Does Medicare Pay for Dementia Care? Here's What to Expect

According to the Alzheimer's Association, Medicare pays nearly three times more annually for patients with Alzheimer's or other dementia than for those without. So, does Medicare pay for dementia care? The answer is a complex 'yes and no,' as coverage is extensive for medical services but excludes most long-term residential and personal care.

Quick Summary

Medicare covers many medical costs associated with dementia, such as doctor visits, cognitive assessments, and some medications, but it does not cover long-term custodial care like assisted living or full-time personal care aides.

Key Points

• Medicare covers medical care, not custodial care: Original Medicare (Parts A & B) pays for doctor visits, hospital stays, and skilled nursing, but not long-term personal care or assisted living.

• Limited home health care is covered: Medicare will pay for intermittent skilled nursing or therapy services at home, but only for homebound patients and not for 24/7 care or homemaking.

• Medicare Advantage plans may offer extra benefits: Some private Part C plans include extras like Special Needs Plans (SNPs), transportation, or meal delivery, which can aid dementia patients.

• Long-term facility care is not covered: The cost of long-term residence in a nursing home or memory care unit is not covered by Medicare and is typically the largest expense for many families.

• Medicaid can cover long-term care for low-income individuals: Unlike Medicare, Medicaid pays for long-term custodial care for eligible people who meet state income and asset limits.

• PACE programs and the GUIDE Model offer alternative support: The Program of All-Inclusive Care for the Elderly (PACE) provides comprehensive community-based care, while the GUIDE Model is a new pilot program for coordinated dementia care.

• Medicare Part D covers prescription drugs: Costs for medications used to manage dementia symptoms are covered under prescription drug plans (Part D).

Understanding the Fundamentals: Original Medicare vs. Custodial Care

Original Medicare, consisting of Part A (Hospital Insurance) and Part B (Medical Insurance), provides coverage for medically necessary services, but it specifically excludes custodial care. This distinction is critical for anyone managing a dementia diagnosis, as the needs for daily, non-medical assistance often increase as the disease progresses. While Medicare will cover a hospital stay for a related medical issue, it won't pay for long-term residency in a memory care or assisted living facility.

How Original Medicare Parts A and B Cover Medical Needs

Original Medicare provides a safety net for many health-related costs associated with dementia. However, its benefits are focused on medical intervention rather than ongoing daily assistance.

Medicare Part A (Hospital Insurance) covers:

• Inpatient hospital stays for a qualifying medical condition.
• Up to 100 days of skilled nursing facility (SNF) care following a qualifying hospital stay of at least three days. This covers skilled medical services, not long-term residency.
• Home health care from a Medicare-certified agency for individuals who are homebound and require intermittent skilled nursing or therapy.
• Hospice care for beneficiaries with a life expectancy of six months or less.

Medicare Part B (Medical Insurance) covers:

• Cognitive assessments during your Annual Wellness Visit or a separate evaluation with a provider.
• Care planning services to help beneficiaries and caregivers navigate treatment options and community resources after a diagnosis.
• Outpatient services, including doctor visits, lab tests, and durable medical equipment (DME), like walkers or hospital beds.
• Mental health services, including counseling.

The Major Coverage Gap: Custodial Care and Long-Term Residence

The biggest limitation of Medicare is its refusal to cover most long-term custodial care. This is the non-medical, personal care that many dementia patients eventually require.

Services NOT Covered by Original Medicare:

• 24/7 care at home
• Long-term residency in an assisted living facility or memory care unit
• Personal care aides for bathing, dressing, and eating, unless provided in conjunction with short-term skilled nursing
• Adult day care programs
• Homemaking services, such as cleaning or laundry

Exploring Alternative and Supplemental Options

For many families, Medicare alone is insufficient for covering the full spectrum of dementia care. Several alternative and supplemental options exist to help fill these gaps.

Medicare Advantage (Part C)

Also known as Part C, these plans are offered by private companies and must cover everything Original Medicare does. Many Advantage plans offer extra benefits that may be helpful for dementia patients, though coverage can vary significantly.

• Special Needs Plans (SNPs): These specialized Medicare Advantage plans are designed for individuals with certain chronic conditions, including dementia. They offer tailored benefits and care coordination.
• Added Benefits: Some Advantage plans include supplemental benefits like transportation to medical appointments, meal delivery, and expanded home health services.

The Program of All-Inclusive Care for the Elderly (PACE)

For eligible individuals, PACE is a joint Medicare and Medicaid program that provides comprehensive medical and social services to help seniors stay in their homes and communities. Most PACE participants are dual-eligible for both Medicare and Medicaid, and about half have dementia.

Medicaid

Medicaid is a joint federal and state program that provides health coverage to low-income individuals. Unlike Medicare, Medicaid does cover the costs of long-term custodial care in a nursing home for those who qualify financially. Many states also offer home and community-based services (HCBS) waivers that can provide coverage for in-home care or adult day services.

