Cost of Home Care Vs. Nursing Homes

Happy old woman in a nursing home

The cost of senior care can be a daunting topic for those seeking a long-term care situation for a senior. One of the biggest questions is whether in-home care or nursing homes are more affordable and which is the right option for your or your loved one. 

This article will break down the factors that affect the cost of home care versus nursing homes. 

Key Takeaways

  • Nursing homes are best for 24/7 care and typically cost between $6,800 and $7,800 per month
  • In-home care is best when only moderate care is necessary and costs an average of $4,290 per month
  • The level of care needed is the largest factor in determining the cost of senior care
  • Long-term care insurance is a great way to prepare for the cost of senior care

Average Cost of Home Care Vs. Nursing Homes

The national average cost of 44 hours per week of home care for seniors is $4,290 per month, more than $50,000 a year. On the other hand, the national average cost of a nursing home is between $6,800 and $7,800. 

What Impacts the Cost of Care?

The most expensive option is not always the best care, and the cheapest type of care is not always the worst. Consider the factors explained below when evaluating the cost of the care you want.

Location of Care

Where you live or where you seek senior care will have a massive impact on the cost. The price of a home in New York City will likely always be more than a home in a small town in the middle of Utah. When considering the average cost of senior care, factor in where you live and the general cost of living in your area. 

The following states have the highest cost for long-term custodial care:

  • New Jersey
  • New Hampshire
  • Alaska
  • Massachusetts
  • Washington DC

Most of these states are known for their high cost of living and have a high demand for senior care.

On the other hand, all of these states have the lowest long-term senior care rates in the country:

  • Georgia 
  • North Dakota
  • Missouri 
  • Nevada
  • South Dakota 

These states have a low cost of living, but also a low minimum wage. 

Another way that your location can impact the cost is if the state you reside in has laws limiting the cost of senior care. Depending on the Medicaid programs available, some states set a cap on how much a person must pay for senior care before the government steps in and helps. 

Level of Care

The level of care the individual needs is the largest factor in determining the cost. Some individuals need help for a few hours a day to make meals or to help with some specific activities of daily living or custodial care such as personal hygiene. But others may need around-the-clock care because they have a severe illness or condition. 

Also, home care costs can drop significantly if a family member can pick up some of the care duties, reducing some of the need for the home health aide. Home health care is more customizable when it comes to the level of care. So you can have a professional come in for senior care for half days or just a few times a week, depending on the needs of the senior. 

Of course, nursing home care will always be 24 hours a day, as care professionals will always be present on the premises if a patient needs emergency assistance. But even in a nursing home, the level of care an individual needs can vary. If they need consistent monitoring or regular medications, the cost of care may increase because they require more attention. 

Additional services such as physical therapy, memory care, or grooming beyond the standard level are often optional but will cost more money. Some nursing homes also have different levels of rooms, so you can opt for a basic package or upgrade to something more premium for increased comfort. 

Which One Is The Right For You?

Even with all of the information on nursing home versus home care costs, it can still be difficult to make the right decision. This section explores why people opt for one type of care over the other, and why you may want to do so. 

Both nursing homes and in-home care have their own benefits, as well as their downsides.

When Nursing Home Care Is a Better Fit

Nursing homes may have historically gotten a bad reputation as melancholy places, but overall the industry is improving as more boomers start looking toward senior care, and they are sometimes the best option. Consider the situations below that make a nursing home or assisted-care facility the best option for you or your loved one. 

24/7 Care

Nursing homes are typically the best option when 24/7 care and attention are necessary, or when older adults anticipate needing 24/7 care in the future. Similarly, nursing homes can be the best choice if you anticipate needing frequent medical care from health care professionals. 

Around the clock care at home can cost up to $10,000 every month, making it the most expensive care option. But nursing homes can offer 24/7 care at a more affordable rate because they have multiple staff rotating shifts and caring for many seniors at once. It is worth noting that most nursing homes will provide different levels of care, allowing seniors to graduate into more intensive 24/7 care even if they start at a lower level of care.

Specific Services

If the senior requires certain services like physical therapy, memory therapy for those with Alzheimer’s disease, or hygiene help, a specialized nursing home is the better option as some have specialized memory care wing. 

Socialization

Many nursing homes offer group activities like bingo, dancing, and more. If a senior prefers a social environment, a nursing home can be a wonderful place for them to make friends and interact with people around their age. 

