toward covered memory care expenses. For example, Medicaid pays for up to 100% of a nursing home stay, but does not pay for room and board at a standalone memory care facility. Medicare can help pay for in-home healthcare, such as in-home dementia care or hospice care, along with dementia care planning, cognitive testing for Alzheimer’s, and certain prescription drugs.
Does disability insurance apply to memory care costs?
Yes. Social Security Disability Insurance, or SSDI benefits, may be able to help your family pay for expenses related to dementia or memory care. SSDI can be used to help pay for costs associated with assisted living. The average SSDI payment in 2025 is around $1,580 per month.
BrightStar Care Can Support Your Memory Care Needs
If you’re considering memory care for a loved one,BrightStar Care is here to help. With personalized care plans for dementia and Alzheimer’s needs, in-home care options, and compassionate nurses and caregivers, we can provide your loved one with the support they need.
Find a location near you, contact us online, or call (866) 918-3286 to learn more about how BrightStar Care can help your family.