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Assisted Living vs. Nursing Homes Costs: The Ultimate Guide
Written by Grace Styron
about the author
6 minute readLast updated May 27, 2023
Reviewed by Saul ChapnickAssisted Living Executive Saul Chapnick has extensive experience revitalizing distressed facilities and ensuring new ones start strong.
Despite what you may have heard, assisted living communities are not the same as nursing homes. These senior care types provide distinctly different levels of care at vastly different price points. To help make the best decision you can for your loved one, learn how these two care types differ, what elements may affect care costs, and how to know if a community is the right fit.
Key Takeaways
- The median cost of assisted living in 2021 was $4,500 per month. Assisted living is less expensive than a nursing home because it doesn’t provide extensive medical care.
- The median monthly cost of a nursing home ranged from $7,908 to $9,034 depending on room type. Private rooms are typically more expensive than shared rooms.
- Location, pricing model, care level, and types of services all affect the total cost. Learn what your parent’s needs and preferences are, and try to find a balance that fits their budget.
- There are a range of ways to offset some costs of assisted living and nursing home care. These include using insurance and government-funded health benefits to cover some expenses.
In this article
What’s the difference between an assisted living community and a nursing home?
The key difference between assisted living and nursing homes is that assisted living provides services and amenities that help keep seniors active and social, while nursing homes primarily provide round-the-clock medical and personal care for those with more serious health conditions. Assisted living is long-term housing designed for older adults who cannot live on their own due to a mental or physical disability but want to stay as active, social, and independent as possible. Assisted living communities typically offer apartment-style shared or private living spaces. Staff provide assistance with personal care, housekeeping and laundry services, dining services, medication management, and a range of social events and activities. Nursing homes are designed for seniors who require a greater level of care, such as full-time monitoring and medical assistance, but don’t necessarily need to be hospitalized. About half of nursing home residents are 85 or older, with very few being younger than 65.[01] Residents may be bedridden, require the use of a wheelchair, or have a severe physical or cognitive health condition.
Understanding nursing home vs. assisted living costs
Nursing homes are generally more expensive than assisted living communities because their residents require a higher level of care. In fact, nursing homes are the most expensive of all senior living types, followed by home health aide services, homemaker services, and assisted living facilities.[02] In 2021, the median cost of assisted living was $4,500 per month, and the median cost of a nursing home ranged from $7,908 per month for a semi-private room to $9,034 per month for a private room.[02] Nursing home and assisted living costs have historically increased every year, and that trend is expected to continue.[03] It’s important to factor this into decision-making when searching for senior living.
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Cost factors for assisted living and nursing homes
There are several aspects to consider that can make the cost of an assisted living community or a nursing home higher or lower. Keep the below factors in mind when researching care for your parent. For example, the median cost of assisted living facility care in 2021 ranged from $3,000 per month in Missouri to $6,978 per month in Washington, D.C. For a private room in a nursing home, the monthly median cost ranged from $5,931 in Missouri to upwards of $31,512 in Alaska.[03] Nursing homes don’t usually offer apartment-style living arrangements. Instead, accommodations are generally one room with a bed, bathroom, and seating area. Full kitchens or kitchenettes aren’t typically included because residents are unable to cook safely on their own. But, prices can still range depending on the size of the room. And, like in assisted living, most nursing homes will allow residents to share rooms to reduce their expenses. The average person stays in assisted living for about one year before transitioning to memory care or a nursing home because their care needs have increased.[04] A person also stays in a nursing home for an average of around one year. However, about 20% of people age 65 and older will need long-term care for five years or more.[05]
Geographic location
The costs of senior living go up in areas with a higher cost of living. So, the cost of any community, whether it’s assisted living or a nursing home, will vary from state to state and city to city.Level of care
Your loved one’s care level depends on their current overall health status and ability to perform their activities of daily living (ADLs), among other things. As your loved one’s health declines, the cost of their care will increase. Nursing homes offer skilled nursing care, and thus are more expensive than assisted living.Pricing model
A community’s pricing model refers to the structure they use to package their services to their residents. The pricing model determines what your loved one will pay each month and what services are included with that cost. Common pricing models in senior living are as follows:- An all-inclusive pricing model means your loved one will pay a single base fee covering everything from housing and utilities to services and amenities.
- An a la carte pricing model means your loved one will pay a base fee for housing, utilities, and some basic services and can choose from a variety of add-on services and amenities for an additional cost.
- A tiered pricing model means a community offers multiple levels of care, each at different price points.
Services, amenities, and activities
The services and amenities your loved one receives will likely depend on their needs and their chosen community’s pricing model. All-inclusive models typically include housing, utilities, dining services, housekeeping, transportation, care services, and anything else the community may offer. If your loved one’s chosen community offers an a la carte plan, they can add or remove certain services as needed. Some services may cost more to add on than others, and the more they add, the higher their monthly rate will be.Room type and floor plan
Assisted living communities offer apartment-style accommodations. As with any apartment-style complex, the base rental rate varies depending on the floor plan’s size and features. Some communities offer one-, two-, or even three-bedroom floor plans. Some floor plans may include a full kitchen and a private balcony. To cut down on costs, your loved one may opt to split the price with a roommate or two.Length of stay
The total cost of care will be higher the longer your loved one remains in senior living. The actual length of time that they’ll require senior care depends on their age, gender, medical history, and overall health status.
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Are there ways to offset assisted living or nursing home costs?
Senior living is most commonly paid for using a combination of personal savings, Social Security benefits, proceeds from selling a home, long-term care insurance (if your parent already owns a policy), and even life insurance. There are a number of creative ways to cover senior care costs. Your loved one may be able to reduce their out-of-pocket expenses if they qualify for Medicaid, veterans benefits, or other government-funded programs.
How do I know if a senior community is the right fit for my loved one?
This is a lot of information to take in, and it’s completely normal to be feeling unsure of what your family’s next steps should be. Aside from the cost, you should also take into account the positive impact that a senior living community can have on your loved one, like social enrichment opportunities, greater safety and security, and improvement to their overall well-being. If you think you or your loved one could benefit from one-on-one guidance on senior care options, consider reaching out to a Senior Care Advisor. Just call, share your concerns, and they’ll help you find a senior care option that suits your loved one’s needs , preferences, and budget, all at not cost to your family.
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