There is a lot of confusion about the different types of senior living available today, but two of the best-known types of residential senior care are assisted living communities and nursing homes. One way to characterize the difference between nursing homes and assisted living facilities is to describe the former as more hospital-like and the latter as more home-like. When my still-active grandparents, then in their 60s, moved into an assisted living community apartment back in the 1980s, it was a somewhat novel concept. Living there, they were able to get help if they needed it, but otherwise remained fairly independent. In contrast, a nursing home, also known as a skilled nursing facility, provides 24-7 care for seniors requiring medical support.
While assisted living facilities operate on a non-medical model, the distinction between a nursing home versus an assisted living facility can seem a little blurry. Still, differences remain between the two types of senior residential care, including how they’re licensed and how they get paid for the care they provide.
Different Care Needs
Among those 65 and older, nearly 70 percent will develop disabilities before they die and 35 percent will eventually enter a nursing home, according to the San Francisco-based nonprofit Family Caregiver Alliance. Skilled nursing care may be needed on either a short-term or long-term basis, said Elizabeth Chiappetta, an attorney with the Pittsburgh-based law firm Robert Peirce & Associates. A short-term stay may be required to recover from an illness, injury or surgery, she said.
Long-term skilled nursing care is often needed for people with chronic medical conditions, severe pain or permanent disabilities. "In general, skilled nursing care, whether it's short or long-term, is for those individuals requiring round-the-clock care,” said Chiapetta. “Skilled nursing facilities are highly regulated, licensed and inspected by state and federal agencies." For instance, a skilled nursing facility would be appropriate for a patient with a feeding tube, but an assisted living community would not.
Licensing Requirements, Payment Options Different for Nursing Homes and Assisted Living
Medicare's website lets you compare nursing homes and see their overall rating, plus several other ranking categories such as staffing and health inspections. In California, for example, nursing homes are licensed by the California Department of Health and must adhere to state standards. Additionally, nursing facilities that receive reimbursement from Medicare and Medi-Cal programs (California's version of Medicaid) must be certified by the federal government to qualify for payment from these federal programs, according to California Advocates for Nursing Home Reform (CANHR).
On the other hand, assisted living facilities (also known as residential care facilities for the elderly) in California are licensed by the California Department of Social Services and usually don't receive federal funding to pay for residents' care. Residents of assisted living facilities -- which typically provide housekeeping, caregiving, shared meals, activities, transportation and medication management -- most often pay for their care with private funds or long-term care insurance.
There are some exceptions, however. Some states offer waiver programs that help pay assisted living costs for Medicaid recipients who qualify for skilled nursing care. California started a pilot waiver program in three counties in 2006. That program has since expanded and is currently full, with 3,700 participants. Applicants are being placed on a wait list until May 21, 2017.
Nursing home care can be paid for privately, with long-term care insurance, with Medicare or Medicaid. Medicare has complex and seemingly confusing rules about paying for skilled nursing care. If a senior is in the hospital three days prior to going to a skilled nursing facility, Medicare will cover 100 percent of costs for the first 20 days. For the next 21-100 days, the patient must contribute a co-payment.
After 100 days in a skilled nursing facility in any one benefit period, Medicare stops paying. Additionally, the rules are very strict about requiring a three-night stay in the hospital prior to admission to a skilled nursing facility. According to medicare.gov, if an elder goes to the emergency department (or emergency room) at a hospital and spends one day being observed and is then admitted to the hospital for two days, they don't qualify for their skilled nursing stay to be covered by Medicare. "Even though you spent three days in the hospital, you were considered an outpatient while getting ED and observation services. These days, don't count toward the 3-day inpatient hospital stay requirement," Medicare.gov states. The takeaway: Medicare isn’t always a sure bet to cover skilled nursing home care.
While Medicare may help pay for the first 100 days of skilled nursing care, paying for this care privately can be very expensive. In Kansas, paying out-of-pocket for skilled nursing care can cost more than $10,000 a month for a private room, according to Mandy Shoemaker, co-owner of Prairie Elder Care in Overland Park, Kan., which operates homes for residents with dementia. A shared nursing home room can cost anywhere from $5,000 to $8,000 a month, Shoemaker said.
Assisted living, which doesn't provide the same types of medical support as a skilled nursing facility, is typically less expensive than paying for a nursing home out of pocket. Assisted living facilities are also less institutional in feel and appearance. Rather than paying for a nursing home, some elders opt to stay in their assisted living community and pay for additional services. Rules and regulations governing assisted living facilities vary by state in terms of what health conditions are allowable for residents.
"Regulations for assisted living are pretty loose, as long as you have enough staff to meet the needs of the residents, they can remain in assisted living. This sometimes includes bringing in other agencies such as physical therapy, occupational therapy, speech or skilled nursing as well as hospice to meet those needs," Shoemaker said. "Assisted living costs less than skilled nursing generally, although with level-of-care charges, they end up paying close to what they would in skilled nursing, especially if they are bringing in extra care to meet their needs."
But what about seniors who don't have thousands of dollars a month to pay for care or have already spent their assets? Medicaid, a federal program, provides health coverage to more than 4.6 million low-income seniors, many of whom are also enrolled in Medicare. Medicaid programs, services and eligibility requirements vary depending on the state.
In Kansas, some low-income, high-functioning elders who could live in an assisted living facilities end up in nursing homes because Medicaid covers that higher level of care but doesn't cover assisted living, according to Shoemaker. More than 60 percent of patients in skilled nursing facilities are on Medicaid, she said.