One of the biggest considerations when deciding that it’s time for a loved one to go to a nursing home is how much it will cost. Prices vary from state to state and facility to facility, but one thing is for sure: It’s not cheap. The national median cost of a semi-private room in a nursing home in 2020 for one year was $93,072, and it was $105,852 for a private room, according to a Genworth Financial survey. And the average stay in a nursing home was 835 days, or almost three years, according to the latest National Nursing Home Survey, conducted by the Centers for Disease Control and Prevention (CDC.)
People typically pay for nursing homes through private funds, or, if they qualify, through Medicaid. 62% of nursing home costs in the U.S. are paid for by Medicaid, according to Kaiser Family Foundation. Medicare, on the other hand, will only cover costs in full for up to 20 days, and partially for the next 21 to 100 days. Beyond 100 days, the full cost of care is the resident’s responsibility.
The good news is that, unlike long-term assisted living facilities, nursing homes have stricter laws on how they must operate — including how they charge for their services. Most nursing homes provide a monthly bill to the resident or the legal appointee. It usually starts out with the basic charges, which include a fee for room and board, and medical and personal care. These rates can differ depending on what the resident’s health status is. For instance, residents with Alzheimer’s or a massive head injury may pay more than someone who has diabetes or respiratory issues. But some facilities charge an all-inclusive fee for all medical services, while others will provide different rates for physician services, lab tests and the administration of prescription drugs.
To protect your loved ones and your wallet, make sure you understand the terms of the nursing home, get everything in writing and watch out for these five potentially hidden fees.
1. Health assessment
Most nursing homes do a health assessment when a resident first moves in, and for many facilities, it’s part of basic care. But depending on the facility, it could show up on your bill as a one-time fee.
What to do: When you’re assessing different facilities, ask whether it’s included or not so you can budget for it if it’s not included.
2. Leave of absence fee
Sometimes nursing homes charge extra for something called “leave of absence,” also referred to as a bed-hold. It’s a daily, extra cost for residents who need to leave the nursing home to head to the hospital for surgery, or a different facility for medical and therapeutic leave. Homes will charge you to hold the bed so the resident can return later on. If a bed-hold agreement is not signed, the nursing home can discharge the resident and provide the space for someone else.
What to do: When you’re assessing different facilities, ask whether it’s included or not so you are prepared for it if the resident needs to leave at any point. Make sure to sign a bed-hold agreement when the resident first moves in so he won’t lose his place if he has to leave temporarily.
3. State assessments
Some states will add a nursing home assessment on your bill. If the resident is paying for nursing home care via long-term care insurance, this will likely not appear on your bill. But when private funds are used, this assessment is passed directly onto the resident.
What to do: You’re likely stuck with this fee if you’re paying privately. That said, the person paying the bill for the nursing home can deduct this assessment as a tax credit, so make sure your accountant knows about this charge.
4. Extra services
Additional care such as social services and therapies, and other offerings that are not directly tied to the basic standard care (such as financial management services) can be an extra cost, depending on the state.
What to do: Always ask to see a sample bill first, get all the fees in writing and ask how the nursing homes defines the word “care.”
5. Cost increases
If you do end up as a resident, pay attention to a pre-bill that a nursing home might send with the monthly statement, which contains the estimated cost for the next month. Many homes do increase the costs of its basic services, like room and board, once a year.
What to do: When assessing facilities, ask how often they raise their rates. Later, if you see a change from month to month, call the nursing home’s billing staff to ask about it.