Does Medicare pay for group homes for seniors? Understanding the Nuances

Oct 22, 2025 4 min read •

senior care Medicare Healthy Aging

According to the National Council on Aging, Original Medicare does not cover the costs of long-term care, including residence in most group homes. This means it's crucial for families to understand exactly what is and isn't covered when asking, "Does Medicare pay for group homes for seniors?"

Quick Summary

Medicare generally does not cover the room, board, and personal care services provided in most group homes for seniors, as these are considered 'custodial care.' While it will continue to cover medically necessary services like doctor visits and prescriptions, other funding sources are typically required for residential costs.

Key Points

Custodial Care Not Covered: Medicare explicitly excludes coverage for custodial care, which includes the daily living assistance provided in most group homes.
Medical Services Still Covered: While living in a group home, Medicare continues to cover medically necessary services like doctor visits, hospital stays, and prescription drugs.
Explore Alternative Funding: Families must rely on other payment sources such as private funds, Medicaid waivers, long-term care insurance, or VA benefits.
Medicaid Varies by State: Many states have HCBS waivers that can help with personal care costs in group homes, but eligibility and coverage differ significantly by location.
Planning is Essential: Because of Medicare's limitations, planning for long-term senior care finances well in advance is critical to ensuring access to the right services.

Understanding the Difference: Custodial vs. Skilled Care

To grasp why Medicare does not pay for group homes for seniors, it is essential to understand the distinction between custodial and skilled care. Group homes primarily offer custodial care, which involves assistance with activities of daily living (ADLs). These include tasks such as bathing, dressing, eating, and managing medications. This type of care is considered non-medical and is not covered by Original Medicare (Parts A and B).

In contrast, Medicare covers skilled care, which is provided by a certified medical professional, such as a nurse or therapist, and is medically necessary. A brief stay in a skilled nursing facility (SNF) following a qualifying hospital stay is an example of what Medicare might cover, but this is a short-term, rehabilitative benefit, not a long-term residential solution.

Medicare's Limited Role in Senior Living

While Medicare will not pay for the long-term living expenses within a group home, it still serves a vital function for residents. Any medically necessary services a senior would have received at home are still covered, including:

Doctor's visits and outpatient care (Part B): Medicare continues to cover your regular check-ups, diagnostic tests, and specialist appointments.
Prescription drugs (Part D): If enrolled in a Medicare prescription drug plan, it will still cover your medications, regardless of your living situation.
Hospital stays (Part A): In the event of a hospital admission, Part A will provide coverage as it normally would.
Short-term skilled nursing: Following a qualifying hospital stay, Medicare Part A may cover a short period of rehabilitation in a skilled nursing facility, even if that facility is part of a larger community.

This means that while the core cost of housing and personal assistance is not covered, the health insurance aspect of Medicare remains intact.

Exploring Alternative Payment Options

Given Medicare's limitations, families must consider other avenues for financing group home care. The financial landscape for senior care is complex, but several potential options exist:

Medicaid

Medicaid, a state-federal program for low-income individuals and families, is a primary funding source for long-term care. While it typically covers nursing home care for eligible seniors, many states also offer Home and Community-Based Services (HCBS) waivers. These waivers can help cover the cost of personal care services within an assisted living or group home setting. Eligibility rules and covered services vary significantly by state, so it's critical to research your specific state's program.

Long-Term Care Insurance

Private long-term care insurance policies are designed to cover the costs of services like assisted living and group home care. These policies must be purchased well in advance, and the premiums can be substantial. However, they can provide a crucial financial safety net for those who can afford them.

Veterans' Benefits

For qualifying veterans and their surviving spouses, the Department of Veterans Affairs (VA) offers the Aid and Attendance benefit. This pension program can provide additional monthly income to help pay for assisted living or group home care for those who meet specific service, income, and asset requirements.

Private Pay

Many families rely on private funds to cover the cost of group home living. This can come from personal savings, home equity (through a reverse mortgage or selling a home), or contributions from family members.

Comparison of Funding Options


Feature	Medicare	Medicaid (via Waivers)	Long-Term Care Insurance	VA Aid and Attendance	Private Pay
Covers Custodial Care?	No	Yes (services, not always room/board)	Yes (depending on policy)	Yes (if eligible)	Yes
Covers Room and Board?	No	No (usually)	No (sometimes)	Yes (if eligible)	Yes
Eligibility Based On...	Age/Disability	Income/Assets	Health/Premiums	Service/Income/Assets	Financial Resources
State Variation?	No	Yes	No	No	No
Best For...	Medical/Hospital	Low-Income	Planning Ahead	Veterans	Short-Term Needs

Finding Help and Resources

Navigating the complex world of senior care can be daunting. Fortunately, numerous resources are available to help families make informed decisions.

State Health Insurance Assistance Programs (SHIPs): These programs offer free, unbiased counseling to help seniors understand their Medicare benefits and coverage options.
Area Agencies on Aging (AAAs): A local AAA can provide information on community resources, financial assistance programs, and support services for older adults.
Eldercare Locators: This service can connect you to resources and services for older adults across the country.
Professional financial planners: A planner specializing in elder care can help structure assets and navigate the financial aspects of long-term care.

The Cost of Group Home Care

Group homes, also known as residential care facilities, can vary significantly in cost depending on location, level of care provided, and amenities. Costs typically include room, meals, and assistance with daily tasks. Since Medicare doesn't cover these expenses, understanding the financial commitment is a critical first step. Researching local facilities and comparing pricing structures will help create a realistic budget.

Conclusion: Planning is Paramount

In conclusion, the answer to does Medicare pay for group homes for seniors? is a definitive no for the residential component. Medicare’s role is limited to covering medically necessary services, not the room, board, and personal assistance that define group home living. Proactive planning is essential for ensuring a senior's long-term care needs are met without financial strain. By exploring options like Medicaid waivers, long-term care insurance, and veterans' benefits, and by seeking guidance from trusted resources, families can secure the right level of care for their loved ones.

For more information on senior care options and financial planning, consider visiting the National Council on Aging's resource hub.

Frequently Asked Questions

A group home provides custodial care, which is help with daily activities like dressing and bathing. A skilled nursing facility (SNF) provides skilled care from medical professionals for a temporary, rehabilitative period, typically after a hospital stay. Medicare may cover an SNF stay, but not long-term group home residency.

Generally, no. Medicare Advantage plans must cover everything Original Medicare does and will also not cover the custodial care associated with a group home. However, some Advantage plans may offer supplemental benefits like meal delivery or transportation, but they will not cover room and board costs.

Even when a senior lives in a group home, Medicare (Part B) will still cover medically necessary durable medical equipment (DME), such as wheelchairs or oxygen equipment, under the same terms and conditions as if they were living at home.

Yes, if a senior is diagnosed with a terminal illness and meets the eligibility requirements for hospice care, Medicare Part A will cover hospice services. This can include care provided within a group home, although it does not cover the room and board expenses.

You can contact your local Area Agency on Aging (AAA) or state Medicaid office. They can provide information on eligibility requirements, application processes, and the types of Home and Community-Based Services (HCBS) waivers available in your state.

No, Medigap policies are designed to cover the gaps in Original Medicare coverage, such as deductibles and coinsurance. Since Original Medicare doesn't cover custodial care or residential costs for group homes, a Medigap policy will not cover these expenses either.

Private pay refers to using personal finances, savings, or income to cover the cost of care. For many families, this is the primary method of paying for group home expenses. It's not your only option, but it is often a significant component, and exploring other resources like Medicaid waivers or long-term care insurance is crucial.

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.