The True Cost of Assisted Living in 2025 and How Families Are Paying For It

The demand for assisted living increases alongside the aging population. Older adults who have difficulty performing activities of daily living (ADLs), like bathing, dressing, and grooming, benefit from assisted living services, especially those that offer personal care. However, assisted living communities may pose a financial challenge, especially with their average cost of $6,077 per month, as per the Genworth Financial Care Scout Survey in 2025. 

The cost of assisted living in the U.S. varies widely across the country and is influenced by several factors. Understanding the cost breakdown may help older adults and families create a long-term plan that best matches their budgets. Additionally, there are several ways in which older adults and families can pay assisted living costs and offset expenses.

State Variations

Depending on the state, assisted living may be cheaper or more expensive, compared to the national median of $6,077 per month. With costs ranging from $4,481 as the least expensive, to $11,650 for the most expensive. There are several factors that influence assisted living rates, including the cost of living, availability, demand, and geographical location. 

Location as a cost factor

Location is one of the key considerations in choosing an assisted living community. Since it affects the quality of life, environment, and expenses in retirement. Additionally, the cost of living, demand, and availability of services in the prospective location also affects assisted living costs. Since, most low-cost states, or those with a low cost of living, offer a relatively lower rate for assisted living. While high-cost states, or states with a relatively higher cost of living and that are highly urbanized, also provide more expensive assisted living options.

  • South Dakota, a state with a relatively low cost of living, offers an average of $4,481 per month, the lowest cost among the states. Additionally, Mississippi and Lousiana are also among the states with the least expensive assisted living costs. 
  • Among the most expensive assisted living costs are Hawaii with an average of $11,650 per month and Alaska with an average of $10,504 per month. These two states have significant higher costs due to the combination of high cost of living and unique geographical location. California is also one of the most expensive states, in terms of assisted living costs at $7,571 per month. 

There are also variations in assisted living costs within states, as more urbanized locations tend to have higher costs. For instance, Maryland has a relatively higher assisted living costs compared to the national average with $7,2975 per month. However, some cities, like Cumberland, have lower costs with an estimated of $5,969 per month. 

Cost Breakdown

Through a breakdown of services covered by monthly fees, older adults and families can have a better grasp of what they are paying for. Monthly base fees typically includes:

  • Housing
    • Private or shared living spaces; with private spaces having higher costs. 
  • Meals
    • Usually includes three meals a day, with a variety of dining options that can accommodate special diets. 
  • Utilities
    • Services, including electricity, water, and gas. 
  • Housekeeping
    • Light housekeeping of the chosen accommodation and regular maintenance; depending on the community, this can be daily or weekly. 
  • Activities
    • Social events, fitness classes, and occasional trips. 

Aside from the monthly base fee, older adults and families are also expected to pay the following, depending on their needs and preferences:

  • Level of Care
    • The higher the level of care needed, the higher the rates are. Some communities utilize tiered pricing models to ensure older adults pay only for what is needed. 
  • Amenities and Add- Ons
    • Luxury communities provide a variety of amenities and services that can hike up expenses, like the spa, gourmet dining, and specialized therapies. 
  • Move-in Fees
    • Some communities require a one-time fee for reservation, usually ranging from $1,000 to $5,000. 

Assisted living costs can also be understood better with pricing models, providing older adults and families with an overview of what is included with their fees. 

A la Carte Pricing

In this pricing model, the community offers a monthly fee for rent and occasionally, for meals. However, other services, including assistance with daily living activities (ADLs), like bathing and feeding, and medication management, are charged with additional fees. 

All-inclusive Pricing

The monthly fee covers the rent and other services, like ADL support, medication management, and other community amenities. 

How do Families Pay for Assisted Living?

With a better understanding of assisted living costs, older adults and families can plan accordingly on how to fund expenses. For most families, paying for assisted living consists of a combination of personal savings, retirement funds, insurance, and government aids. 

Private Pay

One of the most common way to cover assisted living expenses is through personal money, however, this can run out easily, especially without proper planning. 

Retirement Funds

Pensions, Social Security income, and retirement accounts also help supplement assisted living costs. 

Real Estate Strategies

Some families, especially those with parents living alone, sell their parents’ home to downsize and fund assisted living. If selling is not an option, other families may rent out their properties to generate passive and consistent income. 

Insurance Options

  • Long-Term Care Insurance
    • Depending on the policy, long-term care insurance supplement assisted living costs. 
  • Life insurance, including living benefits and life settlements can help cover assisted living costs. 

