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Is Assisted Living More Expensive Than A Nursing Home?

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Costs vary from state to state but on average, nursing homes are more expensive than assisted living facilities. In 2020, the average yearly cost of a private nursing home room was $100,375. A high end assisted living facility averaged $84,000 a year.

As you debate between a nursing home or assisted living for your senior, one major deciding factor is going to be the cost.

Which of these two options would be pricier?

Let’s compare the two:

Nursing Home Costs

According to Senior Living.org, in 2020, a semi-private nursing home room may cost $245 a day. That’s $7,441 a month and $89,297 a year.

If you wanted a private room for your senior to live at the nursing home, you may be looking at costs of $275 a day, $8,365 a month, and $100,375 a year.

The current trend of nursing home pricing is on an upward trajectory:

  • For a semi-private room in 2016, you would have spent $82,128 a year. That same year, private rooms cost $92,376 annually.
  • It’s believed that by 2028, the annual price of a semi-private nursing home room could be $120,008 and $134,896 for a private room.

These costs are averages (even for 2020). Depending on where in the United States you call home, you may pay less than the average or even more.

States such as Oklahoma and Texas are the cheapest, with semi-private rooms less than $5,000 a month and private rooms under $7,000 monthly.

There are also many states with semi-private nursing home costs that average around $6,000 to $7,000 a month, with private rooms between $5,500 and $7,500. These include Missouri, Arkansas, Illinois, Utah, Iowa, Alabama, Tennessee, and South Carolina.

The 10 most expensive states for nursing home care, according to Senior Living.org‘s most recent data, are:

  • West Virginia
  • New Hampshire
  • Delaware
  • New Jersey
  • North Dakota
  • New York
  • Massachusetts
  • Hawaii
  • Connecticut
  • Alaska

In any of these 10 states, semi-private rooms start at $10,200 and go up to $12,600, while private rooms are priced at $11,000 – but may cost as much as $13,700 a year. The only exception is Alaska, in which a semi-private room is $27,573 and a private room $29,291 a year.

How To Pay For Nursing Home Costs

Remember that if your senior has Medicaid or Medicare, it’s possible for this insurance to kick in on some or even all the costs of nursing home living.

Speaking of Medicaid coverage, Paying For Senior Care.com says, “Practically speaking, if one is seeking Medicaid assistance, they should not begin by taking their loved one to a doctor to obtain a Nursing Home Level of Care designation. Instead, they should start by contacting their state Medicaid office. The state will likely require that a specific group of doctors, therapists or administrators be used to make the determination, and it is unlikely that one’s primary care doctor is included in this group.”

You can find your state’s Medicaid Program contact information here.

Assisted Living Costs

Assisted living facilities are on a private payment model, so it’s a lot harder to get estimates compared to nursing homes.

But according to seniorhousingnews.com the “…national median cost for a one-bedroom unit in a private-pay assisted living community is now $4,300 per month…”

As with the nursing home costs above, the prices of assisted living do vary from state to state across the US. The prices are all over the board, so we randomly selected a handful of states to show you the discrepancies.

Included are daily, monthly, and annual costs.

  • Wyoming: $131 a day, $3,995 a month, and $47,940 a year
  • Texas: $116 a day, $3,515 a month, and $42,180 a year
  • Rhode Island: $162 a day, $4,931 a month, and $59,161 a year
  • Ohio: $118 a day, $3,600 a month, and $43,200 a year
  • New York: $136 a day, $4,136 a month, and $49,635 a year
  • Nevada: $100 a day, $3,050 a month, and $36,600 a year
  • Minnesota: $105 a day, $3,200 a month, and $38,400 a year
  • Louisiana: $104 a day, $3,155 a month, and $37,860 a year
  • Hawaii: $136 a day, $4,125 a month, and $49,500 a year
  • Illinois: $128 a day, $3,898 a month, and $46,770 a year
  • Florida: $100 a day, $3,045 a month, and $36,540 a year
  • Washington, DC: $220 a day, $6,700 a month, and $80,400 a year
  • California: $132 a day, $4,000 a month, and $48,000 a year
  • Alabama: $95 a day, $2,900 a month, and $34,800 a year

As you can see, where you live can impact your yearly expenses if you will be moving into an assisted living facility.

How To Pay For An Assisted Living Community

Here are 7 resources available that can help with the costs to live in an assisted living community.

Life Insurance

Your life insurance company may buy back your policy (at a reduced percentage of course) but it may be enough to cover a good portion of your assisted living costs.

You may also be able to convert your life insurance policy into a long-term care type of policy.

Check with your insurance agent to go over all the options that they may offer and what their requirements may be for you to be eligible.

Long Term Care Insurance

Long term care policies can greatly benefit you if you purchased them at a young age and if your policy specifically outlines payments for assisted living facilities.

If you are a senior and haven’t yet purchased a long term care insurance policy – generally speaking – it may be too late. The cost of this type of policy for a 65 year old would be about $7,000 per year.

Veteran’s Benefits

Although getting benefits from the Veteran’s Administration can be daunting (very time consuming and complicated) it may be worth it.

the VA covers residential care if…

  • the veteran has service related injuries / disabilities
  • the veteran’s income is below a certain amount

The details of what the VA will pay may change so we recommend that you contact your local Veteran’s Administration.

Annuities

If you invested in an annuity you are in luck. Your investment will come in handy as it can certainly help to pay for some (or maybe even all) of your monthly expenses in your assisted living facility.

In addition, the Pension Protection Act of 2006 allows you to use proceeds from certain annuities to pay the premiums for long term care insurance. These proceeds would be tax free.

But note that although the Pension Protection Act reads like a great idea – it’s not necessarily as good as it sounds!  Check out this article at ElderLawAnswers.com.

Reverse Mortgage

Another somewhat controversial plan are reverse mortgage programs which are basically a loan paid to the homeowner based on the equity of the home.

This money could go towards paying for an assisted living.

This would oftentimes come into play when one spouse remains in the home and the other moves into an assisted living facility.

We recommend that you contact your local medicaid program to find out what they will pay.

Family and Home

When all other avenues are exhausted – tapping into the collective group of friends and family to help pay for any time of long term care needed is a possible option.

Although we all understand that will not be the case for every family.

Does Medicare Pay For Assisted Living?

Like other health insurance plans, Medicare does not cover long-term care services. Therefore, Medicare does not pay for the cost of room and board or personal care in an assisted living facility.

agingcare.com

What Is The Difference Between A Nursing Home and Assisted Living?

Nursing homes are generally intended for seniors who need monitoring and/or medical care either 24/7 or most of the day. Whereas seniors in assisted living facilities are more independent and may only require occasional assistance (or none at all).

Read more details about their differences here.

Did We Answer Your Question About The Cost Difference Between Nursing Homes and Assisted Living Facilities?

There’s a lot of information to gather when you’re trying to make the best decision about choosing the right type of senior housing for yourself or senior loved ones.

We hope that we have provided you with some of that information.

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