Nursing Home Costs and Payment Options

Key Takeaways

• Because they provide a high level of care, nursing homes cost more than other types of residential care for older adults, like assisted living or independent living communities.
• Nursing home costs vary based on a variety of factors, including your geographic location, the length of your stay, and whether you choose a shared or private room.
• Nursing home residents pay with a variety of methods, including personal savings, long-term care insurance, and government assistance programs, like Medicaid or Veterans benefits, if they qualify.

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Before you make a decision about whether a nursing home is right for you or someone you care for, it’s important to understand the overall costs of nursing homes and how they compare to the costs of in-home care and other senior living communities. As is the case with assisted living communities, the cost of nursing homes will vary based on several factors, including geographic location and the size of your living space.

The Local Care Reviews Team created this clear, comprehensive guide to the costs associated with nursing home care, including how to pay and what is covered by your monthly fees. We want you to feel more informed about how to afford housing and long-term care as you age.

Why you can trust our expert review

Our Local Care Reviews Team works hard to provide clear, transparent information to older adults and their caregivers seeking senior living and home care. To provide you with the best possible information, we have spent more than 1,000 hours:

• Consulting with our advisory board, which consists of a certified care manager, a board-certified geropyschologist, and a geriatric nurse practitioner
• Analyzing and synthesizing state-specific data from government health regulatory agencies
• Surveying 1,000 older adults and their caregivers about their search for senior living and home care options
• Conducting a focus group with caregivers working to help older adults find local care
• Mystery shopping dozens of brands and communities associated with long-term care for older adults
• Analyzing and synthesizing nationwide data from the Centers for Medicare & Medicaid Services, the National Institute on Aging, and Genworth.

What is the cost of nursing home care?

According to the Genworth 2021 Cost of Care Survey, the monthly median cost of nursing home care in the United States is $7,908 for a shared room and $9,034 for a private room. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html Older adults and their families should know the following about nursing home care:

• Nursing homes cost more than other senior living options, but there is also more government assistance available for nursing home care than other types of residential care for older adults.
• How much you spend on nursing home care over the course of a lifetime will depend on whether you need short-term or long-term skilled nursing care. Nursing homes provide both.
• The cost of nursing home care will vary depending on where you live, how you’re paying, and the size of your living space.

Monthly nursing home costs and what they cover

The cost of assisted living varies based on the level of care you need. Typically, the more assistance required, the more expensive the monthly bill. But in nursing homes, the monthly fee covers all or most medical and personal care services, including assistance with activities of daily livingⓘ Activities of daily living, also called ADLs, are activities related to necessary personal care. These include bathing, dressing, toileting, eating, walking, and transferring in and out of a bed or chair. (ADLs), such as dressing, bathing, and eating.

Nursing home services will vary based on the definition of Nursing Home Level of Careⓘ Also called a Nursing Facility Level of Care (NFLOC), NHLOC establishes the care criteria required for nursing home admissions under Medicaid. The definition of NHLOC varies by state, but almost always takes into account one or more of the following: (NHLOC) in the state where the nursing home is located. Federal guidelines for services provided in nursing homes offer some insight into the care typically provided in nursing homes across the country. ^[2]Medicaid.gov. Nursing Facilities. Found on the internet at https://www.medicaid.gov/medicaid/long-term-services-supports/institutional-long-term-care/nursing-facilities/index.html

According to these federal guidelines, nursing homes must provide the following services to residents:

• Skilled nursing and related services, including wound care, injections, and diabetes management
• Rehabilitation services to support and maintain the physical and mental health of residents
• Medically related social services, such as coordinating care plans
• Pharmaceutical services
• Customized dietary services
• Social activities to support the psychosocial needs of residents
• Regular and emergency dental services
• Routine personal hygiene items and services
• Assistance with ADLs, such as bathing and transferring to bed or a wheelchair, when residents cannot perform these tasks on their own

The frequency with which the nursing home provides these services may differ based on the length of a resident’s stay. For example, a short-term nursing home resident may receive rehabilitative services a few times each week, while a long-term resident may only receive these services a few times each month.

Services and amenities like private rooms, television, and telephone may be available at nursing homes, but these items and services will often need to be paid out-of-pocket by the resident or the resident’s family.

4 factors influencing nursing home costs

For planning purposes, it’s helpful to know the nationwide median monthly cost of nursing homes. However, the cost of nursing home care will vary depending on several factors, including your geographic location, the size of your living space, the length of your stay, and your method of payment.