Government Programs

  • Medicare does not cover room and board, and basic assisted living services. However, they can pay for short-term skilled nursing and other medical services. 
  • Medicaid, especially medicaid waivers, can cover medication management and ADL support. 
  • Veterans Benefits also provides eligible veterans and surviving spouses with financial aid of up to $2,100 per month through the Aid and Attendance benefit program. 

Transitioning to assisted living requires rigorous planning to avoid depleting financial resources without sacrificing quality. Older adults and families are suggested to research possible communities and compare choices to ensure a comfortable retirement. With varying rates across states, it is better to ensure which retirement destination suits your needs and preferences. Additionally, it is better to get to know available resources and financial aid, and apply early to optimize them. 

Optional State Supplementation (OSS)

Optional State Supplementation (OSS), also referred to as State Supplementary Payments (SSP), in coordination with the federal Supplemental Security Income (SSI), provides financial assistance for low-income older adults, blind, and disabled individuals in the United States. 

Services and Benefits

OSS/ SSP services are usually direct cash payments that aim to cover basic living expenses. 

  • Increased Cash Assistance
    • A higher monthly income than Federal SSI, allowing eligible individuals to afford housing, food, utilities, and clothing. 
  • Support for Specific Living Arrangement
    • Most OSS programs cover residential care in assisted living, adult family care homes, residential care communities, and mental health residential treatment communities. 
  • Reduced Burden on Individuals/ Families
    • OSS provides additional financial support, helping beneficiaries with their financial burdens. 
  • Alternative to Institutional Care
    • OSS helps older adults from nursing homes, especially those with a lower level of care needed. 

Although OSS is not a Medicaid program, some states allow recipients to be eligible for Medicaid. 

Eligibility

  • Characteristics
    • Applicants must be 65+, blind, or disabled, as per the federal guidelines. 
  • Low Income
    • Most states follow the federal SSI income limit of 125% of the federal Poverty Guidelines for SSI. 
    • Although some states may have higher income limits for those who are not eligible for federal SSI.
  • Asset Limit
    • Individual applicants have a $2,000 asset limit, while couples have $3,000. 
  • Residency
    • Applicants must be residents of the state they are applying for OSS. 
  • Living Arrangement
    • Those living in a residential care home, including assisted living and adult foster care, may receive higher benefits compared to those living independently at home, depending on the state. 
  • Functional Need
    • Those needing additional support for activities of daily living (ADLs) and those who require assistance for physical or mental conditions are subject to assessment. 
  • Application Process
    • For states administered by SSA, application to federal SSI is also an application for OSS. While in state-administered programs, residents should apply to the state’s social services or human resources department. 

Senior Community Service Employment Program SCSEP

The Senior Community Service Employment Program (SCSEP) is a program created to help those 55+ who are low-income and unemployed, to help them gain work experience, hone skills, and transition into unsubsidized employment. 

Services

  • Subsidized Part-Time Community Service Assignments
    • Eligible participants are tasked with part-time training assignments with an average of 20 hours per week at a local non-profit organization or public institutions, including schools, hospitals, day-care centers, and senior centers. This serves as the heart of the program. 
  • Skill Enhancement and Training
    • Participants are provided with training that includes:
      • Basic academic skills, such as reading, writing, and computation. 
      • Computer skills
      • English as a Second Language (ESL)
      • “Soft skills” include communication and team building. 
      • Resume building and interview preparation
      • Specialized vocational training
  • Individual Employment Plan (IEP) Development
    • A personalized care plan is created to highlight the participants’ career goals, possible challenges, and further steps until unsubsidized employment. 
  • Job Search and Placement Assistance
    • The program helps participants connect with local employers. 
    • Referrals to American Job Centers and workshops on job search strategies. 
  • Paid Training
    • During their community service assignment, participants receive a stipend or training wages. 
  • Supportive Services
    • To cope with barriers, the program also provides:
      • Transportation assistance
      • Work attire assistance
      • Health check-up referrals. 
  • Ongoing Support
    • Participants receive assistance throughout the process, from initial assessment to job placement and maintaining it. 

Eligibility

  • Age – Participants should be 55+. However, priority is given to those 65+. 
  • Must be unemployed at the time of application. 
  • Has a family income limit that does not exceed 125% of the Federal Poverty Guidelines, per the U.S. Department of Health and Human Services. 
  • Must be a resident of the SCSEP’s service area. 
  • Be legally able to work with a completed I-9 form. 

