Do Alzheimer Patients Have to Pay Care Home Fees? A Financial Guide

With the national median cost of memory care at $6,450 per month in 2025, many families wonder: do Alzheimer patients have to pay care home fees? This guide explores the financial responsibilities and assistance programs available.

Quick Summary

Generally, Alzheimer's patients or their families are responsible for care home fees. However, costs can be offset by private funds, long-term care insurance, and government programs like Medicaid and Veterans benefits.

Key Points

• Initial Responsibility: The patient and their family are primarily responsible for paying for care home fees, often using private savings and assets.

• High Costs: In 2025, the national median cost for memory care is about $6,450 per month, making long-term planning essential.

• Medicare Limitations: Medicare does not cover long-term custodial care, which is the primary type of care needed for Alzheimer's. It only covers short-term skilled nursing after a hospital stay.

• Medicaid's Role: Medicaid is the largest payer for long-term care but has strict financial eligibility rules. It can fully cover nursing home costs but typically only covers services (not room and board) in memory care facilities via waivers.

• VA Benefits: Veterans may be eligible for financial assistance through programs like Aid and Attendance, which can help offset care home costs.

• Insurance Options: Long-term care insurance can be a major source of funding, but it must be purchased before the onset of the disease.

Understanding the Costs of Alzheimer's Care

Caring for a loved one with Alzheimer's disease involves significant emotional and financial challenges. One of the most pressing concerns for families is navigating the expense of residential care. In 2025, the national median monthly cost for memory care is approximately $6,450, with prices ranging from $4,000 to over $11,000 depending on location and the level of care required. Unlike other medical conditions, the primary need in Alzheimer's care is often custodial—assisting with activities of daily living (ADLs) like bathing, dressing, and eating—which is not always covered by standard health insurance.

Initially, the financial responsibility for care home fees falls on the individual and their family. This is often covered through private pay, using personal savings, retirement funds, and other assets. However, as the disease progresses and costs mount, many families need to explore a combination of funding sources to ensure continuous, quality care.

Private Pay and Insurance Options

1. Personal Assets and Savings: The first line of funding is typically the patient's own resources. This includes savings accounts, pensions, Social Security benefits, stocks, and the sale of property like a home.

2. Long-Term Care Insurance (LTCI): For those who planned ahead, an LTCI policy can be a crucial asset. These policies are specifically designed to cover long-term care costs, including memory care. However, coverage varies significantly, so it's essential to review the policy's specific benefits, daily limits, and eligibility triggers.

3. Life Insurance Policies: Some life insurance policies have options that allow them to be used for long-term care. This can include selling the policy to a third party (a life settlement) or using an accelerated death benefit rider.

4. Reverse Mortgages: Homeowners aged 62 or older can convert home equity into cash through a reverse mortgage. This can provide a steady income stream to pay for care, but it may impact eligibility for needs-based programs like Medicaid.

Government Programs and Financial Assistance

When private funds are insufficient, several government programs can provide substantial financial relief. Eligibility for these programs is often complex and depends on strict income and asset limits.

Medicaid

Medicaid is a joint federal and state program that is the primary payer for long-term care services in the United States. For eligible individuals with limited income and assets, Medicaid can cover the full cost of a nursing home, including room, board, and medical care.

Key points about Medicaid:

• Nursing Homes: In all states, Medicaid pays for 100% of nursing home care for eligible residents, which includes memory care services provided in that setting.
• Assisted Living & Memory Care Facilities: Medicaid's role in these facilities is more complex. It generally does not pay for room and board. However, many states have Home and Community-Based Services (HCBS) waiver programs that can pay for the services provided in a memory care facility, such as personal care assistance and medication management. This defrays the overall cost, but families must still cover room and board.
• Eligibility: Financial eligibility rules are strict and include a “look-back” period (often five years) to prevent applicants from giving away assets to qualify. Medical eligibility requires demonstrating a need for a nursing home level of care.

Medicare

Medicare is a federal health insurance program for those 65 and older. It is not designed for long-term custodial care. Medicare's coverage for Alzheimer's is limited to short-term, medically necessary services.

