Policy & oversight
GAO: Medicare and Medicaid Together Spent About 12 Billion Dollars on Assisted Living Services in 2024, but Neither Covers the Cost of a Room
A federal watchdog report maps what government programs pay for inside assisted living facilities and what they do not, finding that the legal bar on using Medicaid funds for room and board is the main reason eligible seniors cannot access care they qualify for on paper.
By the Goodsurance editorial teamJuly 31, 2026
A Government Accountability Office report released in July 2026 found that Medicare and Medicaid together spent approximately 12 billion dollars on services delivered to residents of assisted living facilities in 2024. Federal Medicaid funds accounted for at least 3.5 billion dollars of that total, covering personal care and home and community-based services for income-eligible residents. Federal Medicare payments for health services provided to assisted living residents, such as skilled nursing visits, physical therapy, and hospice, made up about 8.7 billion dollars.
Both programs pay for health services delivered while a person lives in an assisted living facility, but neither program covers the room and board costs that typically represent the largest share of an assisted living bill. Medicare does not cover custodial or residential care in assisted living at any income level. Medicaid programs in 44 states cover a range of personal care services for eligible residents, but federal Medicaid statute prohibits those funds from being used for room and board in assisted living settings.
Medicare and Medicaid spent 12 billion dollars on assisted living services in 2024, but neither covers the room. A GAO report explains the gap.
The GAO found this restriction has practical consequences beyond a legal technicality. State and national organizations told researchers that Medicaid's inability to cover room and board is the primary barrier preventing more low-income older adults from using federal dollars to remain in assisted living rather than entering a nursing facility. The result, in the GAO's framing, is that Medicaid coverage of assisted living services can exist on paper without being financially realistic for many applicants.
For Medicare-eligible seniors weighing long-term care options, the report reinforces a persistent coverage boundary: Medicare covers limited post-acute skilled care, not long-term residential care, and neither federal program closes the gap between what the government pays and what assisted living actually costs.
In plain words
A government report looked at how much Medicare and Medicaid pay for care inside assisted living facilities. Together they paid about 12 billion dollars in 2024 for health services delivered there.
But neither program pays for the room itself or for meals. That part, called room and board, is almost always a private cost. Medicare does not cover long-term assisted living at all. Medicaid can pay for some personal care services in most states, but by law it cannot pay for the room.
This means many seniors who qualify for Medicaid help still cannot afford assisted living. The government covers some of their health care but not their housing. The report says this is the main reason many eligible people cannot access the care they legally qualify for.
Understand the basics first
Source: GAO
Read at the source →