How to Pay for Nursing Home Care

As what is generally the most expensive form of long-term senior care, nursing home care can be a pricey proposition for older adults and their families. If you are checking an elderly loved one into a nursing home facility, the decision to do so can be difficult enough as it is, since nursing homes are often the final step in the senior living cycle before the hospital or end-of-life hospice care. Adding the hefty price tag associated with nursing home care can make the entire situation that much more overwhelming and emotionally draining.

How Much Does Nursing Home Care Cost?

The good news is that there are a variety of different options to consider when it comes to paying for nursing home care. Before we examine the various payment methods available, though, let's look at how much nursing homes cost for the patients residing there.

According to a U.S News & World Report article from 2020, the average cost of nursing home care can vary, depending on whether you opt for a private room or a semi-private room. The 2013 figures provided in that report were $90,500 per year for a private room stay, and $81,000 per year for a semi-private room. The article also noted that 40 percent of the population will need to spend a period in a nursing home, and that the average stay is 835 days. In total, that means the average senior who spends time in a nursing home will pay between $185,000 and $208,000.

Obviously, these expenses may vary to some degree depending on geographical location and the senior's medical situation. The same U.S News & World Report article referenced above noted that the average stay for seniors in nursing homes was perhaps skewed a bit higher than it should be, thanks to outliers. Indeed, three in 10 nursing home residents only stay for 100 days or fewer (perhaps to recover from an isolated injury or illness), but the average is skewed by the one in 10 residents whose stays reach or exceed five years. As a result, it's difficult to budget for nursing home care, but you should expect to pay between $220 and $250 per day, based on 2013 figures.

Payment Methods for Nursing Home Care

Payment methods for nursing home care can vary as much as the prices themselves. First off, it's important to note that while Medicare can provide some coverage for nursing home expenses, it can only be a primary payment method if the nursing home stay is going to be brief. Indeed, Medicare will only cover nursing home stays for a maximum of 100 days. As we learned above, that length of time is sufficient to cover the expenses of three in 10 seniors who spend time in nursing home facilities. For the other 70 percent of patients, though, payment will have to come primarily from somewhere else.

Because it requires that a senior will have nearly exhausted their finances and personal assets before it can be used to cover nursing home care, Medicaid is a last resort. In other words, families should not only keep Medicaid out of their plans for paying for long-term care, but try to actively avoid reaching the point where Medicaid funding would kick in.

Most experts recommend that families start the financial planning process for the expense of nursing home care as soon as possible. A senior in your life may still be perfectly healthy and living at home (or in a retirement community) right now, but that doesn't mean it's too early to begin planning for the next stage of long-term senior living or care. On the contrary, by planning and strategizing early, you and your family will be better prepared to weather the big financial hit that nursing homes obviously bring to the table.

One common strategy is to start paying for long-term care insurance. Check with your insurance company to learn more about their available long-term care policies for seniors. Many long-term care policies will only cover nursing home care, which means they won't kick in to help pay for lower-level senior care (i.e. in-home care, independent living, or assisted living).

Still, considering the expense of nursing home care, it is worth speaking with an insurance agent to find out what kind of coverage an elderly loved one can get in this realm. Insurance can help greatly to lessen the blow of paying for nursing care-especially on a long-term basis. Usually, you will not be able to buy these types of insurance policy after a senior moves into a nursing home facility, so looking into them and planning for them when your elderly loved ones are still healthy is essential.

Similar to other types of care, paying for nursing home expenses either out of pocket or out of a retirement account is an available option. For wealthier adults with deep savings, this may be a viable solution. For most families, though, there simply won't be enough savings left to cover the costs associated with long-term nursing home stays. Even those who could afford to pay for nursing home care out of pocket would be wise to look into long-term care insurance, as doing so can save money that can later be passed down to children or grandchildren-either to pay for funeral expenses, or simply as an inheritance.

If the senior in question is a veteran, then the Veterans Administration Aid and Attendance program will be able to help finance the costs of nursing home care. This program pays out monthly funds for both a veteran and the veteran's spouse to stay in nursing home facilities. The monthly payments, while over $1,700 for a veteran and over $1,000 for their spouse, are a mere pittance when compared to the overall cost of nursing home care but can still help to lessen the blow.

Bottom line, the sooner you or your family start planning for the costs of nursing home care, the better prepared you will be to handle these serious expenses. The extremely high costs of nursing home facilities can put any family into financial hardship, but using a combination of the above methods should help reduce the strain while making sure the senior in your life gets the care they need and deserve.