Key takeaways:
Nursing homes provide long-term medical and personal care to individuals who can no longer live independently.
On average, nursing homes cost $7,900 to $9,000 per month, but the price varies significantly depending on your needs and where you live.
Medicaid and long-term care insurance may help you offset some of the costs.
If your loved one can no longer live independently, you have likely considered a long-term care option like a nursing home. These settings offer various levels of care and can provide assistance to those who need help with activities of daily living (ADLs), such as bathing and dressing.
Nursing homes can be helpful if you or a loved one needs daily medical and personal care, but they can be more expensive than other long-term care options. It’s important to consider all the costs involved and various payment options to help make this life-changing transition easier.
What is a nursing home?
A nursing home is a place for anyone who needs 24-hour medical care and supervision but is not sick enough to be in the hospital. Some nursing homes offer specialized care to help people with memory problems such as Alzheimer’s disease.
Some nursing homes also offer skilled care, which is when licensed professionals, like nurses and therapists, treat and manage residents’ medical conditions. In this case, the nursing home is called a skilled nursing facility (SNF). If a person just needs help with daily tasks, a licensed professional may not be required, and a home that offers what is commonly known as long-term or custodial care might be a good fit.
A common misconception is that nursing homes are only for older people, but anyone who needs care that can’t be provided at home can stay at one of these facilities. They can be a short-term option if you’re recovering from an illness or need rehabilitation. However, many nursing home residents live there permanently because they need constant care.
How much does a nursing home cost per month?
The cost of nursing homes varies by geographic location. According to a 2021 Genworth Cost of Care Survey, the national average cost for a nursing home ranges between $7,900 and $9,000 per month. Private rooms cost about $1,000 more per month than semi-private rooms.
Depending where you live, the price might be considerably above or below the average. For instance, in Long Island, New York, you can expect to pay about $460 per day for a nursing home. That’s about $13,800 per month and nearly twice the cost of nursing homes in Texas. In Alaska, a nursing home private room can cost as much as $31,500 per month.
The chart below compares the 2021 monthly average costs of nursing homes in different parts of the country:
| State | Nursing home semi-private room cost | Nursing home private room cost |
|---|---|---|
| National Average | $7,908 | $9,034 |
| New York | $12,471 | $13,231 |
| Texas | $5,125 | $7,092 |
| Iowa | $6,874 | $7,452 |
| California | $9,794 | $12,167 |
Nursing home rates have increased significantly in recent years, owing to COVID-19-related healthcare costs and labor shortages, as well as the growing number of people requiring long-term care services.
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What factors determine the cost of a nursing home?
The costs of living in a nursing home can vary significantly between facilities even when they are in the same state. The rates differ depending on factors like:
Your health status and the type of care you need: Someone who needs more intensive medical care or additional services, like rehabilitation, may pay more.
Type of room: A shared room is more affordable than a private room.
Length of stay: You may pay less out of pocket for short-term care than for long-term custodial care.
Staffing level: Because of the current nursing shortage, people who require skilled nursing care may have to pay higher fees.
Facility size: Larger facilities may offer more amenities and services. They also tend to have higher operational costs and are likely to charge more.
Vacancies: A nursing home with unoccupied rooms may offer move-in specials or a lower rate than one that’s near capacity.
Quality of care: Fees may be higher if you stay at a Medicare-certified facility with a good overall rating. You can research high-quality facilities and compare prices.
What is included in the cost of nursing homes?
Federal requirements state that a nursing home must provide at least the following:
Nursing services such as assisting with ADLs, medication administration, and wound care
Rehabilitative services like physical therapy
Medical-related social services
Pharmacy services
Dietary services
Activity programs
Room and bed maintenance services
Routine personal hygiene items and services
In some cases, facilities may charge additional fees for services like:
Health assessments
State assessments
Transportation
Special medical supplies or special care
Telephone, television, radio
Specially prepared food
Social events not included in the basic activity program
How do I pay for nursing home care?
