Retirement Home vs. Nursing Home: Which is Best for You?

Updated

Certified Care Manager, Aging Life Care Professional, and National Master Guardian Emeritus

There can be misconceptions about why people may live in either retirement homes or nursing homes. Much of the misunderstanding has to do with how much care each setting provides and how much you may end up paying for each.

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It is important to remember that Medicare does not pay for either a retirement home or a nursing home. Medicare will pay for short-term skilled nursing if specific criteria are met.

Some people are in the gray area of needing help, but may want to avoid nursing home care and are unsure of what their options are. Deciding between the two has a lot to do with the availability of support services.

If you are cared for by a family member, there could be limits to that care. Or, your financial situation doesn’t allow for private pay caregivers. Below, we explain retirement homes versus nursing homes to give you a better idea of how to make your decision.

Retirement Home vs. Nursing Home: Type of Care Received

Retirement homes and nursing homes can almost be on the most opposite ends of the care spectrum. To narrow that gap while living in a retirement home, you would have to put significant support and medical services in place.

These services can be expensive, but they can keep you from going to a nursing home if managed well. 

Retirement home: type of care received

Since the term retirement home can cover a wide range of housing, the type of care received is reflected in which community you choose.

Retirement homes can be everything from large high rise buildings to individual houses in a senior community. Retirement communities that also house assisted living units usually have more care and amenities available, but they are still considered independent.

Here are some of the more independent options available at a retirement home:

  • Group dining with the option of preparing meals in your own kitchen.
  • Weekly housekeeping.
  • Access to activities.
  • Transportation to doctor’s appointments.
  • Physician services are available on-site in some locations. 
  • No nursing or aide support.
  • Many retirement homes have security features like a locked front door and 24-hour emergency services.
  • Easy transition to assisted living if available in the building.

Nursing home: type of care received

Nursing homes provide a high level of care for people who aren’t able to function without it. Nursing homes are equipped with the type of medical support you might expect in a hospital setting.

Some of the things that you can expect specifically at a nursing home are the following:

  • 24-hour nursing
  • The ability for staff to administer catheter care, IV medications, wound, and diabetic care
  • Assistance with bathing, dressing, feeding, and getting in and out of bed
  • Occupational, physical, respiratory, and speech therapy available for residents who qualify
  • Management of medications
  • Leisure activities
  • Dementia care
  • The ability to prepare special diets
  • Transportation to outside medical appointments
  • 24-hour medical emergency response systems

Retirement Home vs. Nursing Home: Admissions Process

There is a significant difference in the admissions process between a retirement home and a nursing home. These differences are reflected in the state’s oversight, the level of care needed, and how you can pay for said services and location.

Retirement home admission process

There are three kinds of retirement communities and there can be a big difference in the admission process, even when it comes to retirement homes.

Independent senior living. Specifically, in these settings, you are expected to buy or rent a house. This could be an active senior community or a 55+ mobile home park.

The only qualifier is the ability to pay for the property. However, if you need additional support, you are responsible for arranging that.

Independent senior living with assisted living. With independent senior living, an admission or marketing professional will evaluate your ability to live independently. If you require too much assistance with daily living activities, they may ask you to put support in place before moving such as paid private care. Or, they might suggest assisted living.

Monthly rental fees are discussed and your ability to pay. The admissions process doesn’t include an audit of your financial situation, but pricing is a consideration. 

Subsidized senior housing. There is also an option for subsidized senior housing, which includes living in high rise buildings for low-income seniors. But with this kind of housing, there are no formal support services such as aides or nursing.

In some locations, you can have a case manager, which will review your admission application. The primary criteria include meeting financial need as well as them being able to find an open spot.

Nursing home admission process

By contrast, the nursing home admissions process is much more complicated due to federal and state oversight of the admissions criteria. If you are coming into a nursing home under Medicaid, you must meet the Nursing Home Level of Care (NFLOC).  

Each state will have an assessment tool to determine eligibility under the NFLOC, but the guidelines include:

  • The ability to perform activities of daily living
  • Physical functioning ability
  • Cognitive impairment
  • Medical needs
  • Mental health problems
  • A diagnosis of dementia alone may not be enough to qualify for nursing home care.
  • A diagnosis of only a mental health disorder may disqualify someone from admission. 

Retirement Home vs. Nursing Home: Paying for Care

Paying for care can get very expensive. Nursing home costs are the highest, which is why many people end up qualifying for Medicaid. Let’s look at ways to pay for both retirement and nursing homes.

