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Retirement Planning
Take this online seminar to learn about planning for retirement. The site includes information on individual retirement accounts, Roth 401(k)s, and Social Security benefits.

Learn more about what long-term care insurance covers.

Nursing Homes: Cost and Coverage

A nursing home is first and foremost a home. More than that, it provides skilled nursing care, rehabilitative care, medical services, personal care, and recreation in a supervised and safe environment. Finding the right nursing home for a loved one may be the most difficult decisions a person makes. However, family involvement does not end when a loved one enters a nursing home; the family assumes a crucial new role to make sure the home's staff others provides good care.

Starting the Search Start with an open but determined dialogue with your loved one and his or her community.

  • Talk with the loved one who will be living there. This will help in adjusting to the major life change about to occur.
  • Interact with other family members and ask for help in locating the best nursing home.
  • Communicate with doctors, nurses, or any other health professionals or social workers who care for your loved one.
  • Talk with some nursing home employees, especially assistants since they give most of the care.
  • Ask a pastor or rabbi for guidance.
  • Contact the long-term care ombudsman.

The Eldercare Locator can assist in finding the closest Area Agency on Aging (AAA) office and/or the long-term care ombudsman’s office. A long-term care ombudsman represents people who live in nursing homes. He or she investigates problems and complaints, and is a trusted source of information. Ombudsman volunteers make regular visits to nursing homes and can usually provide information about how well they’re organized and run. Note that ombudsman programs are not allowed to recommend one nursing home over another. However, they can provide important information such as the latest state inspection reports and the number and types of complaints received. The long-term care ombudsman can also give advice on what to look for when visiting nursing homes. The article “Nursing Homes: What to Ask” may be helpful when comparing facilities.

About a third of nursing home residents pay all of their nursing home costs from their own funds.

What it Costs Brace yourself. Most people already know nursing home care can be expensive. Although the average cost is more than $50,000 a year and climbing, it can vary widely depending on where you live. Employee health insurance does not pay for nursing home care. About a third of nursing home residents pay all of their nursing home costs from their own funds. Extended nursing home care can eat up your or your loved one's savings quickly—many people exhaust their finances after just six months. A fraction of them—about 5 percent—buys long-term care insurance, which covers the cost of a nursing home or other extended care. Medicare, the federal health insurance program for older persons and some younger ones with disabilities, pays for short-term nursing home stays.

So what about the rest? The greatest share of residents, about two-thirds, pay for their care with money from Medicaid, a federal and state health insurance program for people with low incomes. Medicaid picks up the cost of nursing home care once people have used almost all of their savings—spouses are allowed to keep some assets including income, savings, and their home. However, Medicaid will only pay for nursing home care that is provided at a facility certified by the government.

Eligibility for Medicaid varies by state, so if you think a loved one may need care years from now, you should gather information as soon as possible. Learning early about the requirements ensures the care comes quickly when you or your loved one need it.

As more people live longer and nursing home costs rise, so too does the urgency to deal with these issues.

AARP is committed to supporting new laws that will guide the development of an affordable, quality long-term care system for all Americans.

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