Nursing Homes & Dementia/Alzheimer’s: What to Know

As Alzheimer’s disease or other dementias progress and symptoms worsen, patients require greater levels of care, and eventually many of them will need to live in a nursing home. This can be a difficult decision for families for several reasons – most seniors would prefer to stay home, the availability and quality of local nursing homes, and the high price. The cost of nursing home care can vary greatly from state to state, but the nationwide average is close to $120,000/year. Financial assistance is available and discussed below, along with some other key facts, so you and your family can make the best decisions when it comes to nursing home care and dementia.

Nursing Homes: Basic Definitions and Comparisons

• Nursing homes provide long-term care on an ongoing basis. This includes all medically necessary care and medications, as well as non-medical care like personal assistance with bathing, dressing, eating and toileting. Nursing homes are intended for patients who cannot live in their houses, but do not need hospital-level care.
• Nursing homes are not the same as skilled nursing facilities, which are are intended for short-term care, rehabilitation, or recovery from injury. There are some locations, however, that may have both a skilled nursing facility and a nursing home on the same property and operated by the same organization.
• Nursing homes are not the same as memory care, which are assisted living residences specially designed for dementia patients. Memory care offers a more home-like environment and is well suited for people with mild to moderate Alzheimer’s or dementia symptoms.
• And nursing homes are not the same as non-memory care assisted living residences, which provide various levels of care and types of environments. Some of them may be suited to early stage dementia patients.

Nursing Home Costs

In 2024, the average cost of a semi-private nursing home room in the U.S. was $9,277/month ($111,325/year), according to the 2024 Cost of Care Survey conducted by Genworth and CareScout. The cost of nursing home care does vary dramatically by state. The five states with the highest monthly prices for semi-private nursing home rooms in 2024 were: Alaska ($30,371), Oregon ($15,817), Hawaii ($15,087), Connecticut ($15,056) and New York ($14,722). And the five states with the lowest monthly prices were: Texas ($5,475), Missouri ($6,357), Oklahoma ($6,448), Arkansas ($7,148) and Louisiana ($7,483).

Unlike assisted living or memory care, the cost of care in a nursing home does not rise based on the amount of care required by the resident.

Financial Assistance for Nursing Home Care for Persons with Dementia

Most families can not afford to privately pay the full nursing home cost for very long. The only public insurance program that covers the full cost of nursing homes is Medicaid. This is why 63% of all nursing home residents, nearly two out of every three, are enrolled in Medicaid, according to the American Health Care Association.

Many Veteran’s Affairs (VA) Homes are nursing homes, and eligible veterans can receive care and live in VA Homes for little or no charge, depending on the veteran’s financial situation, healthcare needs and military history, and as long as there are available spaces. This locator tool from the VA can help you find VA Homes near you that provide nursing home level care. VA pensions could also be used to help cover the cost of nursing homes for eligible veterans. It should also be noted that veterans can have both Medicaid and a VA pension, although some portion of the VA pension will likely be counted toward their income limit for Medicaid eligibility.

Medicare does not cover long-term care in nursing homes. It only covers 100 days or less in skilled nursing facilities for rehabilitation purposes.

Medicaid

Medicaid is a public insurance program for people of any age with limited financial resources. The federal government helps fund Medicaid and provides oversight and guidelines, but the program is operate by individual states, so Medicaid’s rules, benefits and eligibility criteria can all vary by state.

There are many Medicaid programs, including Nursing Home Medicaid, which will pay for all essential expenses in a nursing home. This includes room and board, as well as physician’s care, skilled nursing, prescription medication, exercise/social activities, personal care assistance with the Activities of Daily Living (mobility, bathing, dressing/grooming, eating, toileting), and any other medical or non-medical services and supports that are deemed medically necessary. Medicaid will not cover a private room, in-room phone or TV, specialized diet or comfort items like flowers, books or sweets.

To qualify for Nursing Home Medicaid applicants must meet two financial requirements – an asset and income limit. In most states in 2025, the individual asset limit for Nursing Home Medicaid is $2,000. Some assets can be exempt from the limit, such as a primary home, home furniture and appliances, personal items like wedding and engagement rings, and a primary vehicle. The individual income limit in most states in 2025 is $2,901/month. Almost all income is counted, with the exception of VA Aid & Attendance pension. It should also be noted that Nursing Home Medicaid beneficiaries must give most of their income to the state to help cover the cost of care. They are only allowed to keep a small personal needs allowance ($30 – $200/month, depending on the state), enough to pay other insurance premiums and enough to make Medicaid-approved monthly allowance payments to low-income spouses (if applicable).

Even if a dementia patient does not meet their financial eligibility limit, there are still ways they can qualify for Medicaid long-term care. There are Medicaid Planning strategies that will help them legally and ethically reduce their assets or income until they meet their limits and can qualify for the care they need. These strategies tend to be complicated, so it’s best to consult with a professional before attempting them on your own.

