Assisted Living vs. In-Home Care Costs: What You Need to Know

Cost is typically at the top of most families' minds when looking for the best and most affordable care options for an aging loved one. Understanding the factors that drive the pricing of in-home care and assisted living can better inform your decision-making. Given that most older adults prefer to age in place, in-home care makes the most sense. But what about assisted living? Are there financial advantages of one over the other, and what about the level of care each can provide? 

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There is no one right choice for everyone. However, with an in-depth understanding of pricing, budgeting, and potential financial assistance, you can feel confident in your decision.

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Understanding the Costs of Assisted Living and In-Home Care 

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As we review the costs of assisted living vs. in-home care, you will see how many factors influence costs. 
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Overview of Assisted Living Costs

One of the best sources of up-to-date assisted living and in-home care costs is Genworth. But remember that any pricing is median costs and doesn’t necessarily reflect variations in care or even differences between companies.

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The median monthly cost of assisted living in the US is $5,511. But that figure does not tell the whole story. Here are some specific examples of the variation in median assisted living costs in the US.

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• Midland, Texas, has a population of 140,232. The monthly median cost of assisted living in Midland is $7,775, and the average household income is $123,556.  Houston, Texas, is the biggest city in Texas, and the monthly median cost of assisted living is $5,356, just a bit below the US average.
• Fort Smith, Arkansas, has a monthly median cost of assisted living of $3,477. The population is 89,975, with a poverty rate of 18.9% and an average household income of $81,694.
• The District of Columbia has the highest assisted living costs in the country. $11,288 a month.

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A simple explanation of the variation in assisted living costs in these areas might  be explained by these variables:

• Population size
• Average annual income 
• Competition in the area

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Overview of In-Home Care Costs

In-home costs also vary depending on location, hours provided, and whether the company is brick-and-mortar or online.

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According to Genworth, the hourly median cost in the US is $30.00. Let’s examine various areas of the country and differences in hourly rates.

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• Los Angeles, California, has an hourly median cost of $36.05.
• Beckley, West Virginia, has an hourly median cost of $10.30.
• Portland, Maine, has an hourly median cost of $40.17.

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Factors Influencing Costs 

Let’s dive into all the factors influencing the costs of in-home care and assisted living. Aside from location, the biggest factor is likely the type and amount of care your loved one needs. 

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Factors Affecting Assisted Living Costs

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Level of care needed

‍Most assisted living communities have a base rate that includes all meals, housekeeping, and activities, and some offer transportation to doctor’s appointments. The cost of care is often factored in depending on the level of care needed. 
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Some assisted living communities have levels 1-5 or some variation of that. The more care you need, the higher the cost added to the base rate. Other additional expenses could include laundry service and transportation.

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Location

‍Geographic location affects assisted living costs, but costs can differ even in the same area. For example, in San Francisco assisted living communities range from $2,595 to $6,500 a month.

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Memory care

Memory care communities are specialized communities for people with Alzheimer’s or dementia.

Many are housed in the same building as assisted living but with separate rooms and staff. The staff-to-resident ratio is usually higher in memory care than in assisted living, so pricing will be higher. 

Amenities

Newer assisted living communities often have many more amenities than more established ones.

Examples include swimming pools, putting greens, workout rooms, multiple common areas, and more. Luxury assisted living communities will have a higher base rate.

Size of Room

The size of the room you choose will affect pricing. A studio will cost less than a one-bedroom, and a two-bedroom, more than a one-bedroom.

Some assisted living communities offer shared rooms, making monthly costs more reasonable.

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Factors Affecting In-Home Costs

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The biggest factor affecting in-home costs (aside from geographical location) is the number of hours of care required. Companies often lower the hourly rate for more consecutive hours of care. 

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The other factor affecting cost is whether you choose an agency or find your caregiver through an online company. Agencies typically charge more per hour due to building costs and agency overhead. By hiring a caregiver directly through services like Clara, you can save up to 30% vs. the cost of an agency, bringing the cost per care hour down significantly from that $30 median rate, while still providing all the legal protections of paying on the books.

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Detailed Cost Comparison 

Cost comparisons can be challenging due to all the variables we have mentioned. However, reviewing basic and specialized services can help you with pricing. Many in-home care companies cannot offer medical care due to state regulations. 

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Assisted Living vs. In-Home Care: Basic Services

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‍Assisted Living Basic Services

• Room and board, which includes all meals and snacks
• Weekly housekeeping
• Activities
• Aide service
• Nursing service manages medications but typically does not offer personalized nursing care.
• Emergency response systems

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 In-Home Care Basic Services

• Assistance with bathing, grooming, and dressing.
• Shopping
• Meal preparation
• Light housekeeping
• Companionship
• Transportation 

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Assisted Living vs. In-Home Care: Specialized Services

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Only some assisted living or in-home care companies will offer specialized services, but these are some that may affect cost.

Assisted Living Specialized Services

• Dementia care in assisted living will typically cost more
• Round-the-clock on-demand care from aides
• Any additional medical care coordination

In-Home Specialized Services

• Dementia care
• Some in-home companies contract with nurses to provide medical care that insurance does not cover.
• Post-op care
• Respite care for family caregivers
• Supportive care for hospice patients
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Monthly and Annual Cost Comparison 

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Given that monthly and annual costs will vary according to geographic location and level of care needed, here are some basic comparisons.