Nursing home costs can present a significant financial burden. But there are several ways to pay for these expenses, including:
Personal funds: Nursing home costs can be paid with private funds such as personal savings or proceeds from selling your home. Using money from a retirement account is also an option, but you may have to pay taxes on withdrawals. Out-of-pocket nursing home costs may be tax deductible if they are related to medical care.
Medicare: It’s important to note that Medicare doesn’t pay for long-term nursing home care. However, Medicare Part A may cover certain skilled care services in an SNF for up to 100 days per benefit period. You must meet certain conditions, and the stay must be medically necessary.
Medicaid: If you don’t have enough private funds, you may be eligible for long-term nursing home care through Medicaid if you meet your state’s requirements. These generally include having limited income, few financial assets, and meeting certain level-of-care conditions.
Even if you’re not eligible for Medicaid when you first move into a nursing home, you may eventually qualify if you spend down or use up all your personal resources. It’s a good idea to find out if the nursing home you choose will accept Medicaid in case you’re eligible for Medicaid coverage later.Long-term care insurance: Most health insurances don’t pay for nursing home custodial care. But long-term care insurance is a good way to help offset these costs. The key is to have a policy in place before you actually need to be in a nursing home. Do your research and find out what’s covered before you buy.
Medigap and Medicare Advantage plans: Most Medigap plans will cover an SNF stay if Medicare covers it. Medigap plans generally do not cover long-term custodial care. Some Medicare Advantage plans may provide limited coverage for long-term care in a nursing home. Review your plan’s rules to find out if it covers nursing home care.
Other options: You can look into a reverse mortgage or life settlement to see if these options make sense for you. You can also contact charitable organizations for assistance.
Paying for nursing home care can be complex. Some private financing options can affect your taxes and any inheritance you want to leave to your heirs. Explore your options with a trusted financial expert for guidance and to avoid penalties.
How long does the average person stay in a nursing home?
According to the CDC, the average length of stay among all nursing home residents in 2018 was about 490 days, or roughly 16 months. Still, about 1 out of 5 nursing home residents stay there for almost 5 years. While the length of stay varies greatly, more than half of the people in nursing homes are there for long-term care.
How do I determine when a long-term care facility is the best solution for me or a loved one?
Moving a loved one to a nursing home can be a difficult decision. However, it may be the best solution if your loved one is having trouble with ADLs such as:
Bathing
Eating
Dressing
Walking
You may also consider a long-term care facility if your loved one has problems performing certain tasks that are important for independent living, including:
Preparing meals
Cleaning and maintaining their house
Taking medications
Doing the laundry
Managing their finances
Also, ask yourself the following questions about the need for placement in a long-term care facility:
Is my loved one experiencing frequent falls?
Does my loved one have a medical condition that requires extensive care?
Is my loved one forgetful or wandering?
Am I burned out as a caregiver?
The bottom line
Nursing homes can be expensive — especially since Medicare does not pay for long-term nursing home care. You may have to pay many of the costs out of pocket if you don’t have long-term care insurance, Medicaid, or a qualified Medicare Advantage plan that can offset the costs.
Talk to a trusted financial advisor, plan ahead, and don’t be shy about negotiating for a discounted rate, especially if using private funds.
Why trust our experts?
References
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HealthyAging.org. (2020). Nursing homes.
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Investor.gov. (2011). Life settlements.
Karon, S. L., et al. (2014). What factors affect residential care facility charges? Office of the Assistant Secretary for Planning and Evaluation.
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Medicare.gov. (n.d.). Long-term care.
Medicare.gov. (n.d.). Nursing home care.
Medicare.gov. (n.d.). Skilled nursing facility (SNF) care.
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New York State. (n.d.). Estimated average New York State nursing home rates.
U. S. Department of Health & Human Services. (2020). What is long-term care?
U. S. Department of Health & Human Services. (2022). Post-acute and long-term care providers and services users in the United States, 2017-2018. Vital and Health Statistics.
