Medicare Coverage for Alzheimer's and Dementia: What Is Covered and What Is Not

Alzheimer's disease and other dementias are among the most costly conditions in the Medicare population, and coverage questions come with urgency for caregiving families who often discover the gaps mid-crisis. Medicare covers many aspects of dementia care, diagnosis, physician management, medications, and some home health, but it does not cover the ongoing custodial care that becomes necessary as the disease progresses. Understanding what Medicare covers and where it ends helps families plan before the care transition, not during it.

Bryce's Take

The dementia coverage conversation is one of the most important ones I have with families, and it almost always starts too late. Medicare covers the medical care. It does not cover the daily supervision, the memory care facility, the personal aide. The earlier a family understands that gap and starts planning around it, with long-term care insurance, Medicaid planning, or private savings, the more options they have. If this situation is emerging for your family, the time to have this conversation is now.

Diagnostic workup and cognitive assessments

Medicare Part B covers the diagnostic evaluation for dementia including physician visits, neurological examination, neuropsychological testing, brain imaging (MRI, CT, PET scan when medically indicated), and laboratory testing. The Annual Wellness Visit under Medicare Part B includes a cognitive impairment assessment as a standard component at zero cost-sharing. If the Annual Wellness Visit assessment suggests concerns, the resulting physician evaluation and referrals are covered under standard Part B cost-sharing. Diagnostic workups for new or suspected dementia are covered medical services.

Lecanemab and new Alzheimer's disease-modifying therapies

CMS made a significant coverage decision in 2023 and 2024 regarding lecanemab (Leqembi) and other amyloid-targeting Alzheimer's treatments. Medicare covers lecanemab for patients with early-stage Alzheimer's (mild cognitive impairment or mild dementia) with confirmed amyloid pathology, administered at approved infusion facilities. This coverage comes with conditions including clinical monitoring requirements. Coverage is under Part B as a physician-administered drug, with 20% coinsurance applying. Medigap Plan G covers this coinsurance. This remains an evolving area of Medicare coverage as additional disease-modifying therapies receive FDA approval.

Medications under Part D

Alzheimer's medications including cholinesterase inhibitors (donepezil, rivastigmine, galantamine) and memantine are covered under Medicare Part D. Psychiatric medications used to manage behavioral symptoms of dementia including certain antidepressants, antipsychotics, and anti-anxiety medications are also covered under Part D. Formulary placement and cost-sharing vary by plan. The $2,000 annual out-of-pocket cap for Part D starting in 2025 provides protection for patients on multiple dementia-related medications.

Home health coverage for dementia patients

Medicare Part A and Part B cover skilled home health care for dementia patients who are homebound and have a need for skilled care, nursing, physical therapy, occupational therapy, or speech therapy. A common coverage scenario is a dementia patient who is homebound and needs skilled nursing for medication management, wound care, or physical therapy for fall prevention. The Jimmo v. Sebelius settlement supports coverage even when improvement is not expected, as long as skilled care is needed to maintain function or prevent further decline. Home health aide services are covered when accompanying skilled care, but not as the sole service.

Navigating Medicare coverage for a family member with dementia?

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The custodial care gap

What Medicare does not cover is the ongoing custodial care that constitutes most of the cost of dementia care as the disease progresses: supervision to prevent wandering, assistance with activities of daily living, memory care unit residence, and the daily care management that dementia patients need. Nursing home care beyond the 100-day Medicare SNF benefit is not covered. Memory care units, which typically charge $4,000 to $8,000 per month or more, are not Medicare benefits. This care falls to private pay, long-term care insurance, or Medicaid for qualifying individuals.

Medicare Advantage and dementia care

Medicare Advantage plans may offer additional benefits relevant to dementia patients including caregiver support programs, home modification benefits, transportation to medical appointments, and meal delivery. Some C-SNP plans are designed specifically for enrollees with neurological conditions. However, Advantage plan prior authorization requirements for home health services and specialist referrals can create friction for dementia patients whose families are already managing complex care coordination. The prior authorization burden is worth weighing when evaluating Advantage plans for a family member with dementia.

Frequently asked questions

Does Medicare cover memory care facilities?

No. Memory care facilities and units are residential care settings not covered by Medicare. They are custodial care environments, not skilled medical facilities. Payment is typically private pay or Medicaid for qualifying individuals.

Can a dementia patient in Original Medicare see a neurologist without a referral?

Yes. Under Original Medicare, no referral is required for specialist visits including neurology. Under Medicare Advantage HMO plans, a referral from a primary care physician is typically required.

Does Medicare cover in-home dementia care aides?

Only when home health aide services accompany skilled care. Medicare does not cover personal care aides or companionship care for dementia patients as standalone services. Medicaid covers these services for qualifying individuals.

Is genetic testing for Alzheimer's risk covered by Medicare?

Coverage for genetic testing related to Alzheimer's risk, such as APOE e4 genotyping, is not broadly covered by Medicare as a preventive service. Genetic testing in the context of clinical care for early-onset Alzheimer's may be covered in specific circumstances. Consult your physician about coverage for specific genetic tests in your clinical context.

Bryce Casson

Licensed Independent Medicare Broker

Bryce Casson is an independent Medicare insurance broker who works with every major carrier. He does not represent any single insurer, which means his recommendations are based on what actually fits each client's situation, not on commissions or quotas.