A nursing home is a senior living facility that offers the highest level of care and security. Nursing homes provide 24/7 monitoring and support for older people, including keyed entries, emergency response systems and room and board. People might move into a nursing home for a short term after surgery or a long term if they're unable to live on their own safely.
Common services include custodial care (bathing and feeding), specialized medical care and housekeeping. Nursing homes may also offer entertainment and social activities like live music, movie nights and field trips. Because of all the services they provide, they also come at a high cost.
- Nursing home costs differ by state, with Alaska having the highest average monthly cost and Texas having the lowest.
- Nursing home costs also vary depending on the type of facility, the services available and the length of stay.
- Nursing home care is around double the cost of at-home care or assisted living.
- There are many ways to pay, including Medicaid, Medicare, VA benefits and long-term care insurance.
How much does a nursing home cost?
Nursing home costs generally depend on the length of the stay, the services provided and the type of facility. The table below outlines the average costs of nursing home stays in the United States.
|Rate schedule||Semiprivate room||Private room|
However, costs can also vary from state to state.
Average nursing home costs by state
Not all states have the same costs for care. Monthly nursing home costs range from about $5,000 a month in Texas to more than $30,000 a month in Alaska. This chart, put together using Genworth’s 2020 Cost of Care Survey, outlines the average cost by state for semiprivate rooms.
|State||Average daily cost||Average monthly cost|
Cost of home care vs. nursing homes
Costs for these services can range from $20 per hour to more than $8,000 per month, depending on your payment schedule.
|Facility type||Cost per month (average)|
In-home care costs vary based on how often you or your loved one needs assistance, ranging from a few hours a week to live-in care.
You should also factor in any specialized needs, like care related to Alzheimer’s disease or dementia, which can cost an additional $1,500 each month.
How to pay for a nursing home
Nursing home stays can be expensive, but there are many different payment options for residents and their families.
Medicare can cover a portion of short-term inpatient stays, like intensive rehabilitation, but its coverage is otherwise fairly limited. That said, Medicare can still help cover other costs while you or a loved one is in a nursing home, like medical services or hospital stays.
Medicaid may be an option for individuals making less than about $2,313 per month, but it depends on your state’s requirements. If someone is eligible for Medicaid support, it should cover 100% of the cost of nursing care in a nursing home.
However, Medicaid usually won’t cover medical services outside of the facility itself. Each state also sets its own “Nursing Home Level of Care” that dictates the level of care someone needs and how it affects their Medicaid eligibility. In most cases, the more help they need, the more likely they’ll be eligible for Medicaid coverage.
Payments can be complicated with Medicaid because there are deductions and income limits to keep in mind, so many people choose to work with a Medicaid planner to figure out their options.
Department of Veterans Affairs benefits may help cover the cost of a stay at a nursing home or another senior living facility if you’re a veteran. Using your VA benefits is a good idea because they’re more comprehensive than many other options. The VA also offers quite a few services dedicated to helping veterans figure out their options and coverage levels.
Prospective nursing home residents need to be signed up for VA health care to be eligible for coverage. VA benefits can be used to stay in non-VA nursing homes, VA-nursing homes and state veterans homes.
Long-term care insurance
Long-term care insurance provides an additional level of medical coverage that can help pay for an extended stay in a nursing home. However, you have to buy this type of coverage before you actually need it. If you wait until you require a nursing home, you will either not qualify for coverage or be charged an excessive amount. Most people choose to buy this type of coverage when they’re hitting their 50s. Because of its expense, long-term care insurance is usually better for people who make a good amount of money.
Skilled nursing is more expensive than many other senior living options.
A reverse mortgage is a type of loan that's available to homeowners aged 62 or older. Reverse mortgages let you take out loans against the value of your home, but you need to have a good amount of equity to use this option. Borrowers can use the funds provided to pay for anything they want, including a nursing home stay.
However, a reverse mortgage has to be paid back once the homeowner dies, moves away for at least one year or sells the home. While the loan should be covered by the sale of the home, it takes away from any planned inheritance.
You can also pay for a nursing home stay out of pocket without any type of assistance, but the expense is significant. If you have enough money, you can even pay in advance without having to worry about monthly costs.
Cashing out savings or retirement accounts helps cover nursing home costs. Just make sure you understand all of your options and what it means for your bottom line.
Before cashing out a retirement plan, check the tax implications to make sure it’s a viable option. For example, if you cash out your 401(k) before it’s matured, you will have to pay both a penalty and taxes on the account.
Some life insurance policies allow you to access your funds while you’re still alive in order to pay for nursing home coverage. This may be a good option if you don’t qualify for any other form of assistance. However, this is a pretty limited solution for most people because it’s hard to qualify for and it may not offer much of a return. Plus, it limits how much your family receives when you pass away.
Most people afford nursing home care by combining a few of the above options.
Bottom line: Is a nursing home the best choice?
Paying for nursing home care can be expensive and complicated. If you or your loved one qualifies for less intensive care, like an assisted living facility, that’s generally a better option. However, a nursing home is the only safe, logical option for many people. This is why it’s important to plan ahead and figure out a sustainable payment solution that benefits not only the resident requiring care but also their family.
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