Priority

Individuals with the following qualities are prioritized for enrollment:

  • Veterans and qualified spouses. 
  • Those 65+ above
  • Those with a disability, but can still function. 
  • Those with low literacy skills. 
  • Those coming from rural areas. 
  • The homeless or those at risk of homelessness. 
  • Those who have failed to find employment, even with the One-Stop delivery system. 
  • Individuals who are previously incarcerated, or under supervision from release in prison within five years. 

Program of All-Inclusive Care for the Elderly (PACE)

The Program of All-Inclusive Care for the Elderly (PACE) is coordinated by an interdisciplinary team of healthcare professionals, aiming to provide a wide range of services.

Services

  • Adult Day Health Care
    • Provides centralized medical care, rehabilitation, social activities, and meals. Transportation to and from the PACE center is typically included.
  • Home Care
    • Assistance with daily activities and personal care at home.
  • Hospital Care
    • PACE covers hospital stays and helps with care during and after hospitalization, whenever necessary.
  • Nursing Home Care
    • If health declines to the point where nursing home care is necessary, PACE covers and coordinates nursing services, ensuring continuity of care.
  • Primary Care
    • Usually includes regular doctor and nursing services, check-ups, and ongoing health monitoring.
  • Other Medically Necessary Services
    • PACE covers any other services deemed necessary by the team to improve and maintain overall health and allow a safe living. 

Eligibility

  • Applicants must be 55+.
  • Must be within the service area of the PACE organization.
  • A nursing home level of care is required. 
  • Applicants should not be enrolled in a separate Medicare Advantage Plan, Medicare Prepayment Plan, the Medicare Hospice Benefit, or Medicare prescription drug plan. 

Financial Eligibility

  • Medicaid Eligible
    • Eligible Medicaid beneficiaries do not have to pay for the long-term care portion of the PACE benefit. 
  • Medicare Only
    • For Medicare beneficiaries without Medicaid, payment for a monthly premium is required for long-term care and Medicare Part D. Co-payments and deductibles are not feasible. 

Medicare Savings Program

Medicare Savings Programs (MSPs), also known as Medicare Buy-In Programs or Medicare Premium Payment Programs, fundamentally act as a bridge between Medicare and Medicaid. 

Types of MSPs

  1. Qualified Medicare Beneficiary (QMB) Program
  • Has the most coverage, including:
    • Medicare Part A premiums (if you don’t qualify for premium-free Part A)
    • Medicare Part B premiums
    • Medicare Part A and Part B deductibles
    • Medicare Part A and Part B coinsurance and copayments
  • Providers are prohibited from billing QMB beneficiaries for Medicare Part A or B deductibles or co-insurance, similar to a Medicare Supplement (Medigap) policy. 
  1. Specified Low-Income Medicare Beneficiary (SLMB) Program
  • Pays for Medicare Part B premiums. 
  1. Qualifying Individual (QI) Program
  • Pays for Medicare Part B premiums. 
  • Priority is often given to those who received the benefit from the previous year. Additionally, those who are eligible for full Medicaid benefits cannot qualify for QI. 
  1. Qualified Disabled Working Individual (QDWI) Program
  • Covers Medicare Part A premiums only. 
  • Specifically for those with disability under age 65 who are not eligible for Medicaid. 

Eligibility

  • Medicare Part A
    • Must be eligible for Medicare Part A. 
  • Limited Income and Assets
    • Income and asset limits vary by program and by state. 

Income and Asset Limits (Federal Guidelines 2025)

While states have the freedom to disregard certain income or assets, the general guidelines are based on a percentage of the Federal Poverty Level (FPL) and updated yearly. 

ProgramIndividual Monthly Income LimitMarried Couple Monthly Income LimitIndividual Asset LimitMarried Couple Asset Limit
QMB$1,325 (100% FPL)$1,783 (100% FPL)$9,660$14,470
SLMB$1,585 (120% FPL)$2,135 (120% FPL)$9,660$14,470
QI$1,781 (135% FPL)$2,400 (135% FPL)$9,660$14,470
QDWI$5,302 (400% FPL)$7,135 (400% FPL)$4,000$6,000
  • Income Disregards
    • MSPs include a $20 general income disregard, wherein the first $20 of monthly income is not counted. 
  • Excluded Assets
    • Assets, including the following, are not counted
      • Primary home
      • One car
      • Household goods and personal effects
      • Burial plots
      • Up to $1,500 per person in burial funds
      • Life insurance with a cash value of less than $1,500
  • State Flexibility
    • Some states may have higher income or asset limits than the federal guidelines. Moreover, states like California, Alabama, Arizona, Connecticut, Delaware, Louisiana, Mississippi, New Mexico, New York, Oregon, Vermont, and the District of Columbia have removed the asset limit for MSPs.  

