Is Home Care Cheaper than a Nursing Home?

David Bolton

/

September 28, 2020

Retirement Communities
Is Home Care Cheaper than a Nursing Home? | Retire Fearless

Is home care cheaper than a nursing home? This is a question that many people get to ask when looking at the best place to retire. But before answering this question, it's worth noting that various factors go into making this decision. In other words, it's not entirely a financial decision. While home care is widely seen as a cheaper option, several variables can easily change this equation.

Whether you're assessing a nursing home for yourself or an elderly loved one, there comes a time when you'll start asking yourself: where's the best place for me or my aging loved ones? Believe it or not, choosing between aging in place with home care and taking the bold step of moving into a nursing home is never an easy decision. Of course, many seniors do not want to leave their homes but many others may want 24/7 access to medical care and services that are provided in nursing homes. But even with that, there are still numerous factors that might go into making this decision. For instance, your personal preferences, your loved one's health condition, the amount of professional care needed, proximity to family members, and, of course, financial matters are some of the few things to consider.

So is home care cheaper than a nursing home? The simplest answer to this question is, yes. Home care can be cheaper than a nursing home but only if the senior requires 40 hours (eight hours a day) or less per week of paid home care. But if the senior requires around-the-clock home care, then a nursing home can become the cheaper alternative. Remember, many factors such as the senior's health conditions, the state of the senior's homeownership, and the geographical location can easily change this equation.

That being said, there are a lot of questions and considerations that go into making this huge and critical decision. In this article, we'll make the process less overwhelming. We'll discuss the differences between home care and nursing care, how much they cost, various payment options, and the pros and cons of each. At the end of this read, you'll hopefully be in a much better position to make the best choice for you or your loved one.

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What is the Level of Daily Care Needed?

One of the most important things to consider when choosing between home care and a nursing home is the level of care required. Simply put, do you need someone to help around the house full-time or part-time with activities of daily living (ADLs) such as feeding, bathing, walking? Is it about a medical reminder or does the assistant offer medical assistance? Ultimately, the level of care and amenities that you need should be the main determinant when looking to choose between nursing home care and in-home care.

So before making any decisions, it's of great importance to figure out the exact needs of your loved one. You must understand his/her required needs and compare them with what's already available in your home. The best way of doing this is by making a list of everything that your aging loved one might need assistance with on a daily, weekly, and monthly basis. This will, at least, give you the real picture of the right level of care and assistance that he/she needs.

Secondly, you should consider how much, you, your family, and friends can help. It's vital not just to look at today but long-term as your loved one may require ongoing care for years and not just months. By looking at these factors, you'll be better placed to decide whether or not you require additional help and how much of that help is required now or in the future. It will most certainly help when deciding to choose in-home care or nursing home care.

What should you expect from In-Home Care?

In-home care essentially revolves around having home health aides helping with ADLs such as eating, bathing, dressing, toileting, and many more from the comfort of your home. They can also perform other household tasks such as cleaning, laundry, and running errands including grocery shopping.

The aides are well-trained and are capable of monitoring their client's health and can check vital signs such as blood pressure, respiration, and pulse. They can also handle various emergencies such as heart attacks, strokes, and accidents. Depending on the level of care needed by the care recipient these home health aides can work part-time, full-time, or even live with the elderly.

In-home care can generally range from a few hours a week to around-the-clock care. Most in-home care recipients receive about 44 hours or less per week. You, however, have to keep in mind that around-the-clock can be very expensive and usually involve a palliative type of care service.

One of the main reasons why many seniors choose in-home care revolves around the freedom and independence that they get to enjoy within their homes. In addition to being familiar with their surroundings, many seniors report that they enjoy a greater quality of life and happiness not just by aging in place but also when receiving in-home care.

So when considering in-home care as an option, it's vital to decide whether to use an in-home care agency or hire a caregiver privately. Hiring a caregiver privately may be a little bit cheaper but using an agency offers a lot of benefits. In addition to finding qualified caregivers, the agency will confirm their credentials, run background checks, handle financial aspects of paying the caregiver(s) and calculate any involved taxes. If you decide to go with in-home care agencies, just make sure that they provide professional caregivers and services that are flexible and affordable.

Pros and Cons of In-Home Care

Pros

  • The senior remains in a comfortable and familiar surrounding
  • In-home care gives you the opportunity of having a more personal relationship with the caregiver
  • You get the chance to enjoy your freedom and independence
  • It's typically more cost-effective than nursing home care if all factors remain constant
  • The caregivers are qualified professionals (mostly licensed nurses)
  • In-home care is a lot better for dementia patients
  • Your well-being and happiness is almost guaranteed

Cons

  • Your home may not be as secure as a nursing home. Your home doesn't have medical facilities, as well as security and staff available 24/7
  • The level of care you need may depend on the person you hire.

The Cost of In-Home Care

As we've noted above, aging in place is the most desired option among elders as it comes with several benefits. For those who need nothing more other than basic care, in-home care can be much cheaper than other alternatives. That being said, the cost of in-home senior care will largely depend on the number of hours that the designated caregiver is supposed to spend with the senior. Other factors that may determine the cost of in-home care include the necessary supplies that are required to ensure that the elderly lead a dignified, healthy, and happy life, as well as other added chore that the caregiver is required to perform.

