Medicare is a federal health insurance program that will cover some of the costs associated with Alzheimer’s disease. The plan you qualify for affects your out-of-pocket costs and the amount of coverage you have access to.

Alzheimer’s disease (AD) is a progressive, degenerative brain condition featuring significant cognitive decline over time. As the most common form of dementia, early signs of AD include memory loss, losing track of time, and trouble completing routine tasks.

As a long-term medical condition, AD requires ongoing care. Medicare will cover many of the initial costs of AD, but it doesn’t always provide the long-term coverage many people need.

Understanding Medicare and its benefits can help you plan appropriately for future care.

Medicare covers many aspects of AD diagnosis and treatment, but each part of Medicare is responsible for a different section of coverage.

Medicare Part A

Known as “hospital insurance,” Medicare Part A focuses on providing coverage for inpatient care or care that requires a stay in a hospital or other treatment facility. For AD, Medicare Part A covers:

Medicare Part B

Medicare Part B takes on the majority of your AD diagnosis and care costs. This part of Medicare is referred to as your “medical insurance.” In AD, Part B will cover costs related to:

  • initial diagnosis, monitoring, and treatment planning
  • outpatient diagnostic tests and cognitive assessments
  • therapeutic treatments, like physical therapy
  • counseling and mental health services
  • certain necessary medical equipment, like wheelchairs

Medicare Part C

Medicare Part C, also known as Medicare Advantage, includes all of the benefits of Part A and Part B (and sometimes the prescription coverage of Part D), but through a private, Medicare-approved company.

This allows a wider variety of advanced plans to choose from, often with more coverage than you’d receive under Original Medicare alone. Many Medicare Advantage plans offer dental, vision, and hearing services for people living with AD.

Some Medicare Part C plans have lower out-of-pocket costs, though you may be responsible for an additional premium or be limited in which doctors you can visit under the plan.

Medicare Part D

Medicare Part D is a prescription coverage plan. It consists of formularies, as well as lists of medications that will be covered under each plan.

Many options under Medicare Part D do cover AD medications like NMDA receptor agonists (Namenda) and cholinesterase inhibitors (Aricept, Exelon, Razadyne). Your plan’s formulary can change at any time, however, so it’s important to monitor your coverage regularly.

Health insurance can make a big difference in AD costs, but even with a Medicare plan, some fees will still be your responsibility.

Generally speaking, Medicare Part B covers 80% of the fees associated with the initial diagnosis and treatment of AD after your deductible is met. Deductibles are the part of your medical bill you have to pay out-of-pocket before your health insurance benefits kick in.

As of 2024, deductibles for Medicare Part A are $1,632 for each benefit period. Deductibles for Medicare Part B are $240 per benefit period.

Medicare Plan D may have a deductible (no higher than $545 annually) or a premium, a monthly amount of money you have to pay to maintain your coverage. Some people also have premiums under parts A and B, but the amount varies based on your income and whether you paid Medicare taxes while working.

The average Medicare Part D premium monthly for 2024 is $34.70. Premiums for Part B typically start at $174.70 per month. If you aren’t eligible for premium-free Medicare Part A, you might pay up to $505 as a monthly plan premium.

Deductibles and premiums for Medicare Advantage (Part C) will vary depending on the private insurance carrier. They may be higher or lower than Original Medicare.

Costs for services

Medicare plans have two types of cost-sharing: copayments and coinsurance.

In addition to the out-of-pocket costs associated with using and maintaining your plan, copayments are fees you’re responsible for paying directly to providers for certain services.

Copayments will vary depending on the service provided. For example, you may be required to pay a copay of $20 for each routine doctor visit for AD.

Coinsurance is the amount you’re required to pay after your deductible has been met. If your Medicare plan states it covers 80% of a covered service, for example, you would be responsible for the remaining 20%.

Out-of-pocket maximum

To help control out-of-pocket costs, some Medicare plans have an out-of-pocket maximum. This is a cap on how much you’re required to pay out-of-pocket annually on an Original Medicare plan.

