What are the Alternatives to Nursing Homes for Persons with Alzheimer’s / Dementia?

Dementia patients who require nursing home-level care do not necessarily have to move into a nursing home. They can receive the level of care they need in other settings, including their own home. This is often a welcome option for dementia patients, who tend to be extra anxious and upset when removed from their familiar surroundings and routine, and their families, who would prefer to see their loved ones age in place if possible. Even if they can’t remain in their own home, there are other alternatives for dementia patients who require nursing home type of care, such as assisted living residences, memory care communities, adult foster care and adult day care.

What is a Nursing Facility Level of Care?

The technical term used in the healthcare industry to describe the type of constant care and supervision associated with a nursing home is a Nursing Facility Level of Care, commonly abbreviated NFLOC. The exact definition of NFLOC can vary by state, but in general states will evaluate an individual’s ability to complete the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting), as well as any cognitive or behavioral issues, to determine if they require a NFLOC. In some states, needing help with two of the five Activities of Daily Living might be required for a NFLOC designation, in others it might be needing help with three of the five. Some states may place more emphasis on in-person evaluations, others on the recommendations of a primary care provider.

It’s important to note that a diagnosis of Alzheimer’s disease or dementia does not automatically lead to a NFLOC designation. However, many Alzheimer’s and dementia patients will meet the standards and receive the designation, which is an eligibility requirement for many of the Medicaid programs that provide nursing home alternatives.

Receiving a Nursing Facility Level of Care at Home

Most people would prefer to age in place in their own home. This may seem unlikely for people with dementia who require a NFLOC, but it is possible. Medicaid can provide a wide range of benefits, including non-medical long-term care, that will help dementia patients remain in their own home, like in-home nursing visits, home modifications, assistive technology and even paying family members to provide care. Options unrelated to Medicaid include live-in caregivers, adult day care and unpaid caregiving from family members.

Medicaid's Nursing Home Alternatives

Medicaid is public insurance for Americans of any age who are financially limited. To qualify, applicants must meet an asset limit and an income limit. These limits can vary by state, as can Medicaid’s rules and programs. There are multiple Medicaid programs that can act as nursing home alternatives for people with dementia, which we will discuss next.

Home and Community Based Services Waivers
Medicaid’s Home and Community Based Services (HCBS) Waivers will cover long-term care services and supports to qualified dementia patients who live in their own home or the home of a loved one (and, in most states, assisted living residences, memory care communities and adult day care, which is detailed below). To qualify, applicants must need a NFLOC (or, for a few HCBS Waivers programs, be at risk of needing a NFLOC) and they must meet the financial eligibility requirements.

Not only can HCBS Waivers benefits can vary by state and program, they can also vary based on the needs of the individual. So, two people living in the same state could be enrolled in the same HCBS Waiver, but receiving different benefits because of their needs. With that being said, available HCBS Waivers benefits that might assist dementia patients with aging at home could include (but are not limited to) the following:

• In-home skilled nursing
• Physician’s visits
• Case management
• Home modifications for safety and accessibility
• Personal Emergency Response Systems (PERS)
• Meal delivery
• Housekeeping assistance (cooking, cleaning, shopping, laundry, etc.)
• Chore services
• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting)

Aged, Blind and Disabled Medicaid
Aged, Blind and Disabled (ABD) Medicaid may also be called state or regular Medicaid, but it shouldn’t be confused with the regular Medicaid that is available to people of all ages. ABD Medicaid will also cover benefits that can help qualified dementia patients who need a NFLOC remain living at home rather than moving to a nursing home, most notably personal care assistance with the Activities of Daily Living.

The financial requirements for ABD Medicaid tend to be even more restrictive than those for HCBS Waivers, but not in all states. And ABD Medicaid applicants do not need a NFLOC. However, if they want to receive the kind of long-term care benefits that can help them age in place, they will need to show a need for those benefits.

Consumer Directed Care
Some HCBS Waivers and ABD Medicaid programs allow for Consumer Directed Care, which gives Medicaid beneficiaries some decision-making power when it comes to their care. This power can range from having a few extra medications to choose from, to having their own budget to spend on healthcare expenses, including caregivers of their own choice. These caregivers can be family members in many cases, and some states even allow spouses to be hired as caregivers.

These family member caregiver usually provide non-medical services like personal care assistance with the Activities of Daily Living, housekeeping help or chore services. They may be required to pass a background test or take caregiving classes, and they will be paid, on average, about the same rate as caregivers providing similar services in the same geographical area. Consumer Directed Care is also known as Self-Directed Care, Participant Direction, Consumer Directed Services and Self-Administered Services, among other names, including some that are state-specific. Previously, it was commonly called Cash and Counseling.

Money Follows the Person
Medicaid’s Money Follows the Person (MFP) provides support for Nursing Home Medicaid beneficiaries who want, and are able to, leave a nursing home and return to living somewhere in the community, including their own home or the home of a loved one (or, in other cases, assisted living residences). This support can include paying for transitional expenses like movers, utility set up fees and purchasing essential furniture and appliances.

