“Assisted Living Facilities: Information on Federal Spending and Medicaid Coverage,” GAO-26-107884
Quote:
“Assisted living facilities provide a residential alternative to in-home care and nursing homes for people who need assistance with activities of daily living such as eating and bathing.
GAO’s analysis of program data showed that federal Medicaid and Medicare spending for services provided in assisted living facilities totaled at least $12 billion in 2024. This amount is likely an undercount because of data limitations. For example, assisted living facilities are not a uniformly defined provider type and thus not consistently identified in the data.
- Federal Medicaid spending. GAO identified at least $3.5 billion in federal Medicaid spending for services provided in assisted living facilities in 2024. State Medicaid programs may cover assisted living services—that is, assistance with activities of daily living and other supportive services provided in assisted living facilities—as well as other services such as physical therapy.
- Medicare spending. GAO identified $8.5 billion in traditional Medicare spending for services provided in assisted living facilities in 2024. Medicare generally does not cover assisted living services but may cover other health care services such as hospice in assisted living facilities.
Other federal programs, such as Department of Housing and Urban Development and Department of Veterans Affairs programs, may be used by beneficiaries to help cover the costs of certain services, such as room and board, in assisted living facilities. The amount of spending by these programs for such services is unknown.
Forty-four states’ Medicaid programs covered assisted living services for older adults and people with disabilities as of March 2025. More than half of states—29 of the 44—covered these services under Medicaid home- and community-based services waivers. These waivers give states the flexibility to target enrollment to specific populations and to limit the number of participants.”
LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:
Once upon a time, Medicaid paid only for nursing home care. People don’t want to go to nursing homes so that policy helped to keep Medicaid LTC costs down and it encouraged people to think about and plan for long-term care. But nowadays Medicaid pays for assisted living and home and community-based care. Those are care venues people prefer. So Medicaid LTC costs skyrocket as the program covers not only the nursing home care people would rather avoid but also the home-based care they prefer. Bottom line, the whole system is spiraling into decline due to government crowd out of the private LTC marketplace.