Adult day care services provide seniors and adults with disabilities support with daily activities, time to socialize and even medical supervision. But understanding who pays for this type of long-term care can be confusing, especially if an individual qualifies for Medicare.
Despite being a beneficial resource for caregivers and seniors alike, Medicare does not generally pay for adult day care, according to the official Medicare handbook. However, there are exceptions to the rule, plus certain programs across the country that can offer adult day care services to families with no out-of-pocket cost.
So who pays for adult day care? Here, the experts we spoke to will explain what type of care is covered by Medicare, what isn’t and where to find all the information you need.
Does Medicare cover adult day care costs?
The short answer is no, explains Scott Maibor, managing director of Senior Benefits Boston, a firm specializing in insurance options for seniors. “Medicare covers medical treatment only,” Maibor says. There is no coverage of custodial care, or nonmedical care, which is generally the type of care provided at an adult day program, he explains.
Where the confusion comes up for many families, however, is understanding the difference between medical — or skilled — care and custodial care, both of which can be offered by adult day centers.
Custodial care vs. skilled care
There are two types of long-term care, according to the Centers for Medicare & Medicaid Services (CMS): skilled care, which is medically necessary, and custodial care, which is not. Here is a look at the key differences, according to CMS:
- Skilled care refers to skilled nursing or rehabilitation services that are provided by licensed health professionals and are ordered by a doctor. Examples include physical therapy, wound care, intravenous injections and catheter care.
- Custodial care refers to services ordinarily provided by personnel like nurses’ aides, which can take place at home or in a facility. Examples include assistance with activities of daily living (ADLs), plus help with cooking and household chores.
“Medicare is designed to cover medical needs, such as doctor visits, hospital stays and skilled nursing care,” says Moti Gamburd, chief executive officer of CARE Homecare, an in-home senior care provider in Los Angeles. “Adult day care, on the other hand, is more focused on providing a safe, structured environment where seniors can socialize, stay active and receive supervision. Since it falls into the category of custodial care, it’s not included in traditional Medicare coverage.”
Is Medicaid coverage for adult day care different from Medicare?
Since eligibility is different for Medicare and Medicaid, each program covers long-term care differently, too. “If Medicaid is an option for your family, it’s worth exploring because it often covers adult day services for low-income seniors or those with disabilities,” Gamburd says.
According to CMS, state Medicaid programs have different rules that determine when skilled care is medically necessary and payable by Medicaid. Some custodial care may also be covered by Medicaid if care is provided in a nursing home setting and not at home, they note.
The best way to determine if Medicaid could cover your adult day care costs is to meet with a financial or legal professional long before care is needed, Maibor advises. They can help you determine if there are limited assets available to protect, making Medicaid a likely option for coverage, or if future needs could be met by Medicaid, he says.
Circumstances where Medicare could cover adult day care
While there are multiple types of Medicare coverage to choose from, none are required to cover adult day costs. But there are certain situations where Medicare could help with costs, primarily when medical care offerings come into play, according to experts.
“For instance, if the adult day center provides specific medical services like physical therapy or skilled nursing care, those parts may be covered under Medicare Part B,” Gamburd says. “It’s worth asking the center directly about this to see if it applies. These cases aren’t the norm, but they can make a difference for families needing a little extra support.”
Medicare may also cover adult day care services provided through the Program of All-Inclusive Care for the Elderly (PACE) because these centers combine medical and custodial care, according to Maibor. But there are specific eligibility requirements in order to participate, and PACE does not offer programs in every state.
What is PACE, and how much does it cost?
The National PACE Association is a nonprofit organization which offers a large menu of long-term senior care services that combine medical and nonmedical care support, including adult day care, explains Sarah Milanowski, manager of enrollment and marketing at LifeCircles PACE in Muskegon, Michigan. “PACE day centers are unique because they’re part of an integrated care model, rather than operating as standalone centers,” she says.
Each independent PACE program partners with CMS and state Medicaid programs, which is why their comprehensive services are often covered by Medicare, Milanowski explains. “Through a dual funding arrangement with Medicare and Medicaid, most program participants receive PACE services with no out-of-pocket costs,” she says.
Enrollment in a PACE program is voluntary, and you can find eligibility requirements on their website. Medicare or Medicaid coverage is not required, Milanowski notes, but enrollment includes all PACE services, not just adult day care. This means participants can pay out of pocket, but fees will be greater than what’s typical at standalone centers.
“Private pay costs vary by program, but generally, the cost is similar to the cost of privately paying for an assisted living facility,” Milanowski says. According to 2023 data collected by Genworth, a long-term care insurance company, the average cost for adult day care is $95 per day, while assisted living facilities cost $176 per day.
How to determine if Medicare may cover adult day care costs
Ultimately, the type of care your loved one requires will determine if it could be covered by Medicare. Custodial care offered at an adult day care center will not be covered; However, skilled care, like medical treatments, could be covered. The experts we spoke to advised reviewing your Medicare coverage plan to determine eligibility of specific services and reaching out for help if needed.
“Figuring out what [coverage] is available can feel overwhelming, but starting with your local Area Agency on Aging (AAA) is a good first step,” Gamburd says. “They can guide you through the maze of eligibility and point you toward programs you might not know about.”
If you are eligible and enrolled in both Medicare and Medicaid — a whopping 12 million people in the U.S. are, according to Medicaid data — PACE adult day care centers may offer you a no-cost option, so they are definitely worth exploring, Gamburd says. There are currently 180 PACE programs operating in 33 states, which you can browse here.
The bottom line
Since Medicare does not cover adult day care services, the cost is usually paid by an individual, a long-term care policy or by Medicaid, which utilizes a combination of state and federal funds, Maibor explains. If an adult day center offers both medical and nonmedical care, however, Medicare may cover certain costs. Experts recommend reviewing your insurance plan first, then reaching out to AAA to help determine what coverage options are available in your specific circumstance.