As people age, they often lose friends and family closest to them, and it can become quite lonely. Moving into a nursing home can alleviate this loneliness and offer a more positive, and social environment. 

Unsafe Home Environment

There are many situations where the senior’s home is not suitable for their condition. Some examples include a wheelchair-bound senior whose home does not have ramps, has many stairs, or even just a large home that is too much for them to navigate throughout the day. While this is very sad, it is sometimes an unavoidable fact. 

When Home Care Is a Better Fit

Some situations point toward in-home senior care being the right choice. If one or more of the below scenarios apply to your situation, it may be best to opt for home care. 

Moderate Care

If you or your beloved senior do not require 24/7 care, but instead, only need a limited amount of care and help, home care is the best option. Home care is more customizable, so you can schedule the care professional to come as much or as little as you want. Home care can save money if the senior is relatively independent. 

Companionship

While a nursing home offers a chance to make many acquaintances and friends, it may be too overwhelming for some. If the senior does not wish to be around people, a home care professional can still act as a companion to reduce loneliness. And despite being surrounded by others in a nursing home, it can often feel impersonal and make seniors feel alone anyway. 

Home Attachment

Many people worked their entire life to make a good home for themselves and pay off their mortgage. It can be emotionally detrimental if you have to leave the home you love so much. If you or a loved one want to age in place rather than transition into a strange facility, leaving your home behind, home care is often the best option. Many senior citizens simply prefer to be in their own home and have a home caregiver help with daily activities and medical assistance.

Privacy

It can be demeaning to have to give up your privacy at any time as an adult. Many people cannot afford to have a private room in a nursing home, therefore, they have to share a room with someone, likely a stranger. Sharing a room also means being subjected to visitors, nurses, or doctors that aren’t there for you, interrupting your peace and imposing on your space. 

Paying For Senior Care

Paying out of pocket for senior care is often not an option, as the price of senior care can cost tens of thousands a year. Below are the best options for paying for senior care if you don’t have the funds on hand. 

Long-term Care Insurance

Long-term care insurance should be purchased well before the need for senior care arises. There are several different types of long-term care insurance policies, but most will provide benefits for a defined period of time (typically 1-5 years – long gone are the traditional life insurance plans that provide indefinite coverage) and specify either a per day or per month benefit amount. Long-term care insurance policies often fill in the gaps to cover what Medicaid and Medicare plans won’t pay for such as custodial care and long-term room and board. 

Once a person reaches the age of 65, they have a 70% chance of needing some assistance in their daily lives. Long-term care insurance is the best way to prepare for this almost-inevitable need, but the earlier you obtain one of the policies, the more affordable it will be.

Medicare

Medicare, for the most part, cannot cover long-term senior care. Medicare plans do not cover any ‘personal care’ which much senior care falls under, such as help with home chores, Alzheimer’s care, or anything related to adult daycare. 

If a senior spends time in a skilled nursing home recovering from surgery or an accident and receives skilled medical care, Medicare will cover this personal care when it is medically necessary for a limited period. Medicare will also cover in-home medical services such as the administration of drugs or some physical therapy. But personal care will not be covered under most Medicare advantage plans. 

Medicaid

Medicaid is one of the best options for senior care because it typically covers 100% of nursing home costs. The options for home care under Medicaid vary by state, but most offer coverage for in-home services. Qualifying for in-home care under Medicaid depends on the senior’s income, assets, and level of need.

Medicaid gets partial funding from the federal government and the rest from the state governments. But most states offer various Medicaid waivers for home care costs. 

Veteran Benefits

There are a few ways that Veteran Benefits can help pay for senior care. Veteran-Directed HCBS, Aid and Attendance, Housebound Benefit, or the VA Respite Care Program are all avenues for taking care of senior care costs. 

Some of these options offer monthly cash payments that can be used at the veteran’s discretion, others will pay for short-term in-home care, and some specifically provide personal care and medical services. Many of these Veteran Benefits allow the user some flexibility when choosing their type of senior care and desired caregivers. 

Conclusion

The level of care needed is the most important component in deciding which avenue to take for senior care. 

Those that need 24/7 attention and care will be more comfortable in a nursing home, and the cost will be lower than 24/7 home care. But for the elderly that only need moderate care, it will be more financially viable to seek in-home care options. 

It is never too soon to start considering the cost of senior care and preparing for the expense. Whether you purchase an insurance policy or seek help from the government, there are options to assist in paying for senior care, and being prepared for the price is crucial. 

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