Nursing Home Costs

As the growing population ages, the need for long-term care increases. Nursing homes are a popular option for those who need assistance with activities of daily living (ADLs) or have a cognitive impairment. These long-term care facilities provide skilled care and around-the-clock supervision, but they can also be expensive for long-term stays.

Read on to learn more about how much nursing homes generally cost and ways to cover the expense.

How much is a nursing home per month?

According to Genworth's Cost of Care Survey, the average cost of a semi-private room in a nursing home in the U.S. is $7,908 per month or $260 per day. The average cost of a private room is even higher at $9,034 per month or $297 per day.

Nursing home costs by state

The average cost of a nursing home varies considerably by state and zip code. According to MedicaidPlanningAssistance.org, a free service by the American Council on Aging, some of the lowest costs in the nation can be found in parts of Louisiana and Texas, where a room in a nursing home can cost around $180 per day. On the other hand, some of the highest costs can be found in parts of Alaska, where residents might pay over $1,000 per day.

The table below includes the average cost of nursing homes by state. While this information can give you a general idea of what you can expect to pay, remember that actual costs vary by area.

Source: MedicaidPlanningAssistance.org

Factors that affect the cost of nursing home care

Multiple factors affect the cost of nursing home care, from the facility's location to the level of care the resident requires. Let's go over them in detail.

Level of care required

Besides room and board and social enrichment, nursing home stays generally include medication monitoring, assistance with ADLs (things like toileting and personal hygiene), and round-the-clock emergency care. They may also be equipped to provide physical, speech and occupational therapy.

Prices vary by institution, however, and some charge depending on the type of service and level of care the resident requires. If your loved one needs specialized care that can only be provided by a medical professional or services beyond what the institution defines as basic care, you'll likely end up paying extra.

Type of facility

Nursing homes provide custodial care (the kind you might need if you require assistance with ADLs), but they also generally employ registered nurses and licensed health professionals with specialized training. This makes nursing homes more expensive than other senior living options.

Independent living complexes and assisted living facilities may cost less because they don’t provide extensive medical care. Residents are provided a safe place to live and interact with other seniors and some assistance with ADLs.

Amenities and services

Nursing homes offer different amenities and services. As illustrated in the table with nursing costs by state, single rooms are more expensive than shared rooms. Some facilities also charge more for private balconies, private transportation or concierge services.

Geographic location

Again, location has a bearing on nursing home rates. Facilities in larger metropolitan areas tend to cost more than those in rural areas because of the higher costs of living. Similarly, nursing homes in areas with fewer facilities and greater demand tend to be much more expensive (as is the case in areas of Alaska).

Other factors that can affect what a nursing home may charge you include the cost of labor in your state and, if you qualify for long-term care benefits under Medicaid, how much Medicaid will pay toward your nursing home stay.

Breaking down nursing costs

Nursing home expenses include a few specific types of fees and costs. Some are fixed, while others fluctuate depending on care and lifestyle choices.

Entrance and assessment fees

Some facilities may charge an entrance fee, which will depend on the level of care the resident requires at the time they enter the institution and the cost of the accommodations they select. Other facilities require a health assessment fee to cover the cost of health evaluation by a nurse.

Not all nursing homes charge these fees, however, and you should be provided with a schedule of rates that breaks down everything included in the monthly cost.

Room and board

Room and board charges typically make up the largest portion of monthly nursing home costs. You'll pay more or less depending on the type of room, whether private or semi-private, and the amenities you select.

Generally, room and board fees also include additional services such as housekeeping, laundry, meal preparation, social and recreational activities, 24/7 nursing care and even religious services. Items such as medical supplies, medications, transportation and physical, speech and occupational therapy generally cost extra.

Medical expenses

Some medical expenses may be included in your assisted living costs if they are a part of routine care. Your nursing home may include charges for skilled nursing and basic medical needs such as administering medication or creating a specialized diet plan.

Ancillary costs (medications, therapies, etc.)

On top of your basic medical needs, you can also work with the nursing home to create more in-depth treatment plans. Ancillary costs may include ambulances, behavioral health services, cardiac monitoring, dialysis, hospice care, diagnostic testing, private-duty nursing and more. These costs will depend on your care requirements and preferences.

How much does it cost to stay in a veterans nursing home?

Veterans nursing homes are partly subsidized by the U.S. Department of Veterans Affairs (VA) and state-run veterans departments. These facilities provide nursing care for military veterans and, in some cases, former reservists, National Guard members and military spouses.