Applicants must also need a Nursing Facility Level of Care (NFLOC) to qualify for Nursing Home Medicaid. This means the type of care normally association with a nursing home, although how a NFLOC is defined and evaluated can change depending on the state. In some states, needing help with three of the Activities of Daily Living is required for a NFLOC designation, in other states it’s needing help with two of them. Some states will place greater emphasis on the in-person test than on doctor’s recommendations, and in some states it’s the other way around.

A diagnosis of Alzheimer’s disease or dementia does not guarantee a NFLOC designation in any state. However, cognitive function is taken into consideration by all states. Many dementia patients, especially those in the middle or late stages, will be given a NFLOC designation by their state.

Nursing Home Medicaid is an entitlement. This means all eligible applicants are guaranteed coverage without wait. They are not guaranteed a place in any nursing home they choose, because some nursing homes don’t take Medicaid, and those that do may not have any available space.

Medicare

Medicare is a pubic insurance program for Americans who are age 65 or over (and/or disabled, or have Lou Gehrig’s disease, or have end-stage renal disease, but this article is focused on seniors 65 and older). It is operated by the federal government, so its rules, benefits and eligibility are consistent across all states.

Medicare does not cover ongoing long-term care in nursing homes. It only covers up to 100 days in skilled nursing facilities for rehabilitation purposes.

Veteran’s Programs

Qualified veterans with dementia (or their surviving spouses with dementia) can also receive financial assistance through a Veterans Affairs (VA) Pension that they could use to pay for a nursing home, although it will only cover a fraction of the cost. There are three levels of VA Pensions – Basic, Aid & Attendance (A&A) and Housebound. To qualify for any of them, veterans or their surviving spouses need to meet a net worth limit of $159,240 (effective Dec. 2024 – Nov. 2025), which is calculated by adding the total of their assets to their annual income. Some assets are exempt, like a primary home, primary vehicle and household furniture and appliances. The income of the applicant must also be less than the pension they’re applying or in order for them to be eligible. And applicants must have met a military service requirement, which includes not having received a dishonorable discharge.

Qualified veterans could also live in a State Veterans Home, which are facilities for veterans and their eligible dependents who require various level of care, including a Nursing Facility Level of Care. Many VA Homes are also licensed as nursing homes or skilled nursing facilities that will provide long-term care, but not all. Some only offer assisted living levels of care, and some do have memory care units for veterans in the early and middle stages of dementia.

Finding the Right Nursing Home

To find a nursing home that meets your needs takes time and energy. A great place to start is the Nursing Home Compare. This is a free tool administered by the Centers for Medicare and Medicaid (CMS). Not only can it locate all nursing homes in any particular area, it can tell you which of those homes accept Medicaid. It can also filter results by rankings for things like quality of care, staffing and overall quality. The tool uses a database comprised on information and surveys from more than 15,000 nursing homes around the country.

After making a list of all nursing home possibilities in the area, seniors and their families should call the homes to see if they have any available spaces. If they do, the next step is for the dementia patient and their family to make a personal visit. Call first to make an appointment for the visit, and arrive prepared with a list of questions. Some things you might ask are: Does the residence coordinate social activities? Does it provide transportation? Who are the staff doctors? What are the meals like? How will the residence provide access to oral and eye care? CMS has a thorough “Nursing home checklist” you can use to evaluate a nursing home while visiting.

Does dementia get worse in a nursing home?
As they’re considering nursing homes, many families wonder if living in a nursing home accelerates cognitive decline. That may have been the case in past decades, but it is not a widely held belief any longer. A recent study found that patients with dementia did not do better or worse in comparison to other nursing home residents when it came to cognitive decline. because they were placed in a nursing home. Today, approximately 15% of nursing homes have Special Care Units (SCU) with staff trained specifically to assist individuals with dementia.

Admission Process

After visiting the relevant nursing homes and finding one (or more) that meets the needs of the Alzheimer’s or dementia payment, it’s time to apply. The application process while include a medical needs assessment, but that is more to determine how the nursing home will be able to serve the candidate’s needs, and less about whether their needs are severe enough to require admission to a nursing home.

The more challenging part of the admissions process is often the financial piece. This will not be the case if the applicant is paying privately for the nursing home, or if they are already enrolled in Nursing Home Medicaid and the home has available spaces. However, in the event that a senior needs nursing home suddenly and doesn’t have the money to pay out-of-pocket but hasn’t yet applied for Medicaid, getting a nursing home to accept them can be a challenge.

Applying for Medicaid is a complicated process and can take as long as six months to gather all the required paperwork and properly complete the applications. Then, it can take another three months to get a reply from the state. Nursing home bills could exceed $100,000 in that period of time.

“Medicaid Pending” can be a safety net in these situations. Anyone who has applied for Medicaid but has not yet received a response from the state has Medicaid Pending status. Some nursing homes will admit seniors, including those with Alzheimer’s or other dementias, with Medicaid Pending status without any requiring any payment from the senior or their family. They do this with the expectation that Medicaid will pay for all outstanding expenses after the senior has been enrolled. Before accepting a Medicaid Pending senior, most nursing homes will ask to see their Medicaid application and financial records to determine for themselves if the applicant will be accepted by Medicaid or not.