Medicare is a federally funded health insurance plan for U.S. citizens and legal residents who are at least 65 years of age or older or who have a qualifying illness or disability, such as permanent kidney failure. Medicare is broken into separate parts with different types of coverage. There are four main parts: Medicare Part A, B, C and D.
- Medicare, Part A: Covers inpatient hospital care, skilled nursing facility care, nursing home care, hospice care and home health care.
- Medicare, Part B: Pays for medical necessities like outpatient care, occupational therapy, medical equipment and testing. It also covers some preventative services like physical exams and cancer screenings.
- Medicare, Part C: Also referred to as Medicare Advantage, Medicare, Part C helps pay for prescription medicines, vision and dental insurance and mental health services.
- Medicare, Part D: Part D provides access to an outside insurance company’s network of pharmacies in exchange for a monthly premium.
Most qualified individuals are automatically enrolled in Medicare, Part A and Part B, but some must manually enroll through the Social Security Administration. Individuals who have paid enough in Social Security and payroll tax may not have to pay the premium for Medicare, Part A; however, if you don’t have enough tax credits built up, you may have to pay out of pocket. Medicare Part B, C and D require premiums that depend on the level of coverage you select.
The Cost of Memory Care
Memory care typically costs 20% to 30% more than assisted living, depending on where the memory care facility is located, the number of amenities and the type of programming the facility offers. According to the 2019 Genworth Cost of Care Survey, the average cost of assisted living across the United States is $4,051 per month. To find out the average cost of memory care nationally, we added 25% to the cost of assisted living; Memory care in the U.S. costs about $5,064 per month.
Even though memory care is most often provided in an assisted living facility and includes the same personal care services and amenities, memory care costs are higher than assisted living because it requires specialized staff training, therapy and programming as well as specific facility design and security.
When Medicare Will or Won't Cover Memory Care
Medicare covers some, but not all, costs of care in a memory care facility. It doesn’t cover any type of long-term care, but it does cover the following:
- Inpatient hospital care
- Semi-private rooms
- General nursing care
- Hospital supplies
- Diagnostic testing
- 100 days of skilled nursing home care
- Hospice care
Special Needs Plans
Special Needs Plans (SNP) are a type of Medicare Advantage Plan that’s designed much like an insurance company’s PPO or HMO plan. SNPs are limited to individuals with special diseases or those with a disabling chronic condition.
There are three different types of SNPs:
- Chronic condition SNP (C-SNP): For those with diabetes mellitus
- Dual-eligible SNP (D-SNP): For those with both Medicare and Medicaid
- Institutional SNP (I-SNP): For individuals in long-term care
SNPs have all the same benefits of a traditional Medicare Advantage Plan, including a prescription drug plan, as well as services specific to an individual’s condition, for example, blood sugar monitoring for an individual with diabetes.
Other Options for Paying for Memory Care
There are multiple financial resources for those who need help paying for memory care:
- Insurance: While Medicare is the primary insurance for individuals 65 and older, a retiree may have private insurance through a group plan that covers care for Alzheimer’s disease and other memory impairments.
- Retirement benefits: Individual retirement benefits may provide a personal source of payment for dementia and other medical conditions. This includes both individual retirement accounts (IRAs) and annuities.
- Personal savings: Personal assets may be used to help pay for memory care, including savings accounts, investments and real property.
- Private organizations: Community organizations, such as a local Alzheimer’s association, may offer programs to help qualified individuals pay for memory care services. A local church or volunteer group may also offer financial assistance.