Medigap (Medicare Supplement Insurance)

Medigap policies, sold by private companies, help pay for out-of-pocket costs from Original Medicare, such as deductibles and coinsurance. While it doesn't cover services not covered by Original Medicare (like long-term custodial care), it can reduce the financial burden of covered medical services.

Comparison of Medicare Coverage Options for Dementia

Feature	Original Medicare (Parts A & B)	Medicare Advantage (Part C)	PACE Program	Medicaid (if eligible)
Diagnosis & Assessments	Covers cognitive assessments and diagnostic testing.	Covers, as it must include all Original Medicare benefits.	Covers comprehensive assessments as part of coordinated care.	Covers diagnostic services for eligible individuals.
Inpatient Hospital Care	Covers medically necessary hospital stays.	Covers at least the same as Part A, with potential network restrictions.	Covers as a member of the interdisciplinary team.	Covers inpatient hospital care for those who qualify.
Skilled Nursing Facility	Covers up to 100 days of skilled care following a hospital stay.	Covers at least the same as Part A, with potential plan-specific rules.	Covers as part of comprehensive care management.	Covers long-term nursing home care for those who meet income limits.
Home Health Care	Covers intermittent skilled care for homebound patients.	Covers at least the same, may offer more home care via SNPs.	Covers extensive home care services as an alternative to facility care.	Covers in-home care for qualified beneficiaries, often broader than Medicare.
Long-Term Custodial Care	Does NOT Cover.	Does NOT Cover (though some SNPs may include minor extras).	Covers as needed to keep a person in their home.	Covers for eligible individuals who meet financial qualifications.
Prescription Drugs	Does NOT Cover (requires separate Part D plan).	Often includes Part D coverage.	Covers all necessary medications.	Covers prescription drug costs for dual-eligible beneficiaries.

Future Outlook: The GUIDE Model

As of July 2024, the Centers for Medicare & Medicaid Services (CMS) launched the Guiding an Improved Dementia Experience (GUIDE) Model, an eight-year pilot program. This model aims to provide integrated, coordinated care for dementia patients and support for their unpaid caregivers through participating providers. The goal is to improve the quality of life for those with dementia and potentially delay or prevent nursing home placement.

Conclusion: Navigating Coverage for Dementia Care

Does Medicare pay for dementia care? Yes, but its coverage is limited primarily to the medical aspects of the disease. While Original Medicare, Advantage plans, and supplements can cover everything from diagnosis and skilled nursing to medications, they largely exclude the most significant cost for many families: long-term custodial care. A comprehensive financial and care plan for dementia must consider supplemental options like Medicaid, the PACE program, or long-term care insurance to address the gap left by Medicare.

Further Reading

For more information on dementia care resources, visit the official Alzheimer's Association website: www.alz.org.

Frequently Asked Questions

Will Medicare pay for a patient to live in a memory care facility?

No, Medicare does not cover the cost of long-term residence, including room and board, in a memory care facility or assisted living community. While it may cover medically necessary services received inside the facility, it will not pay for the residential or custodial care.

Does Medicare cover in-home care for a person with dementia?

Medicare provides limited coverage for home health care, but only for intermittent skilled services like nursing care or physical therapy, and only if the patient is certified as homebound by a doctor. It does not cover long-term, 24-hour home care or personal care aides for daily activities if that is the only care needed.

What is the difference between Medicare and Medicaid for dementia care?

Medicare primarily covers medical services, while Medicaid can cover long-term custodial care for individuals with low income and limited assets. Many dual-eligible individuals rely on Medicaid to cover the long-term facility or in-home personal care costs that Medicare excludes.

Are new Alzheimer's drugs like Leqembi covered by Medicare?

Yes, Medicare Part B covers FDA-approved anti-amyloid treatments like Leqembi for individuals with mild cognitive impairment or early-stage Alzheimer's, provided they meet specific criteria and are entered into a registry. The standard 20% Part B coinsurance applies.

What happens after the 100 days of skilled nursing care runs out?

Medicare's coverage for a skilled nursing facility (SNF) is limited to 100 days per benefit period. After day 100, the patient is responsible for all costs. Many families must then use private funds, Medicaid, or long-term care insurance to cover the expenses if continued care is needed.

Does Medicare cover adult day care for dementia patients?

No, Original Medicare does not cover adult day care services. However, some Medicare Advantage plans or state Medicaid waivers may offer coverage for adult day services.

Can people with early-onset dementia get Medicare before age 65?

Yes. Individuals diagnosed with early-onset dementia can qualify for Medicare before age 65 if they have been receiving Social Security Disability Insurance (SSDI) benefits for 24 months.