Average cost estimates

Below is a general breakdown of the costs of Medicare in 2024:

Plan A

  • Premium: $0 to $505/month
  • Deductible: $1,632
  • Coinsurance: varies by facility and length of stay ($0 to $816/day)
  • Out-of-pocket-maximum: none

Plan B

  • Premium: starting at $174.70/month
  • Deductible: $240 annually
  • Coinsurance: 20% of service costs after deductible
  • Out-of-pocket maximum: none

Part C

Costs for Part C plans vary significantly by individual plan with an out-of-pocket maximum of $8,850 or less.

Part D

  • Premium: averages around $55.50/month
  • Deductible: varies, but not more than $545 annually
  • Coinsurance: varies by plan
  • Out-of-pocket maximum: none, but catastrophic coverage takes over if you reach $8,000 in out-of-pocket prescription costs

Coverage gaps and limitations are areas of care in AD that are not covered or have limited coverage under Medicare plans. These “missing links” in services can also result in significant or unexpected out-of-pocket costs.

Coverage caps and limitations specifically relevant to AD under Medicare include:

  • no coverage for long-term nursing home care or assisted living if that is the only level of care needed
  • little to no coverage for adult day care services
  • no coverage for in-home personal care or everyday task assistance if that is the only service required
  • limited options for caregiver respite services
  • all medications may not be covered under Part D
  • the frequency or duration of certain therapies, like mental health services, may be restricted or deemed unnecessary

Some Medicare Advantage plans can fill in gaps left behind in Original Medicare coverage, but many people still need to consider additional insurance.

Several financial assistance and supplemental coverage options exist to help cover the costs associated with Original Medicare plans.

Medicaid

Medicaid is a joint federal and state initiative to help cover medical costs for low-income households. You can qualify for both Medicaid and Medicare at the same time, and Medicaid can help cover some of Medicare’s costs.

Medicare savings programs (MSPs)

MSPs are state-based programs that help you cover the costs of Medicare premiums, deductibles, copayments, and coinsurance. They are typically income-based, but each state determines income verification criteria, and you may qualify even if you exceed the federal income limit listed.

Prescription assistance programs

Many states offer prescription assistance programs that can be used in conjunction with Medicare. You’re often able to apply for these right at your local pharmacy.

Medigap

Medigap is Medicare’s supplemental insurance program. It only works with Original Medicare, but it can help cover your share of the costs in parts A and B. There are 10 different Medigap plans to pick from, but not all of them are available in every state.

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

PACE is another federal program you can participate in alongside Medicare. It provides a variety of benefits for people with AD not traditionally supported under Medicare plans, including:

  • home care
  • adult day care
  • nursing home care
  • meals
  • social services
  • transportation
  • recreational therapy

Special Needs Plans (SNPs)

Medicare SNPs are available specifically for people with AD and other dementias. You may be eligible for these plans if you’re already a Medicare beneficiary and live within the plan’s designated services area. SNPs offer tailored benefits, like special formularies, for people with dementia.

Other programs and initiatives

Private companies, advocacy organizations, and nonprofit agencies may also offer financial assistance for people with AD in need of financial assistance for Medicare.

The costs of managing AD may feel overwhelming at first, but planning ahead, staying informed, and prioritizing organization can help.

Consider these tips to help you plan and manage costs:

  • Compare plans with your coverage needs.
  • Regularly review your current Medicare coverage booklet.
  • Keep up to date with policy changes that affect costs.
  • Write down the basics of your individual plan for quick reference.
  • Estimate monthly costs by comparing your doctor’s treatment plan to the coverage offered by Medicare.
  • Apply for supplemental insurance and assistance programs even if you’re currently managing costs.
  • Make the most of nonprofit services like home visitations and meal services.
  • Ask a loved one to help you find the most affordable options.
  • Track your expenses to understand your spending.
  • Talk with a tax advisor about any tax deductions related to AD care.
  • Work with a financial advisor to ensure your financial resources are optimized.
  • Be proactive about preventive care in other areas to prevent unrelated medical costs.

To learn more about financial planning for AD care or to expand your understanding of Medicare and its programs, visit:

Alzheimer’s care is complex and requires a multidimensional approach with a variety of professionals. Affording every level of care can be a big concern for many people.

Medicare is a federal health insurance program that will cover many of the costs of AD diagnosis and treatment. While some coverage gaps and limitations exist, Medicare plans aim to keep costs low and allow you to utilize assistance from other programs to round out your coverage.

Planning out your care, understanding your Medicare policy, and working with a financial advisor are just a few ways to help manage costs in AD.