Medicare may cover:

• Up to 100 days in a skilled nursing facility following a qualifying hospital stay, but not for long-term custodial care.
• Cognitive assessments and care planning services.
• Home health care on a limited, intermittent basis if skilled nursing care is required.
• Hospice care for individuals in the end stages of the disease.
• FDA-approved medications for Alzheimer's.

Veterans (VA) Benefits

Eligible veterans may receive assistance through the Department of Veterans Affairs. Key programs include:

• VA Health Care: The VA provides a range of care for enrolled veterans with dementia, which can include home care, respite care, and nursing home care in VA facilities or state veterans homes.
• Aid and Attendance: This is an increased monthly pension amount paid to veterans or their surviving spouses who require the assistance of another person for ADLs. These funds can be used to help pay for care in any setting, including a care home.

Funding Source	What It Typically Covers for Memory Care	Key Consideration
Private Pay	All costs, including room, board, and services.	Often the primary method until assets are depleted.
Long-Term Care Ins.	A significant portion of daily costs, up to policy limits.	Must be purchased before care is needed; policies vary greatly.
Medicare	Short-term skilled nursing (up to 100 days post-hospitalization), diagnostics, some home health.	Does not cover long-term custodial care or room and board.
Medicaid	Full cost in a nursing home; services (not room/board) in assisted living via waivers.	Strict income and asset limits apply; not all facilities accept it.
VA Benefits	Pension increases (Aid & Attendance) and direct care for eligible veterans.	Must meet service and disability/income requirements.

Conclusion: Planning is Crucial

Ultimately, while Alzheimer's patients are responsible for their care home fees, a patchwork of funding sources can help manage the significant expense. The journey often begins with private funds and insurance, transitioning to public benefits like Medicaid as resources are spent down. Due to the complexity of eligibility rules and the high cost of care, early financial and legal planning is essential. Consulting with an elder law attorney or a financial advisor specializing in long-term care can provide a clear path forward, ensuring your loved one receives the best possible care without creating an insurmountable financial burden for the family. For more information on navigating care options, you can explore resources like the Alzheimer's Association.

Frequently Asked Questions

Does Medicare pay for a nursing home for an Alzheimer's patient?

No, Medicare does not pay for long-term custodial care in a nursing home. It may cover up to 100 days of skilled nursing care following a qualifying hospital stay, but it does not cover the extended room, board, and personal care that most Alzheimer's patients require.

How can you qualify for Medicaid for dementia care?

To qualify for Medicaid, an individual must meet strict income and asset limits, which vary by state. There is also a medical requirement to show a need for a nursing home level of care. Because of the 'look-back' period, you cannot simply give away assets to qualify.

Is memory care more expensive than standard assisted living?

Yes, memory care is typically 20-30% more expensive than standard assisted living. This is due to the specialized training of staff, higher staff-to-resident ratios, and enhanced security features required to care for individuals with cognitive impairments.

What is the difference between Medicare and Medicaid?

Medicare is a federal health insurance program for people over 65, primarily covering medical services and short-term care. Medicaid is a joint federal and state needs-based program for individuals with low income and assets, and it is the primary payer for long-term care in the U.S.

Can selling a house affect Medicaid eligibility?

Yes. The proceeds from selling a house are counted as an asset, which could make an individual financially ineligible for Medicaid until those funds are spent down on care. However, the primary home is often an exempt asset while the patient or their spouse lives in it.

What are 'activities of daily living' (ADLs)?

Activities of daily living (ADLs) are fundamental self-care tasks. They typically include bathing, dressing, eating, toileting, continence, and transferring (moving from a bed to a chair). The inability to perform ADLs is often a trigger for long-term care insurance benefits and a requirement for Medicaid eligibility.

Are there any tax deductions for memory care costs?

Yes, medical expenses, which can include the costs of memory care, may be tax-deductible if they exceed a certain percentage of your adjusted gross income (AGI). It's best to consult with a tax professional to understand what specific costs qualify.