Around 69% of people over the age of 65 will need some form of long-term care, and around 37% will need it in some sort of facility, according to the U.S. Department of Health and Human Services. Memory care is a vital part of long-term care for those with dementia and Alzheimer’s disease, but calculating its costs can be tricky. Memory care differs from assisted living in that it offers:
- More assistance
- Additional security measures
- Specialized medical treatment
As a result, it tends to cost more than assisted living — between 20% and 30% more. To calculate the cost of memory care, we added 25% to the cost of assisted living as reported in the Genworth 2019 Cost of Care Survey. Here is the median monthly cost of memory care for the top 10 cities by population in the United States:
|City||Cost of Memory Care|
Typically, where the cost of living is high, such as in New York and San Jose, the cost of memory care rises substantially, and areas that have lower costs of living, such as Houston and Phoenix, tend to have lower median memory care costs. Another factor influencing cost is the state requirements for licensing memory care facilities, as this can increase or decrease the median depending on what the state mandates in terms of living space, personnel and supervision.
However, the average cost across each state usually varies much less. For the top 10 most populous states, the median monthly cost of memory care looks like this:
|State||Cost of Memory Care|
Of course, smaller states may not have as many options, which means that a number of pricier communities can spike the monthly median cost. The state with the highest monthly median cost of memory care is New Hampshire at $8,776 (the 10th smallest state). Rhode Island also has similarly high prices.
When it comes to individual Alzheimer’s care facilities in the same area, costs can vary substantially. Despite this, the cost of Alzheimer’s care is still a substantial expense for those who need this essential service.
Financial Assistance Options for Alzheimer's Care
Medicaid and Medicare can support some of the costs of Alzheimer’s care in an assisted living facility.
Anyone over the age of 65 qualifies for Medicare, which includes inpatient hospital care, some medical fees and some medical items. Medicare Part D covers a large number of prescription drugs. For those who need in-home care, Medicare can pay for up to 100 days, but it doesn’t pay for long-term nursing home care.
In addition, Medicare pays for an annual wellness visit.
Where many people paying for Alzheimer’s care can benefit is with a cognitive assessment and care plan service. Essentially, this is a resource that lets the recipient and their caregivers learn about various treatments, both medical and nonmedical, and other forms of support.
You can learn more about Medicare coverage on our Medicare page.
There are types of Medicare Advantage Plans that cater to those with dementia. These are called Special Needs Plans. This form of financial assistance typically applies to those who have a chronic condition (dementia, in this case), and it may require both Medicare (Part A and Part B) and Medicaid coverage or require nursing care, whether in a community or at home. These plans also typically cover a specific area, which means that seniors need to live in the plan’s service area.
These plans must cover everything that Original Medicare covers, and they usually offer extra services focused on dementia. In addition, there is often a fixed deductible, beyond which the plan fully covers all approved costs. However, these plans usually cost more than Original Medicare, although compared to the combined cost of Medicare premiums, a Medigap policy and a Part D prescription drug plan, they can be cost effective.
Those with a low income and few assets may qualify for Medicaid, depending on their financial circumstances and the state they live in. In many cases, Medicaid covers nursing care, medication management, case management, some assessments and medical exams. It does not usually pay for the base cost of assisted living in a memory care community.
You can learn more about Medicaid coverage on our Medicaid page.
Other Ways to Pay for Memory Care
Those who have Alzheimer’s can struggle to afford memory care, but there are multiple funding options available.
Social Security Disability Insurance: SSDI can be claimed by eligible individuals who need help paying for memory care. Those over age 65 will have to undergo a thorough review of the impairments that potentially qualify them for this form of assistance and how they affect the individual’s ability to work. In some cases, an Alzheimer’s diagnosis is a qualifying disability, but other issues can create a stronger case.
Long-term care insurance: Long-term care insurance is a form of insurance that pays for long-term care. This can be in a nursing home or a medical care facility, such as memory care. Policies have different benefits and forms of coverage, so seniors will need to check the details carefully to see exactly what is covered.
Reverse mortgages: Those with homes may wish to consider using a reverse mortgage to pay for the cost of memory care. These take the equity in the home and pay it out in chunks, typically in monthly payments. They do have drawbacks, however, in that the homeowner loses the equity in the home, and the amount paid out over the long term will be decreased by interest. There are also fees, such as service fees, closing costs and an origination fee, which decrease the overall amount that the homeowner gets compared to the home’s appraised value. Finally, the home is usually sold at the end of the loan to recover the costs, so it’s worth considering what would happen to anyone living in that house, such as a spouse.
Annuities: Most people have an annuity through a pension plan, but they can be purchased independently. This takes a lump sum and disburses it weekly or monthly. It acts as a regular form of income and lasts for the life of the policyholder. This can also be a good way to pay for the cost of Alzheimer’s care in an assisted living environment.
VA assistance: Veterans may qualify for assistance via the Department of Veterans Affairs. Spouses may also qualify. In most cases, VA health care covers medical care, and in mid-stage or late-stage dementia, it can cover some home care assistance, respite care and nursing home care costs. HISA grants may cover home modifications, regardless of whether the dementia is related to their service or not. Qualifying for these programs depends on a number of factors, so it’s worth contacting your local VA benefits office for further information.
Nonprofit assistance: There’s a huge range of nonprofits out there that provide assistance with Alzheimer’s care. Some focus on providing financial assistance, paying for care, accommodations or medical aids, and others connect seniors with low-cost or no-cost assistance in their local area.