Low-Income Subsidy-LIS

  • Beneficiaries of QMB, SLMB, or QI programs automatically qualify for Medicare’s Extra Help (Low-Income Subsidy – LIS) program, lessening the burdens of prescription drug costs under Medicare Part D, including:
    • Monthly Part D plan premiums
    • Annual Part D deductibles
    • Part D copayments and coinsurance

Respite Care Programs

Respite care programs are services that provide temporary relief to primary or family caregivers, typically of older adults or those with a chronic illness or disability. 

Types of Respite Care

  • In-Home Respite Care
    • A professional caregiver delivers care at home, allowing the recipient to age in place. 
  • Adult Day Centers
    • Supervised programs in a community provide social activities, meals, and therapeutic services during the day. 
  • Residential/Facility-Based Respite
    • For longer rest or higher levels of care, short-term stays are usually offered in an assisted living community or nursing home. 
  • Community-Based Respite
    • Usually provided by churches, community centers, or non-profit organizations. 
  • Medical Respite Care for the Homeless
    • Dedicated to those who are too frail to recover from illness or injury on the streets but do not require hospitalization, providing safe shelter, clinical care, and aftercare planning. 

Depending on the state, funding for respite care is usually influenced by its type, duration, location, and level of care. Moreover, different agencies for respite care may provide funding, including:

  • Medicaid Home and Community-Based Services (HCBS) Waivers
    • Most states offer HCBS waivers that include respite care, especially those that meet Medicaid’s eligibility requirements. 
  • National Family Caregiver Support Program (NFCSP)
    • The NFCSP grants states the ability to cover caregiver support services, including respite care, through funds from the Older Americans Act. Local Area Agencies on Aging (AAAs) usually provide aid for caregivers of those 60+ or those with cognitive conditions. 
  • Lifespan Respite Care Program
    • Administered by the Administration for Community Living (ACL), this program allows states to create coordinated systems of respite care for family caregivers of any age with special needs.

Home and Community-Based Services (HCBS) Waivers

Home and Community-Based Services (HCBS) Waivers are an umbrella term used to categorize programs provided by the state and Medicaid. These programs often cover long-term care services and support in a home or community setting. HCBS waivers are known differently in each state, such as Georgia’s Community Care Services Program and California’s Home and Community-Based Alternatives (HCBA) waiver. Additionally, each state may offer several HCBS waivers to cover eligible residents’ various needs. 

Services include:

HCBS waivers widely depend on each state, hence, coverage differs. However, common services include:

  • Adult Day Health Services – recreational programs and health services in a supervised community setting.
  • Behavioral Supports – services related to behavioral changes. 
  • Case Management/ Support and Service Coordination – helps with coordinating and planning their care plans. 
  • Community Transition Services – assistance for those moving from an institutional setting back to the community.
  • Environmental Accessibility Adaptations/ Home Modifications – modifying one’s environment to improve accessibility and safety. 
  • Homemaker Services – assistance with household chores. 
  • Home Health Aide Services – assistance with daily living activities.
  • Home-delivered meals. 
  • Respite Care – relief for primary caregivers/ family caregivers.
  • Personal Care Services – support to activities of daily living. 
  • Private Duty Nursing – skilled nursing at home. 
  • Therapies – physical, occupational, speech-language pathology, and respiratory therapies. 
  • Transportation – assistance with travel to medical appointments. 

States provide a combination of these services to lessen eligible residents’ financial burdens. Additionally, other services that are not usually covered by Medicaid can be subject to approval if they are cost-effective and necessary to prevent institutionalization. 

Eligibility

  1. Medical/ Functional Eligibility (Level of Care)
  • A level of functionality is assessed, which qualifies residents for special care, including nursing facility level of care, hospital level, or intermediate care facility for individuals with intellectual disabilities. 
  • The ability to perform Activities of Daily Living (ADLs) is evaluated, alongside instrumental activities of daily living (IADLs) and cognitive or behavioral needs. 
  1. Financial Eligibility
  • Applicants must meet the Medicaid standard of income and asset limits.
    • In Georgia, CCSP eligibility requires income limits of an average of $2,829 per month or 300% FBR per individual in 2025, while asset limits are $2,000 for an individual and $3,000 for a couple. 
    • California, on the other hand, has abolished the asset limit for most Medicaid programs since January 2024. However, income limits still exist at around $1,801 per month in 2025. 
  • Spousal impoverishment rules may also come into effect to protect a part of a spouse’s income and assets. 
  1. Other Requirements
  • Residency
  • Citizenship
  • Need for Services
  • Waiver Capacity
  • Depending on the state, HCBS waivers provide services to those 55+ or 65+. 