Geographic location

Where you live in the United States will influence how much you pay for nursing home care. According to Genworth data, median monthly nursing home costs are typically higher in the northeastern United States than in the southeastern United States. For example, in Maine, the median monthly cost of a shared room in a nursing home is $10,494; in Georgia, it’s $7,011. Costs also vary within states. In Maine, nursing home costs in Portland start at $11,315; in Lewiston, they start at $9,885. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html

Table 1 Median monthly cost of nursing homes by state and selected cities, as of 2021

Source: Genworth 2021 Cost of Care Survey. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html These figures indicate the cost of a semi-private room. In some cases, data is only available for one metro area per state. *The District of Columbia is added to Delaware and Maryland for cost comparison to nearby metro areas.

Size of the living space

Another factor influencing the cost of a nursing home is the size and privacy of your living space. In most cases, a semi-private, or shared, room is more affordable than a private room. The median monthly difference between the cost of a shared room and the cost of a private room in the United States is more than $1,000, according to Genworth. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html

Medicaid-eligible older adults relying on Medicaid for all or part of their nursing home care will typically only have the option of a shared room. But in some instances, such as in an under-capacity nursing home, a resident paying with Medicaid could have a private room.

Length of stay

The amount an older adult pays for nursing home care depends on whether they need short-term rehabilitative care or long-term residential care. While the median monthly cost is the same for each, insurance covers long-term and short-term nursing home care differently. For example, many older adults use Medicare for short-term stays in a skilled nursing community, as Medicare will help to cover up to 100 days of skilled nursing care following a qualifying inpatient hospital stay. But Medicare won’t cover any form of long-term care. After those initial 100 days, the cost of a nursing home must be paid out-of-pocket or by Medicaid, for Medicaid-eligible older adults.

Method of payment

While Medicaid is the primary payer for all nursing home residents, ^[3]Medicaid and CHIP Payment and Access Commission. Principles for Assessing Medicaid Nursing Facility Payment Policies. Found on the internet at https://www.macpac.gov/wp-content/uploads/2023/03/Chapter-2-Principles-for-Assessing-Medicaid-Nursing-Facility-Payment-Policies.pdf not all nursing homes accept Medicaid payments. Sometimes, this is due to the Medicaid reimbursement being lower than the actual cost of care for the older adult. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) estimated Medicaid rates to be at least 25% to 33% lower than private pay rates. ^[4]U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Cost-Effectiveness of Home and Community-Based Long-Term Care Services. Found on the internet at https://aspe.hhs.gov/reports/cost-effectiveness-home-community-based-long-term-care-services-0 Sometimes, the limited income of a Medicaid-eligible older adult will help to cover the difference between the cost of care and the amount paid by Medicaid. In other cases, the nursing home must cover the difference.

If you or someone you care for is a Medicaid-eligible older adult in need of nursing home care, visit Medicare’s provider page to locate a nursing home near you. To find out whether the nursing home accepts Medicaid, click on the name of the nursing home and then scroll down to the Details section. There you’ll find more information about each facility, including their resident capacity and whether they accept Medicaid.

Weighing the benefits vs. the cost of nursing home care

Nursing homes offer the highest level of care provided outside of a hospital. Older adults sometimes transition to nursing home care when their medical needs can no longer be met at home or in an assisted living community. But it’s important to weigh the cost of nursing home care against its potential benefits.

Benefits of living in a nursing home

One of the primary benefits of a nursing home is the availability of 24/7 skilled care. While older adults can receive skilled nursing care at home, those services are only available when a registered nurse (RN) is visiting the home. In a nursing home, an RN is available 24 hours a day to provide skilled services, such as wound and catheter care. A nurse may not be at your side the moment you need them in a nursing home, but there are federal guidelines ^[5]Medicare.gov. Staffing for Nursing Homes. Found on the internet at https://www.medicare.gov/care-compare/resources/nursing-home/staffing to ensure a registered nurse (RN) or a licensed professional nurse (LPN) is on-site and available to residents at all times.

Other potential benefits of nursing home care include a nutritious diet, assistance with activities of daily living, and access to on-site social activities.

Nursing home costs compared to other senior care costs

Because they provide the highest level of care, nursing homes are the most expensive form of residential care for older adults. But older adults with limited incomes are also more likely to receive government assistance for nursing homes than for other forms of residential care.

Nursing home costs vs. assisted living costs

Genworth reported the median monthly cost of assisted living communities to be $4,500. This number is considerably less than the median monthly cost of a nursing home, which is $7,908 for a shared room and $9,034 for a private room. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html But unlike a nursing home, assisted living facilities often charge extra for services such as medication administration and help with ADLs, and those additional fees can increase the monthly bill by hundreds or even thousands of dollars per month. In a nursing home, all medical and personal care services are included in the monthly fee, with the exception of care requiring hospitalization.

Nursing home costs vs. the cost of in-home care

At a median monthly cost of $5,148, according to Genworth, full-time in-home care provided by a home health aide is more affordable than residential nursing home care. ^[1]Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html But when considering the full cost of in-home care, it’s important to factor in the cost of your mortgage and other home-related expenses. Also, if a family member quits a job or takes time off work to provide care in the home, you need to include lost wages into the overall cost of in-home care.