MFP will also help cover long-term care expenses in the community so the beneficiary can receive the same level of care they were receiving in the nursing home. However, this long-term care coverage only lasts for one year. After that, another Medicaid program will cover long-term care expenses, assuming the individual is eligible and has applied, such as HCBS Waivers. MFP can also cover home modifications and assistive technology to help ease the transition from the institution to the community.

MFP may also be referred to as a “Money Follows the Person Rebalancing Program” or a “Money Follows the Person Demonstration Program.” And some states have their own names, like West Virginia, where MFP is known as “Take Me Home,” or New York, where it’s called “Open Doors.”

Program of All-Inclusive Care for the Elderly 
The Program of All-Inclusive Care for the Elderly (PACE) was designed to help individuals who need a NFLOC remain living in the community instead of moving to a nursing home. PACE streamlines all healthcare, social service and long-term care benefits and coverage into one plan for program participants, including Medicaid and Medicare benefits for those who are dual eligible. PACE also coordinates hearing, vision and dental care, and PACE day centers provide meals, social activities, exercise programs and regular health checkups and services to members.

There are 185 PACE organizations operating in 33 different states. In some states, PACE is known as LIFE (Living Independence for the Elderly). Being enrolled in Medicaid is not a requirement for PACE, but it is free for Medicaid beneficiaries. Click here to find a PACE program near you.

Caregiving by a Loved One

Caregiving by a loved one is very common for people with Alzheimer’s disease or other dementias, whether it’s a spouse, adult child or grandchild, some other relative or a friend. Receiving care from loved ones is appropriate for dementia patients in the early stages, but it often becomes too difficult after a few years as the disease progresses, especially if the caregivers are elderly themselves. Caring for people with dementia might mean helping them get out of bed, bathe, dress, eat, take their medication, pay their bills, maintain their house and get to their doctor’s appointments. This can be a huge task, and it can be made more challenging if the dementia patient is aggressive or suffers hallucinations.

There is some respite care available that can provide temporary relief for caregivers. These can often be free or relatively affordable, but the downside is they may only offer a few hours of care per week, usually during one window of time.

Medicaid can pay loved ones to care for qualified individuals with dementia, as mentioned above, and there are other programs that will compensate loved ones for providing care. However, not every family member or friend will be eligible, and the pay is often minimal.

Live-in Care

Live-in caregivers can be a great option for people with dementia who have the space and the money. Live-in caregivers will obviously need their own room, so this option is limited to people who have an extra room in their house, which is not unusual for seniors. The cost for a live-in caregiver can vary depending on the location and the patient’s care needs, but the national average for a home health aide in 2024, according to the 2024 Cost of Care Survey conducted by Genworth and CareScout, was $213/day. In general, live-in care is slightly less expensive than 24-hour home care because some of the cost is offset by the room and board received by the live-in caregiver. So, using that extra room as an asset can be smart financial decision for some seniors.

There are certain legal requirements that must be met when hiring a live-in caregiver. For full-time care seven days a week, one would need two caregivers because four to five days per week is the maximum that someone is legally allowed to work. For the other two or three days, there would need to be another caregiver with the same skills and qualifications. Plus, caregivers must have four hours off every 24 hours, and an eight-hour allotment every night to sleep. Proper insurance is also necessary when hiring live-in caregivers, including, at the minimum, liability insurance and worker’s compensation insurance in case of injury or negligence.

Medicaid is by far the best source of financial assistance for live-in care. In fact, there is very little non-Medicaid, public assistance available for live-in care and Medicare offers no assistance. VA Pensions could be used to help pay for live-in care, but this could potentially use up the majority of the pension.

24-Hour Home Care

This option typically more expensive than live-in care because it involves hiring three people to share the caregiving duties. The three caregivers might each take 12-hour shifts, or they could split the time by working eight-hour shifts. Depending on the dementia patient’s care needs and where they live, the hourly rate for home care is between $18 and $33, and most of these caregivers will need to be paid by the hour.

In general it is easier to find caregivers through home care agencies to provide 24-hour care than it is to find a live-in caregiver. Working through a home care agency also eliminates the logistics associated with hiring an employee directly, like insurance, payroll and taxes. On the other hand, rotating caregivers can cause confusion for dementia patients, who usually like as much consistency as possible.

There are also more financial assistance options for 24-hour home care than there are live-in caregivers. That list still starts with Medicaid, but it also includes PACE/LIFE and some Medicare Advantage programs, as well as VA Pensions.

Adult Day Care

Although they are located outside of the home, Adult Day Care centers can provide daytime supervision, socialization and meals for seniors who live in their own home or the home of a loved one. These centers can be an invaluable part of a nursing-home-alternative care plan for dementia patients and their families by reducing the need for in-home caregivers and allowing family caregivers time to work, or rest.

In order to admit dementia patients, Adult Day Care centers must be able to safely care for them, and not all centers have that capability. Those that do may be referred to as Specialized Adult Day Care, and they will have staff trained to work with Alzheimer’s and dementia patients, as well as comprehensive medical care and facilities designed specifically for dementia residents. This Specialized Adult Day Care differs from Social Adult Day Care, which provides supervision but not medical care, and Adult Day Health Care, which provides supervision and medical care, but not dementia-specific care.