How to Apply for HCBS Waivers

  • Identify HCBS Waiver programs.
    • States may have several HCBS programs; hence, research the right waiver that fits your needs. State Medicaid agencies, Departments of Human Services, or Departments of Aging and Disability provide good resources. 
  • Reach out to the Administering Agencies
    • Local agencies provide more detailed information on requirements, eligibility, and the application process. 

How to Get Medicare and Medicaid to Pay for Assisted Living

Managing the finances related to assisted living can be overwhelming, especially when looking for resources that can help alleviate financial burdens. Fortunately, there are various government aids that can be utilized to supplement assisted living funds. The most common government aids that can help older adults and families are Medicare and Medicaid. 

Older adults, especially those needing assistance with activities of daily living (ADLs), like bathing, grooming, and dressing, can benefit from assisted living services. Additionally, assisted living communities also promote social interactions to ensure older adults will not feel lonely. However, older adults and families may hesitate to transition to assisted living due to expenses, so financial aid may help ease financial challenges.  

Medicare

One of the most commonly used financial aids for older adults, especially those 65 and older, is Medicare, a federal program that focuses on medical care. Medicare does not cover room and board and focuses on medical services, including prescription drugs and skilled nursing services. 

Essentially, Medicare cannot pay for assisted living, but it can cover medical expenses in an assisted living community. 

Medicare Part A or Part B can cover necessary long-term care costs intermittently, including

  • Intermittent skilled nursing care
  • Therapy services, such as physical therapy, occupational therapy, or speech therapy. 
  • Medical social care services for social and psychological issues. 
  • Medical supplies and equipment. 

Medicare also pays for memory care, which can be helpful for those with cognitive conditions, like Alzheimer’s, Parkinson’s, and Multiple Sclerosis. Additionally, hospice care is also fully covered by Medicare Part A. 

Medicaid

Another government aid that can supplement funds for assisted living is Medicaid. It is a federal and state program that helps low-income older adults and people with disabilities. Medicaid also offers Home and Community-Based Services (HCBS) waivers, whose coverage varies by state. 

Medicaid typically does not cover board and room, but can cover assisted living services, including:

  • Assistance with ADLs, including grooming, dressing, and continence management. 
  • Transportation
  • Housekeeping services
  • Recreational activities 
  • Emergency response systems. 

Depending on the state, HCBS waivers of 1915(c) Medicaid waivers can also help with assisted living services.

Eligibility

Focusing on low-income older adults and individuals with disabilities, Medicaid has certain financial and functional requirements that need to be met for eligibility. 

Older adults must be 55+ or 65+ to be eligible for Medicaid, and should meet the following:

  • Individuals must have an income of at most $1,800 per month, while couples should be earning at most $2,433 per month. 
  • Asset limits are generally $2,000. However, some states, like California, have already abolished asset limits. 
  • Assessment by healthcare professionals is also needed to prove the need for financial aid, in terms of medical needs and functionality. 

Things to Consider

Since Medicare and Medicaid do not cover room and board, it is better to find supplementary funds, whether personal or state supplementary, like Optional State Supplementation (OSS). Aside from supplementary financial aid, older adults and families should also consider:

  • State Variability
    • With a wide variation across states, older adults and families can reach out to local agencies for better information. 
  • Dual eligibilities
    • To optimize the benefits of those with both financial aids, older adults should ensure that eligible services are charged to Medicare before Medicaid. 
  • Older adults should ensure that their chosen assisted living community is Medicare and Medicaid certified. 
  • HCBS waivers have limited enrollment, so eligibility does not mean immediate enrollment. Hence, other eligible applicants might be subjected to waitlists, resulting in delays in receiving benefits. 

Assisted living is a retirement option that helps older adults live comfortably in retirement, helping them with activities of daily living and providing room and board. However, funding assisted living might pose a challenge for those on a budget. Hence, financial aid can help supplement funds. While Medicare does not cover room and board, it can help offset expenses for medical services. Moreover, Medicaid waivers, though varying by state, may also provide help with some assisted living services. To avoid hassles and ensure benefits, it is highly suggested for older adults and families to plan accordingly and enroll as early as they can.