Retirement home: paying for care

Paying for a retirement home has one source: private pay. Medicare does not pay for a retirement home or assisted living. Whether you are renting or buying, you must come up with the funding. This would include using proceeds from the sale of a home, savings, retirement, and social security income.

Long-term care insurance may not pay for a retirement home because they don’t offer any assistance on that front. However, you could use your long-term care insurance to pay for private caregivers in a retirement home. 

Nursing home: paying for care

Nursing homes are expensive. Medicare only pays for short term skilled rehabilitation services, leaving four possible ways to pay for nursing home care:

  • Private pay. This means paying out-of-pocket.
  • Medicaid. The states determine Medicaid eligibility, but generally speaking, you will have to deplete your assets and have low income. Once you qualify for Medicaid, they will pay 100 percent of the costs of nursing home care.
  • Long-term care insurance. Nursing-home care is one of the main reasons people engage in long-term care planning by buying insurance. A good policy can substantially defray costs. 
  • Veteran’s benefits. If you or your spouse is a veteran, you may qualify for help with paying for a nursing home. You may also be eligible for a reduced rate in a VA contracted nursing home. 

Retirement Home vs. Nursing Home: Who Are They For?

Understanding the difference between a retirement home and a nursing home will help you make the right choice about which one is best for you. Nursing home care can be used as a temporary interim step towards regaining independence. 

Retirement home: who is it for?

Almost anyone can move into a retirement home as long as they can pay for it.

The main reasons people choose a retirement home can include the fact that they may be tired of running a house. Running a household can include things like making your own meals, housekeeping, and maintaining the property. With a retirement home, you no longer have to worry about those responsibilities.

In addition, perhaps you have adult children that have moved out of the house, or you find yourself spending more time alone than before. Social options and activities are more available, especially when you are part of a retirement community. A lot of people may be willing to sell their house to live in an active and social adult community.

Also, with a retirement home, adults can have more access to supportive care while maintaining freedom and independence.

Nursing home: who is it for?

Nursing homes are for people who can’t afford or can’t be safely cared for by other supportive services in the home — or require around the clock care. It may go without saying, but people must also have nursing needs to be admitted to a nursing home.

For example, residents at nursing home may be in need of the following:

  • People who need specialized care like IV medications and catheter care can no longer be provided by home health or other nursing services.
  • People who are bed-bound and need maximum assistance getting in and out of bed.
  • People who can’t remain at home without nursing supervision.
  • People with advanced dementia who have agitation, self-harm, or wandering behavior.

Bridging the Gap Between Retirement Home and Nursing Home Care

As you can see, there can be a big difference between a retirement home and a nursing home. However, not everyone suddenly needs a nursing home. One way of thinking of it is as a continuum of needs that fluctuate through time. It is possible to put support in place to bridge the gap and delay the need for nursing home care.

These are some of the services to consider, as some are covered by insurance, while many are not.

  • Hire private duty caregivers to help with bathing, grooming, shopping, cooking, and transportation. Unless you have a long-term care policy, this will need to be taken care of via private pay. Private duty caregiving scheduling is also flexible, and allows you to be taken care of on your schedule.
  • Use home health to assist by providing nurses, aides, and physical and occupational therapists. Home health is an insurance-covered benefit but time-limited for most people. 
  • Hire nurses once the home health benefit has ended. Private nursing is expensive but might give enough support to get you through a difficult medical problem.
  • If you qualify for short term skilled nursing rehabilitation, it is best to use it as intensive inpatient therapies and nursing can lead to better outcomes after an accident or illness. Medicare covers skilled nursing rehabilitation if certain criteria are met.
  • Use a nursing home for a short stay to get intensive nursing and therapy services with the goal of getting back to your retirement home.

Retirement Home vs. Nursing Home

As you can see by the comparison between the two, there are significant differences between a retirement home and a nursing home. Deciding between the two is dependent on the medical and safety needs of the individual. Finances can also play a significant role as well in making a decision.

If you can add enough support in a retirement home, it is possible to remain there. However, the costs and logistics of providing that care might exceed what is feasible at some point.

If you're looking for more resources on finding the best care, read our guides on caregiver duties and if Medicare can pay for a caregiver.


Sources

  1. “What is Nursing Home Level of Care and its Importance to Medicaid Eligibility.” American Council on Aging, www.medicaidplanningassistance.org/nursing-home-level-of-care/
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