How to pay for memory care: Medicare, Medicaid, VA and insurance

Most families pay for memory care with the parent's own money first: income, savings, investments and sometimes the house. Medicare doesn't pay for it. Long-term care insurance and VA Aid and Attendance can cover part of the bill for people who have them. Medicaid may pay later, in some states, once your parent's savings are nearly gone. Most families end up combining two or three of these. Here's how to pay for memory care, piece by piece, and who to call for each piece.

None of this is simple, and the rules change by state. You don't have to master it tonight. You need to know which doors exist and which mistakes are expensive.

What memory care costs, and what's in the bill

The Alzheimer's Association publishes national median costs from Genworth's Cost of Care Survey. Its 2025 figures put assisted living at $6,200 a month and a private nursing home room at $10,798 a month. It doesn't list a separate memory care figure. The Family Caregiver Alliance says memory care generally costs more than assisted living, so expect a monthly bill somewhere between those two numbers or above, depending on your state.

The base rate is rarely the whole bill. Ask every place for these in writing:

• The memory care rate, not the assisted living rate for the same building.
• Any one-time community or move-in fee.
• "Level of care" charges, and what makes them go up.
• Medication management fees.
• How much rates rose in each of the last few years.
• Whether she can stay if her money runs out, and whether they accept Medicaid.

If you're weighing that bill against round-the-clock help at home, our guide on when it's time for memory care lists the signs that home has stopped working.

How to pay for memory care: where the money comes from

Does Medicare pay for memory care?

No. Medicare.gov says Medicare doesn't pay for long-term care, and that you pay all costs. Long-term care means help with daily life, like bathing, dressing, eating and supervision. Medicare calls most of that non-medical, and that's most of what memory care provides.

What Medicare does cover is her medical care wherever she lives: doctor visits, hospital stays and, through a drug plan, prescriptions. The Family Caregiver Alliance notes that Medicare will pay for rehab in a skilled nursing facility for up to 100 days after a hospital stay, as long as she has skilled needs. That's a short stay to recover, not a long-term placement. Medicare supplement policies, also called Medigap, don't fill this gap either.

How much does Medicaid pay for memory care?

There's no single answer, because each state runs its own program. Medicaid covers nursing home care for people who qualify. For memory care and assisted living, the Family Caregiver Alliance explains that states with Medicaid home and community-based waivers, often called 1915(c) waivers, may cover the cost for people who qualify. Not every state's waiver covers memory care. Not every memory care community accepts Medicaid, so ask each one.

To qualify, your parent has to meet medical rules and money rules. The money limits are low. They vary by state, so get current figures from the state Medicaid office.

The look-back

This is where families get hurt. Medicaid.gov explains that people who need long-term care will be denied that coverage if they gave away assets, or sold them for less than they were worth, in the five years before applying. That's 60 months of bank statements.

The trouble is usually ordinary. A $15,000 gift to a grandchild for college. Your name added to the deed. Paying yourself from her account for years of help, with nothing in writing. Paying for her care, her debts or a prepaid funeral is different. That's spending her money on her.

If one parent is still at home

Medicaid has protections for the spouse who stays home, called spousal impoverishment rules. They let the at-home spouse keep part of the couple's savings and some income. If your dad is still living in the house while your mom moves to memory care, see an elder-law attorney before anyone applies.

After she dies

Medicaid.gov says state Medicaid programs must try to recover what they spent on nursing home and home and community-based care from the person's estate. That can include the house. The rules and the exceptions vary by state.

VA Aid and Attendance

Aid and Attendance is a monthly payment added to a VA pension. VA.gov says a person can qualify if they get a VA pension and need help with daily activities like bathing, feeding and dressing, or live in a nursing home because of lost mental or physical abilities. Surviving spouses of veterans can qualify too.

The pension itself has rules. VA.gov lists wartime service, a discharge that wasn't dishonorable, and being 65 or older or disabled, along with income and net worth limits. A few current numbers from VA.gov:

• The net worth limit is $163,699 from December 1, 2025, to November 30, 2026. The home and a vehicle generally don't count.
• For a veteran with no spouse or dependents who qualifies for Aid and Attendance, the maximum yearly pension is $29,093, or about $2,424 a month. The VA pays the difference between that limit and the person's countable income.
• Medical expenses that insurance doesn't pay may reduce the income the VA counts.
• The VA reviews assets transferred in the three years before the claim. Giving assets away to get under the limit can bring a penalty of up to five years.

These numbers change every December, so check VA.gov before you apply. Find the DD-214 discharge papers first. A county Veterans Service Officer can help you file. Be wary of anyone who offers to "reposition" assets for a fee.

Long-term care insurance and the house

If your parent bought a long-term care policy years ago, find it. Look through old files and bank statements for premium payments to an insurer. The Family Caregiver Alliance notes that long-term care insurance may cover memory care and assisted living, depending on the policy.

When you find it, ask the insurer what triggers benefits, how many days you pay before benefits start, what the monthly and lifetime maximums are, and whether it covers memory care or only nursing homes. Ask to be listed as the person notified if a premium is missed. People with dementia stop opening mail, and a lapsed policy is a disaster.

Take Nadia, whose dad paid premiums for 20 years and never mentioned it. She found the policy in a folder of old tax returns after paying his aide for a year. The claim took two months and several calls from his doctor's office. Then it covered most of his care.

The house is often the biggest asset. Renting it out can help cover the monthly bill while keeping it in the family for now. Selling it turns it into cash that pays for care, and that cash will count when Medicaid looks at her assets later. Either choice can change her Medicaid or VA eligibility. Talk to an elder-law attorney before you list it or sign a lease.

What to say when you call

These lines get you to the right answer faster.

• To the state Medicaid office: "My mom has dementia and may need memory care within two years. Does our state have a waiver that covers memory care, and is there a waiting list?"
• To a Veterans Service Officer: "My dad served during wartime and has dementia. I'd like to find out whether he qualifies for a pension with Aid and Attendance."
• To the long-term care insurer: "I'm her agent under a power of attorney. I'd like to start a claim. What forms do you need from her doctor?"
• To a sibling who calls it "our inheritance": "Mom saved this money for exactly this. I'm paying her bills from her account and keeping every receipt. You can see them anytime."

When to see an elder-law attorney

Sooner than feels necessary. Good times are right after the diagnosis, before moving or spending large amounts of her money, before signing a memory care contract, when Medicaid looks likely in the next few years, and when a spouse is still living at home. The Alzheimer's Association suggests the National Academy of Elder Law Attorneys to find one. Many offer a flat-fee first meeting, so ask.

Bring her power of attorney and health care proxy, her will, statements for every account going back as far as you can find, her monthly income, the deed, any insurance policies and the DD-214 if she or her spouse served. If you can't afford an attorney, your local Area Agency on Aging may know of free legal help for older adults.

When you sign the memory care contract, sign as her agent under the power of attorney, not as a personal guarantor. Have the attorney read it first. If your parent is still refusing a diagnosis or won't sign a power of attorney, start with our guide to a parent who refuses to see a doctor.