Needless to say, every state has its median cost associated with in-home senior care. But according to a report by Genworth Financial the national average of in-home care is around $20 or $4,000 per month. This cost can range from $18 to $25 an hour even though some states are known to be more expensive.

Some of the states with the least expensive in-home care include:

  • West Virginia and Louisiana - $16
  • Arkansas, Alabama, and Mississippi - $16 (hourly rates)
  • Tennessee, North Carolina, Georgia - $18

Some of the states with the most expensive in-home care include:

  • Minnesota, Hawaii, Rhode Island, and Massachusetts - $25
  • Alaska - $26
  • North Dakota - $27

All in all, keep in mind that the amount you pay for in-home care will largely depend on the number of hours that a caregiver has to spend in your home, as well as the supplies needed to ensure that your aging loved one is healthy and comfortable.

Here's how in-home care is generally broken down.

Hourly Rates - This is, without a doubt, the most common determinant of how much you'll pay for in-come. This is perfect for seniors who remain active and can perform their ADLs, so do not need caregivers around-the-clock. Generally, a senior may require a caregiver for about 2 to 4 hours minimum.

Daily Rates - This is typically meant for seniors who require care around-the-clock. Such rates are calculated daily and may cost between $200 and $350 per day depending on the specialized care that a senior needs.

Overnight Rates - These rates are slightly higher than daily rates even though there are limited numbers of hours that the caregiver offers assistance because the senior is probably sleeping. It's perfect for those seniors who need professional assistance at night either because they have degenerative conditions or get up a lot to go to the bathroom.

What should you expect from a Nursing Home?

Also known as convalescent homes, nursing home care refers to a skilled nursing facility that provides around-the-clock care for its residents. Generally, many seniors who become residents at a nursing home have probably experienced a period of hospitalization and still require 24/7 care as they recover or to help in improving their health. As soon as the elderly has recovered perfectly, he/she can choose to relocate back to his/her home or an assisted living facility.

Even though many seniors often prefer to postpone their stay in a nursing home as long as they possibly can, it's unquestionable that nursing home care is the best option for those in need of more care, especially if the type of care cannot be properly handled in a typical home setting. Some of the services that are provided in a nursing home include and are not limited to ADLs, personal hygiene, feeding, help with mobility, laundry, as well as skilled medical care and therapy whenever required.

Most nursing homes offer both private and semi-private rooms with private rooms being more expensive than shared spaces. They normally have age restrictions and do not allow on-site cooking, as well as pets on the premises. You should, however, confirm with the particular nursing home if such restrictions are in place. On the other hand, most nursing homes offer additional amenities to their residents such as games, fitness, arts and crafts, shopping, entertainment, and transportation.

So when the day comes when your aging senior is no longer independent and cannot perform simple tasks such as feeding or care for themselves, a nursing home could be the best option. They're perfect for those seniors in need of advanced memory care services, especially to individuals with Huntington's disease, Alzheimer's, and dementia, as well as those with severe mobility issues or serious injuries.

Pros and Cons of Nursing Home Care

Pros

  • Nursing homes are more secure, especially for seniors with Alzheimer's or dementia, and are more likely to wander.
  • Nursing homes normally have a wide variety of medical professionals as part of the staff. This means that your aging loved one will receive both medical and non-medical assistance 24/7.
  • Nursing homes generally have some of the best medical equipment so your aging loved one will be in proximity of any attention he/she requires
  • It gives you the peace of mind knowing that your aging loved one is in safe and professional care.

Cons

  • The individual may lack freedom and independence
  • Transitioning from home to a nursing home can be overwhelming to some seniors
  • Nursing homes are generally more expensive than in-home care

The Cost of Nursing Home Care

According to a report by Genworth Financial, the national average cost of a nursing home is about $7,500 per month for a semi-private room. This is around $90,000 a year. The average cost of a private room is about $8,500 per month, which is about $102,000 a year. Keep in mind that these prices may vary depending on where you live, the amenities provided by the nursing home, as well as the level of care that you or your aging loved one requires.

Paying for Nursing Home Care

There are various ways of paying for your nursing home care. You can pay privately, through health insurance, life insurance, or long-term insurance. You can also use other methods such as Medicaid, Medicare, and Veterans' programs. You should, however, keep in mind that there are only certain situations where Medicare can help you pay for your nursing home care as it usually doesn't. In most cases, you can use Medicare to cover for short-terms stays such as a three-day stay. 

So is Home Care Cheaper than a Nursing Home?

As we noted earlier, the straightforward answer to this question is yes as long as the senior requires care for not more than eight hours a day. In-home care can be more expensive than a nursing home in certain situations. For example, in-home care will be more expensive if your aging loved one requires a high level of around-the-clock specialized care.

All in all, everyone is probably dealing with a unique situation when it comes to aging. What is perfect for you may not be perfect for another person. It's therefore important to stay flexible, adapt to certain situations and conditions, and find the best option based on your situation or your aging loved one's situation. At the end of the day, we all deserve comfort, proper care, and a super place to call home in our twilight years.

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