The cost of veterans nursing homes is generally lower than that of private institutions. This is because the VA pays a fixed per diem amount for each resident. In 2020, the VA paid these facilities $112.36 per resident per day. However, the amount may not cover the full cost of care in these nursing homes.

Some VA nursing homes cover their monthly expenses using this per diem rate plus Pension benefits from eligible veterans, any available subsidies, and insurance. Despite that, these facilities aren't completely free to veterans, which means either veterans or their families must cover a percentage or the cost.

As with other types of facilities, the average daily cost of care in a VA nursing home can vary widely by location and may depend on available government assistance programs.

How to pay for nursing home care

Long-term care costs can become overwhelming very fast. Having multiple sources to help cover these expenses can help.

Long-term care insurance

Long-term care insurance covers a host of long-term care services, including skilled nursing, custodial care and hospice care. It also helps pay for care in various settings, including at home or at residential facilities such as nursing homes, assisted living communities and adult daycares.

While most policies reimburse you for your actual costs of care, some of the best long-term care insurance policies pay out a fixed weekly or monthly amount regardless of your long-term care costs. With the latter, if your expenses are below the benefit amount, you can use the difference however you please.

Something to keep in mind about long-term care policies is that there are several options out there. Stand-alone or traditional policies may be more affordable initially but premiums can increase over time. Hybrid life and long-term care insurance policies, on the other hand, are generally more expensive but feature level premiums and a guaranteed death benefit for the policy's beneficiaries.

Regardless of which type of long-term care insurance policy you choose, shop for coverage sooner rather than later. You may find it harder to qualify for a policy later in life, and your premiums will reflect the risk you pose to the insurance company. The American Association for Long-term Care Insurance (AALTCI) suggests purchasing coverage in your mid-50s or early 60s to improve your odds of qualifying and secure lower rates.

Government programs

Original Medicare won't cover a stay in a long-term care facility, but it can pay for short-term, medically necessary skilled nursing in a facility or at home after an illness or injury. In rare cases, Medicare Advantage or Part C plans can cover some nursing home expenses, but only if the nursing home has a contract with the plan.

Medicaid, on the other hand, is the primary payer of long-term care services in the U.S. This program can cover both custodial and skilled care for those who qualify. Nevertheless, you need to meet the income requirements set by your state's Medicaid program, and the thresholds for how much income and assets you can have are generally very low.

While some nursing homes don't accept Medicaid, most do. Even if you have private insurance or enough saved up to cover ongoing care, making sure the nursing home you select accepts Medicaid can help you if you ever spend down your savings enough to qualify for government assistance.

Private health insurance

Like Medicare, private health insurance may only cover short-term skilled nursing care if it's medically necessary after an illness or accident. While this won't be enough to cover ongoing care or any custodial services, it can help in a pinch.

Veterans’ benefits

The VA offers long-term care assistance for sick or disabled veterans. Long-term care may include round-the-clock medical care and nursing, physical therapy, comfort care, pain management and assistance for caregivers. Veterans may be covered whether they choose to stay in a nursing home, assisted living facility, adult daycare center or their own home.

Veterans must be signed up for VA health care benefits to qualify for long-term care assistance, and care services must be available near them. The VA must also determine whether they require particular long-term care services for their ongoing treatment.

It's also important to note that the VA doesn't cover all long-term care services, and participants may have to pay a portion of the cost of services covered under the plan. Services not covered by the VA may be covered by Medicare or Medicaid, however.

Retirement plans and savings

If you've exhausted other options, consider tapping into your savings or investments. If you have a retirement plan like a traditional or Roth IRA, you can withdraw from the plan without additional tax penalties once you turn 59½. 401k accounts may have additional requirements, but you're generally able to take distributions at that age as well.

For additional options, read our article on alternatives to long-term care insurance.

Summary of Money’s nursing home costs

The average cost of a nursing home facility in the U.S. is between $7,908 and $9,034 per month or $260 and $ 297 per day. However, actual costs will vary depending on your location, the level of care you require and the type of room and amenities you select.

While nursing home costs can be expensive, several options can help you cover them. Medicaid, the public health insurance program for low-income families and individuals, is the primary payer of long-term care services in the U.S. If you don't qualify for Medicaid, however, long-term care insurance can be your next best bet.

Medicare and private health insurance don't generally cover long-term care costs but may help you cover short-term skilled nursing care as you recover from an illness or accident. Lastly, if you served in the military, the VA may also cover a host of long-term care services in a variety of settings.

Of course, you can also tap into your retirement savings, assets or investments to cover long-term care costs. However, having one of the insurance options listed above could help you stretch your dollar further.