Report: $12B spent on assisted living Medicare, Medicaid

By Andrew Rice
The Center Square

Medicare and Medicaid funding accounted for almost $12 billion of services provided through assisted living facilities, according to a new report released by the Government Accountability Office.

The independent nonpartisan agency examined spending for services in assisted living facilities in 2024, the year with the most recently available data. The agency found $3.5 billion in federal Medicaid spending for services provided in assisted living facilities and $8.5 billion in traditional Medicare spending.

The agency said the figure was likely an undercount because the Department of Housing and Urban Development and Veterans Affairs programs are also used to support those in assisted living facilities with room and board costs.

As of March 2025, 44 state Medicaid programs covered assisted living services for older adults and people with disabilities. Medicare does not generally cover assisted living facility costs like room and board charges. However, the federal program is used to cover costs associated with specific care.

“These services could potentially allow beneficiaries with a need for skilled care to remain in the assisted living facility instead of moving to an institutional setting that provides a higher level of care, such as a nursing home,” GAO’s report reads. Medicare may also cover services such as in-home health evaluation visits that may be provided on-site in assisted living facilities.”

Federal Medicaid spending per patient averaged to be about $23,000, according to the report. About 21% of individuals receiving the benefits were 85 years old or older. More than 829,000 individuals were helped by the services provided through Medicare and Medicaid.

Spending on hospice services took up the largest amount of assistance provided through the federal government, at more than $6.1 billion. Most commonly, hospice services include personal care, clinical social worker services and skilled nursing services.

“This report provides Congress with data on Medicare and Medicaid spending on services provided in assisted living facilities as well as information on other federal programs that may fund services provided in those facilities,” Michelle Rosenberg, director of GAO’s health care team, said in a statement to The Center Square.

Rosenberg also said the report did not focus on uncovering fraudulent activity through state or federal Medicaid and Medicare payments. GAO analyzed claims data through the Center for Medicare and Medicaid Services’ Statistical Information System.

GAO also interviewed officials from several state Medicaid agencies who said the program’s scope was too limited. The officials called on Medicaid services to provide room and board aid for those in assisted living.

“The lack of funding for room and board under Medicaid leads to the perception of access to assisted living services through the Medicaid program on paper, but not in practice,” GAO wrote.

The officials also said some individuals are missing critical services because they do not have access to care.

“[Officials] said that unless a Medicare beneficiary is also eligible for Medicaid, there is little pathway for these beneficiaries to access assisted living services unless the beneficiary is able to pay privately or has long-term care insurance that covers assisted living services,” the GAO report reads.

Former Sen. Kirsten Gillibrand and Sens. Richard Blumenthal, D-Conn.; John Fetterman, D-Penn.; Mark Kelly, D-Ariz.; Raphael Warnock, D-Ga.; and Elizabeth Warren, D-Mass., requested the report from the Government Accountability Office.