How to pay for nursing home care

If you’re considering a nursing home for yourself or someone you care for, it’s important to know how you will pay. Discuss options with family, friends, and, if possible, a trusted financial advisor or elder law attorney. Nursing home care is considered a deductible medical expense in certain instances, according to the Internal Revenue Service. ^[6]Internal Revenue Service. Medical, Nursing Home, Special Care Expenses. Found on the internet at https://www.irs.gov/faqs/itemized-deductions-standard-deduction/medical-nursing-home-special-care-expenses/medical-nursing-home-special-care-expenses

Private pay

Because of the high cost of nursing home care, most people are not able to pay out-of-pocket. People use a variety of private pay methods to help cover the costs of nursing home care.

Personal Savings

Personal savings used to cover nursing home care may include Social Security benefits, 401(k) or IRA accounts, pension payments, or stocks.

Long-term care insurance

If you have a long-term care insurance policy, you can be reimbursed for the cost of long-term care in a nursing home. But it’s essential to know the details of your policy, as some have an elimination period during which the policyholder has to pay out-of-pocket for services, and many policies do not cover the full cost of monthly care.

Home equity

Some people use proceeds from the sale of a home to pay for nursing home care. A reverse mortgage can also help to pay for nursing home care, but beware of scammers targeting older homeowners. ^[7]Consumer Financial Protection Bureau. Avoid Reverse Mortgage Shopping Scams. Found on the internet at https://www.consumerfinance.gov/about-us/blog/avoid-reverse-mortgage-shopping-scams/ Always consult with a trusted financial advisor before making this kind of decision.

Life insurance benefits and conversions

Obtained through life settlements or accelerated death benefits, life insurance benefits and conversions can sometimes help cover nursing home costs. ^[8]LongTermCare.gov. Using Life Insurance to Pay for Long-term Care. Found on the internet at https://acl.gov/ltc/costs-and-who-pays/who-pays-long-term-care/using-life-insurance-to-pay-for-long-term-care In a life settlement, women 74 and older and men 70 and older can trade their policy for the cash value of the policy’s death benefit. In most cases, people do not receive the benefit’s full cash value. Accelerated death benefits, which are tax-free advances on a policy’s death benefit, are typically capped at 50% of the policy’s full benefit.

Government assistance for nursing home care

Government assistance offers more payment support for nursing homes than for other forms of residential care for older adults. Here are the types of government assistance you may be eligible for:

Veterans benefits

United States military veterans and their spouses can receive a variety of long-term care services, either at home or in a residential care facility, such as a nursing home or assisted living community.

In some cases, veterans can receive skilled nursing care in residential communities specifically for veterans. ^[9]U.S. Department of Veterans Affairs. Geriatrics and Extended Care: Residential Settings and Nursing Homes. Found on the internet at https://www.va.gov/GERIATRICS/pages/Nursing_Home_and_Residential_Services.asp?utm_source=geriatrics_home_page These may be called community living centers, community nursing homes, or state veterans homes. To find out more about nursing home care for veterans near you, get in touch with a VA social worker in your area.

Medicare

While Medicare will not cover any form of long-term care, it will cover a variety of goods and services used by nursing home residents. Goods and services covered in part or in full by Medicare include: physician-ordered physical therapy, occupational therapy, and speech therapy; some outpatient health services, such as visits to a geriatrician; some prescription drugs; and durable medical equipment.

Medicare will also cover up to 100 days in a Medicare-certified skilled nursing home following a qualifying inpatient hospital stay. ^[10]Medicare.gov. Skilled Nursing Facility (SNF) care. Found on the internet at https://www.medicare.gov/coverage/skilled-nursing-facility-snf-care For skilled nursing care to be covered by Medicare, your doctor must indicate your need for daily skilled care for a hospital-related medical condition, such as a pressure ulcer or surgical site infection, or a condition that started while you were getting care in a skilled nursing facility for a hospital-related medical condition. ^[11]Centers for Medicare & Medicaid Services. Hospital-Acquired Conditions. Found on the internet at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospital-aquired-conditions-hac/hospital-aquired-conditions

Medicare will cover 100% of only the first 20 days in a skilled nursing community. During days 21-100, a patient can be charged up to $200 per day. After day 100, the patient is responsible for 100% of their costs. ^[10]Medicare.gov. Skilled Nursing Facility (SNF) care. Found on the internet at https://www.medicare.gov/coverage/skilled-nursing-facility-snf-care

Medicaid

In most cases, Medicaid will pay the full cost of nursing home care for Medicaid-eligible older adults. Eligibility for Medicaid, including income limits and other qualifying factors, varies widely by state. Typically, the income limit for Medicaid eligibility is higher for medically needy older adults. If you think you might qualify for Medicaid, contact your state’s Medicaid office to determine your eligibility and start the application process.