Although Adult Day Care centers can vary by location, most of them also offer exercise programs, recreation activities, education/classes, counseling and transportation to and from the facility, in addition to supervision, socialization and meals. Centers that provide medical care will offer medication management and regular health checkups, and they will be staffed by healthcare professionals who provide daily medical oversight. They might also offer regular audiology, optometry and podiatry care. The PACE/LIFE centers described above provide medical care, and most of them are specialized enough to admit dementia patients in the early and middle stages.

The national average cost for Adult Day Care in 2024 was $71/day, according to the 2024 Cost of Care Survey conducted by Genworth and CareScout. but there were dramatic fluctuations by state. The average daily cost ranged from $25 in Delaware to $202 in Oregon. There were also significant gaps in neighboring states, like $48 in Iowa and $124 in Nebraska. Medicaid can cover all or some of the cost of Adult Day Care through an HCBS Waiver or ABD Medicaid for qualified individuals, depending on the state.

Nursing Home Alternatives Outside the Home

If living at home becomes too difficult or unsafe as dementia advances into the middle and later stages, patients will need to relocate, but they may not need to move straight into a nursing home. Memory care communities, assisted living residences, residential care facilities and adult foster care may all be able to provide care to Alzheimer’s and dementia patients who can no longer live at home. Planning for this should begin as soon as there’s a diagnosis before moving becomes necessary so that your loved one can provide input on which residential care option is best for them.

Memory Care

Memory care is assisted living specifically designed for people with Alzheimer’s disease or other dementias. Memory care facilities may be located in a wing of an existing assisted living community, or it could an entire residence with no other affiliations. Most of these facilities can care for, and admit, dementia patients in the early, middle and late stages of the disease.

Memory care staff is specifically trained to communicate with and assist people who have dementia. The buildings and rooms in most facilities are meant to feel homey and comfortable to help ease residents’ anxieties, and they also have security systems to prevent wandering. The organized activities at memory care residences are picked so dementia patients can participate without frustration.

Memory care is often the best option for dementia patients who have to move out of their own home, but it can be expensive. The average cost of memory care in 2024 was $7,139/month according to the 2024 Cost of Care Survey conducted by Genworth and CareScout, but that can vary significantly by state – memory care was $10,342/month in New Jersey in 2024, while it was $5,669 in Utah. Medicaid won’t cover room and board in memory care, but it will cover long-term care services and supports, which can significantly lower the cost in some residences.

Learn more about the differences between memory care and nursing homes.

Adult Foster Care

Adult foster care homes are normally staffed by professional caregivers, can accommodate a small number of seniors (anywhere from 2-6) and try to create a family-like environment with personalized care. Depending on the caregiver and the home, they may be able to accommodate Alzheimer’s or dementia patients in the early and middle stages. Residents constant supervision in adult foster care, as well as housekeeping services (cooking, cleaning, shopping, etc.) and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting) as well as cleaning, cooking, shopping, laundry and even medication management. Medicaid will not pay for room and board in adult foster care homes, but in some states it will cover long-term care services and supports for residents who are Medicaid beneficiaries.

Medicaid also offers Structured Family Caregiving (SFC) in 11 states – Connecticut, Georgia, Indiana, Louisiana, Massachusetts, Missouri, Nevada, North Carolina, Ohio, Rhode Island and South Dakota. SFC, informally called adult foster care by some, will pay family members to provide supervision, housekeeping services and assistance with the Activities of Daily Living to their aging loved ones who are Medicaid beneficiaries. The SFC family member caregiver and the care recipient must live together, and the care recipient must be enrolled in a Medicaid program that offers SFC. The caregiver must also be 18 or older, pass a background check and be willing and able to be the senior’s primary caregiver.

Residential Care Homes

Residential care homes are also known as group homes or board and care homes. Some of these residences are capable of caring for Alzheimer’s or dementia patients in the early and middle stages, depending on their specific needs and circumstances. Meals, snacks, and housekeeping will be taken care of at residential care facilities, but there will probably be less structured activities and socialization than at memory care or other assisted living facilities.

The cost for residential care homes can range from $3,000 to $5,000. There are Medicaid programs that may help cover the cost, depending on the state, and VA benefits can also be used. Seniors and their families can also get free assistance locating a residential care facility that fits their needs.

The Green House Project

The Green House Project is an alternative to traditional assisted living, memory care, and nursing homes for some dementia patients, and there are Green House residences in more than 30 states with close to 400 homes nationwide. These residences house 10 people or less in an intimate setting. Seniors who move into Green House Project homes share common areas but have their own rooms and bathroom. There are no structured activities. This requires a higher level of independence and means the home might not fit for someone in the later stages of dementia. These homes have small staff-to-resident ratios, and staff is trained to deal with the health and personal care needs of people with Alzheimer’s and dementia. The homes are designed to be state-of-the-art in terms of energy efficiency and smart technology like adaptive care devices and senior-friendly computers. Costs are similar to a nursing home, making this an expensive option for your loved one. To find a home, visit the company’s website here.