Alzheimer’s disease is the most common form of dementia, marked by progressive brain changes that lead to memory loss and cognitive decline. This condition presents significant, often long-term, healthcare needs for millions of older adults in the United States. Navigating the costs associated with Alzheimer’s care is highly complex, as the federal Medicare program has specific limitations on the types of services it will finance. Understanding what Medicare covers is the first step toward preparing for the financial realities of this progressive disease.
Understanding Medicare’s Coverage Distinction
Medicare’s coverage for Alzheimer’s hinges on a fundamental differentiation between “skilled care” and “custodial care.” Skilled care involves services that must be performed by or supervised by a licensed medical professional, such as a registered nurse or physical therapist. This type of care is typically short-term, medically necessary, and provided to help a patient recover from an acute medical event or injury.
Custodial care focuses on non-medical assistance with activities of daily living (ADLs), including bathing, dressing, eating, and using the bathroom. A person with progressive Alzheimer’s disease will eventually need extensive custodial care due to increasing cognitive and physical impairment. Medicare generally does not cover this long-term custodial care, which is the most significant and costly component of advanced Alzheimer’s management.
For example, skilled physical therapy after a fall may be covered by Medicare. However, the daily, ongoing assistance with getting dressed or being monitored for safety as the disease progresses is considered custodial care and is not covered by the program. This distinction explains why families often face high out-of-pocket costs.
How Parts A and B Cover Medical Needs
Original Medicare is divided into Part A (Hospital Insurance) and Part B (Medical Insurance), which cover medically necessary services related to diagnosis and treatment. Part A covers inpatient hospital stays, necessary therapies, and medications administered during those stays. It also provides coverage for a limited stay in a skilled nursing facility (SNF) for up to 100 days following a qualifying inpatient hospital stay. Part A also covers hospice care when a doctor certifies the patient has a life expectancy of six months or less.
Part B covers outpatient services relevant for early diagnosis and ongoing management, including physician visits, diagnostic tests (cognitive assessments, PET scans), and medically necessary outpatient therapies (physical, occupational, and speech). It also covers certain durable medical equipment (DME), such as wheelchairs. Significantly, Part B may cover some newer, infused Alzheimer’s treatments, such as monoclonal antibodies, provided they have traditional FDA approval and meet specific coverage criteria.
Prescription Drug Coverage Through Part D
Prescription drug coverage is handled through Medicare Part D, which is available via separate plans offered by private insurance companies. Part D plans cover most FDA-approved medications used to manage Alzheimer’s symptoms, such as cholinesterase inhibitors. Federal regulations require Part D plans to cover at least two cholinesterase inhibitors.
The formulary, or list of covered drugs, varies between plans, so beneficiaries must check if a specific medication is included. Beneficiaries may face plan-specific costs, including premiums, deductibles, and cost-sharing. Medications administered by a healthcare professional in an outpatient setting, such as certain newly approved intravenous treatments, are covered under Part B instead of Part D.
Options for Financing Long Term Care
Since Medicare does not cover long-term custodial care, families must explore alternative financing methods for advanced Alzheimer’s needs. The most common public program covering long-term custodial care is Medicaid, a joint federal and state program for low-income individuals. It has strict eligibility requirements based on income and asset limits.
Medicaid eligibility rules are complex and vary by state, often requiring applicants to “spend down” assets to qualify. Many states also offer Home and Community-Based Services (HCBS) waivers through Medicaid. These waivers provide long-term care services in the patient’s home or community setting, offering an option for individuals who need custodial support but wish to avoid institutionalization.
Private funding options include long-term care insurance, which can cover services like home care or assisted living, depending on the policy. Personal savings, investments, and retirement funds are frequently used to pay for care. Veterans may also be eligible for specific benefits, such as the Aid and Attendance pension, which provides financial assistance for care.