If a Medicaid-eligible older adult qualifies for nursing home care but prefers to receive care in their own homes or the home of a family member, they can apply for one of Medicaid’s state-based Home & Community-Based Services (HCBS) Services Waivers. ^[12]Medicaid.gov. Home & Community-Based Services 1915(c). Found on the internet at https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915c/index.html Individual states tailor these waivers to meet the needs of older adults in their state, sometimes allowing them to hire and pay family members to provide in-home care. While not all states offer HCBS Waivers, there are more than 250 HCBS Waiver programs across the country.

To learn what programs you may qualify for, use BenefitsCheckUp®.

Bottom line: Nursing home costs and what to expect

Because nursing homes offer a high level of care, these communities cost more than other forms of residential care for older adults. Several factors influence the cost of nursing homes in the United States, including geographic location, length of stay, and whether it’s a private or shared room.

While there are private pay options for nursing homes, including personal savings and long-term care insurance, the majority of nursing home care is paid for by Medicaid to provide skilled nursing care for Medicaid-eligible older adults. Medicare can help to pay for some goods and services received in a nursing home setting, but it will not pay for any form of long-term care.

Before making a decision about what kind of care is best for you or someone you care for, know your options and, if possible, plan ahead. The earlier you start planning for the possibility of long-term care, the more options you will have.

Have questions about this article? Email us at reviewsteam@ncoa.org.

Sources

1. Genworth. 2023 Cost of Care Survey. https://www.genworth.com/aging-and-you/finances/cost-of-care.html
2. Medicaid.gov. Nursing Facilities. Found on the internet at https://www.medicaid.gov/medicaid/long-term-services-supports/institutional-long-term-care/nursing-facilities/index.html
3. Medicaid and CHIP Payment and Access Commission. Principles for Assessing Medicaid Nursing Facility Payment Policies. Found on the internet at https://www.macpac.gov/wp-content/uploads/2023/03/Chapter-2-Principles-for-Assessing-Medicaid-Nursing-Facility-Payment-Policies.pdf
4. U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Cost-Effectiveness of Home and Community-Based Long-Term Care Services. Found on the internet at https://aspe.hhs.gov/reports/cost-effectiveness-home-community-based-long-term-care-services-0
5. Medicare.gov. Staffing for Nursing Homes. Found on the internet at https://www.medicare.gov/care-compare/resources/nursing-home/staffing
6. Internal Revenue Service. Medical, Nursing Home, Special Care Expenses. Found on the internet at https://www.irs.gov/faqs/itemized-deductions-standard-deduction/medical-nursing-home-special-care-expenses/medical-nursing-home-special-care-expenses
7. Consumer Financial Protection Bureau. Avoid Reverse Mortgage Shopping Scams. Found on the internet at https://www.consumerfinance.gov/about-us/blog/avoid-reverse-mortgage-shopping-scams/
8. LongTermCare.gov. Using Life Insurance to Pay for Long-term Care. Found on the internet at https://acl.gov/ltc/costs-and-who-pays/who-pays-long-term-care/using-life-insurance-to-pay-for-long-term-care
9. U.S. Department of Veterans Affairs. Geriatrics and Extended Care: Residential Settings and Nursing Homes. Found on the internet at https://www.va.gov/GERIATRICS/pages/Nursing_Home_and_Residential_Services.asp?utm_source=geriatrics_home_page
10. Medicare.gov. Skilled Nursing Facility (SNF) care. Found on the internet at https://www.medicare.gov/coverage/skilled-nursing-facility-snf-care
11. Centers for Medicare & Medicaid Services. Hospital-Acquired Conditions. Found on the internet at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospital-aquired-conditions-hac/hospital-aquired-conditions
12. Medicaid.gov. Home & Community-Based Services 1915(c). Found on the internet at https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915c/index.html

Kate Van Dis Author

Kate Van Dis is a health writer in Chapel Hill, North Carolina. She has written for various audiences on health & wellness, education, and aging. Her current focus is on assisted living, home care, and other extra-care housing options for older adults.

Christopher Norman Medical Reviewer

Christopher Norman is a Board-Certified Geriatric Nurse Practitioner and Holistic Nurse. As a nurse’s aide, registered nurse and now nurse practitioner, he has loved working with older adults since 2004.

Kathleen Cameron Reviewer

Kathleen Cameron, BSPharm, MPH, has more than 25 years of experience in the health care field as a pharmacist, researcher, and program director focusing on falls prevention, geriatric pharmacotherapy, mental health, long-term services and supports, and caregiving. Cameron is Senior Director of the NCOA Center for Healthy Aging, where she provides subject matter expertise on health care programmatic and policy related issues and oversees the Modernizing Senior Center Resource Center.