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• Monthly cost of assisted living: $5,350
• Annual cost of assisted living: $66,126

• Monthly cost of in-home care with an agency: $5,720
• Monthly cost of in-home care with Clara: $4,778

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In making monthly and annual cost comparisons of assisted living vs in-home care, remember to account for the hours needed from in-home care vs. the level of care in assisted living. 

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Financial Assistance and Payment Options 

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Most families are concerned about the cost of care for a loved one. With a thorough understanding of insurance and other payment options, you can save while providing excellent care.

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Medicare and Medicaid

Medicare does not pay for in-home personal care or assisted living but does cover medical home health services. Under Medicare, most home health is time-limited, and you must have a doctor’s order for services. 
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Medicaid does pay for in-home care under specific conditions dictated by state regulations and programs. Medicaid also pays for home health services. Depending on where you live, Medicaid can pay for assisted living if you meet specific criteria.

These Medicaid programs are called Medicaid Waiver programs and vary by state. The goal of waiver programs is to prevent or delay nursing home care. 

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Private Pay and Long-Term Care Insurance

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Assisted living and in-home care will be private pay unless you have long-term care insurance. Even with a long-term care insurance policy, you must meet your policy’s specific criteria, which typically involves significant difficulty managing daily activities. Clara can help you navigate your long-term care insurance coverage and discover benefits you may be entitled to. Schedule a 100% free call with one of our care advisors here.

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Veterans Benefits

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For veterans, the Veterans Administration has some robust options for paying for in-home care or assisted living. The VA won’t pay for room and board at an assisted living facility but may pay for in-home nursing and homemaker services. If you are a veteran or spouse of a veteran, there are two main programs worth investigating.

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The Veterans Pension program provides monthly payments to veterans with specific age, income, and disability criteria. The pension can be used to pay for assisted living or in-home care. 

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Aid and Attendance is a benefit that provides monthly payments, in addition to the veteran's pension, for qualified veterans and their partners who need help with activities of daily living.

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Nonprofit and Charity Assistance

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Nonprofit and charity assistance will be community-specific, but a good place to start is with your local Area Agency on Aging. They will have information on faith-based and other organizations that may be able to assist with care. 

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Tips for Making an Informed Decision 

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Now, the challenging part. How do you and your loved one decide on the best and most affordable care option? A step-by-step process will help you both agree on what may work best, with the understanding that circumstances can change. 

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Evaluating Care Needs

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Evaluating care requires a close look at what your loved one needs to stay safe and improve function. These are areas to focus on

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• Activities of daily living such as dressing, bathing, transferring and toileting
• Medication management
• Ability to shop, plan, and cook meals
• Ability to manage the household, including housekeeping, finances, and home maintenance
• Are there complex medical needs, such as catheter and wound care or post-surgery rehabilitation? Private nursing, in addition to in-home care or assisted living, might be the best choice if home health can't meet long-term medical needs. 

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Considering Quality of Life

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Quality of life can be complicated. If your loved one wants to remain at home, can enough care be provided to keep them safe? In-home care is limited to assistance with ADLs, companionship, and homemaker services. 

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Home health is time-limited and may not adequately address ongoing medical issues. The advantage of in-home care is that if your loved one’s medical needs are met, the flexibility of in-home care will allow them to remain at home.

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Budgeting and Planning 

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Advance planning for long-term care should be started as soon as possible. Waiting until there is a need could be stressful and expensive.

Meeting with an estate planning attorney and financial advisor to begin the planning process will give you clarity on long-term care costs and a budgeting strategy to meet those costs. 

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The Cost of Assisted Living vs In-Home Care

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You may feel overwhelmed by all the variables and factors affecting the cost of assisted living vs. in-home care. However, with careful planning, budgeting, and discussions with your loved one about their preferences, you will make an informed decision. And remember, Clara's team is always here to help. Feel free to schedule a call with one of our care experts to discuss your specific needs in a friendly, no-obligation conversation.

This article was reviewed and fact-checked by Megan Jones, MSW, LSWAIC. 

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Sources

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Cost of long term care by state | Cost of care report. (n.d.-b). Genworth. https://www.genworth.com/aging-and-you/finances/cost-of-care

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Midland, Texas Population 2024. (n.d.). https://worldpopulationreview.com/us-cities/midland-tx-population

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Fort Smith, Arkansas population 2024. (n.d.). https://worldpopulationreview.com/us-cities/fort-smith-ar-population

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Myers, A. (2024, May 15). Your guide to assisted living in San Francisco, CA in 2024. Forbes Health. https://www.forbes.com/health/senior-living/assisted-living-in-san-francisco/

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Home health services. (n.d.). Medicare. https://www.medicare.gov/coverage/home-health-services

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Home health services. (n.d.-b). Medicare. https://www.medicare.gov/coverage/home-health-services

Medicaid and In-Home Care: Eligibility, benefits & state rules. (n.d.). https://www.medicaidplanningassistance.org/in-home-care/

VA.gov | Veterans Affairs. (n.d.-c). https://www.va.gov/geriatrics/pages/paying_for_long_term_care.asp

Eldercare locator. (n.d.-c). https://eldercare.acl.gov/Public/Index.aspx