Assisted living vs nursing home: differences, cost and who pays

Assisted living is housing with help with daily care for people who do not need the medical care a nursing home provides. A nursing home provides medical care and therapy around the clock for people who do not need a hospital but cannot be cared for at home.

At a glance

	Assisted living	Nursing home
Who it suits	Older adults who need help with daily care and want to live more independently	People who do not need a hospital but cannot be cared for at home, and anyone who needs 24-hour care
What staff provide	Help with daily care and medicines, up to three meals a day, housekeeping, laundry and transportation; 24-hour supervision and on-site staff	Medical care, plus physical, speech and occupational therapy
Memory care	Residents can include people with dementia	Some homes have special care units for serious memory problems
Federal star rating	Not covered by the CMS system we read	Yes, the CMS Five-Star Quality Rating System
Medicare	Does not pay for long-term care	Pays for limited short-term skilled care only

Sources: MedlinePlus (assisted living and nursing homes), Medicare.gov and CMS.

What assisted living is

MedlinePlus says assisted living helps with daily care and usually has several levels of care, which vary by state. Services may include up to three meals a day, help with medicines, housekeeping, laundry and transportation. Facilities may provide 24-hour supervision, security and on-site staff.

Residents are usually older adults, including people with Alzheimer's disease or other types of dementia. The setting allows people to live more independently, and residents pay more for higher levels of care.

What a nursing home is

MedlinePlus says a nursing home is a place for people who do not need to be in a hospital but cannot be cared for at home. Staff provide medical care as well as physical, speech and occupational therapy. Nursing homes are not only for older adults. They are for anyone who needs 24-hour care.

See nursing homes near you in our directory.

Who pays

Medicare pays for much less than people expect. Medicare.gov says:

• Nursing homes: Part A may cover short-term nursing home or rehab care, up to 100 days, in a Medicare-certified nursing home, and the skilled care must be medically necessary. Medicare does not cover custodial care if it is the only care you need, and generally does not cover long-term nursing home stays unless you are receiving skilled nursing care.
• Assisted living: Medicare does not pay for long-term care. Medicare.gov describes it as non-medical help with tasks such as bathing and dressing, and lists assisted living as a place where you can get it. You pay all costs for non-covered services, including most long-term care.
• Medicaid: It may pay if you meet your state's requirements. Medicaid.gov says Medicaid is the primary payer across the nation for long-term care services, and Medicare.gov says it covers benefits not normally covered by Medicare, like nursing home care and personal care services.
• Private insurance: You can buy private long-term care insurance, according to Medicare.gov.

Medicaid rules differ by state. Our guides cover Medicaid and long-term care, Medicare and whether Medicaid pays for assisted living.

We do not publish an average cost for either option. No federal source we read gives one, and prices differ by community and level of care. The care cost comparison lets you enter the quotes you have and see them side by side.

Ratings and inspections

CMS publishes a Five-Star Quality Rating System for nursing homes. Each home gets one overall rating from 1 to 5 stars, with separate ratings for health inspections, staffing and quality measures. Five stars means much above average quality, and one star means much below average.

CMS is careful about the limits. It says no rating system can address all of the important considerations in choosing a nursing home, that specialty care such as rehabilitation or dementia care and how easy it is for family to visit are not captured, and that a nearby home may be better than a higher-rated home that is far away. It advises using the ratings with a visit and with state or local organizations such as the State Ombudsman program.

For how star ratings work, see what Medicare star ratings mean and Medicare care ratings by state.

Questions to ask before you choose

For an assisted living community:

• What levels of care exist, what does each cost, and who decides when a resident moves up a level?
• Which services are in the base rate and which are extra?
• What happens if the resident needs more care than the community provides?
• Does it accept Medicaid, and under what conditions?

For a nursing home:

• What is its CMS rating, and what do the inspection, staffing and quality scores say?
• What therapy services are on site?
• How will the facility confirm what Medicare covers for a short-term stay?

Carevo does not vouch for any provider. Visit more than one, ask for the fee schedule and contract in writing, and for nursing homes use the State Ombudsman program, which CMS recommends as one more source. If you are weighing care at home as well, see assisted living, memory care and home care.