Cost of Home Care vs. Nursing Homes: What’s the Difference and How to Pay

As you figure out which care type best fits the needs of your aging loved one, it’s important to understand the differences between home care and nursing home services.

Home care is senior support that’s provided in the comfort of your loved one’s home. The services provided by a home caregiver will largely depend on a senior’s individual needs but often focus on nonmedical services like companionship and cleaning. (Home health care is an option for seniors in need of medical support, but these services are different from general home care and typically cost more. However, home health care may be covered by Medicaid.)

Home care can include a variety of services, such as:

• Help with some activities of daily living (ADLs)
• Companionship
• Housekeeping
• Transportation services

Nursing homes offer long-term care for seniors who need daily support. Similar to skilled nursing facilities (where patients typically receive short-term, rehabilitative care), nursing homes provide intensive care provided by licensed medical staff who offer 24-hour monitoring and supervision for live-in residents.

Nursing homes provide essential services to residents, including:

• Medication management and administration
• Mobility and personal care assistance
• Social activities and outings
• Palliative and hospice care
• Rehabilitation and therapy

All of the services listed above are included in the monthly cost of nursing home care. If additional services cost extra, in-home caregivers and nursing home staff are trained to notify families in advance.

Let our care assessment guide you

The median cost of home care services is $30 per hour, according to A Place for Mom’s 2023 Cost of Long-Term Care and Senior Living report. At $30 per hour, a  full-time, in-home caregiver will cost approximately $5,200 per month while the median monthly cost of a nursing home is $9,034.^[01]

However, it can be hard to provide an exact picture of senior care costs without considering a person’s unique needs. For example, if your parent requires medical support, in-home care costs are likely to rise significantly.

Review the following details to understand how the costs of home care and nursing homes can shift.

Home care costs

Home care expenses can vary dramatically based on how much support an aging loved one needs:^[02]

A part-time caregiver may work well for families who can provide weekend and overnight care but need someone to care for their loved one during workdays.

Continuous care may be needed if your loved one prefers to live at home but requires round-the-clock assistance and supervision. If this level of support is required, a residential community like a nursing home may be something to consider. Keep in mind that in-home care may be tax deductible in some circumstances.

Nursing home costs

Nursing home costs can be seen as “all-inclusive” prices because the monthly rate covers room and board, meals, and daily assistance. Prices may change based on the location of the nursing home or what kind of room a senior selects, but the following examples will give you an idea of what monthly costs to anticipate:^[01]

Some nursing homes offer customizable add-ons to monthly rates like salon fees, activity packages, and more.

Talk with a Senior Living Advisor

There are two main categories of payment options for your loved one’s long-term care: private pay and public pay. The options below highlight different ways to cover the cost of home care and nursing homes.

Private pay options include sources from personal assets and private insurance programs. Consider the following private pay sources:

• Personal retirement funds, such as retirement income and investments, can be saved and used to pay for long-term care.
• Long-term care costs can be covered with Health Savings Account (HSA) funds.
• Life insurance policies can be sold to free up cash to cover senior care costs.
• Enrolling your loved one in a long-term care insurance plan will cover some of the care, as long as the type of care assists with activities of daily living.
• Home equity can be used to help fund senior care.

Public pay options, on the other hand, are government-funded and have specific eligibility requirements. The following options are commonly used public pay options:

• Medicare is a federal health insurance program for seniors who are over the age of 65. It won’t cover long-term care or nonmedical home care, but it will cover a portion of short-term medical care in nursing homes.
• Medicaid, on the other hand, is funded by both the federal and state governments and will pay for certain long-term care options for people who meet income requirements. Policies differ by state, but Medicaid may cover the costs of long-term home care and medical care.^[03]
• VA benefits are another public pay option available to veterans and their surviving spouses. Housebound benefits and the Aid and Attendance benefit can provide a source of income for seniors to help cover the costs of long-term care. Additionally, VA nursing homes are an accessible way for older veterans to receive their care.

Seniors and their families can explore eligibility for the following long-term care payment options, keeping in mind that a mix-and-match approach may help cover a majority of costs.

Read more:How to Pay for a Nursing Home: Resources and Advice

Understanding the cost differences between home care and nursing homes may help you reach a decision about which type of long-term is best for your loved one. If you’re ready to help your parent explore in-home care services, our Senior Living Advisors can help.

At no cost to your family, our experts will work to understand your loved one’s unique needs and compile a personalized list of local care options based on your budget and preferences. With A Place for Mom’s network of more than 2,000 home care providers, there’s sure to be an option that suits your family’s individual situation.