Nursing Home vs Home Care Cost Comparison

How this nursing home vs home care cost calculator works

This tool compares the projected cost of two elder-care options over time:

• Nursing home care with a single monthly cost that typically includes housing, meals, and most hands-on care.
• Home care where the person stays at home and you pay an hourly rate for caregivers, plus any extra monthly housing or household costs you choose to include.

You enter today’s prices and how many years you want to model. The calculator then applies a constant annual inflation rate to both options and estimates totals for each year and across the full period.

Formulas used to estimate costs

The calculations assume all costs grow at the same annual inflation rate. In plain language:

• Nursing home monthly cost, each year = your current monthly cost input increased by inflation for that year.
• Home care monthly cost, each year = (hourly rate × paid hours per week × 52 ÷ 12) plus any extra monthly home costs, all increased by inflation.
• Yearly cost = monthly cost × 12.

The inflation step can be written as:

Where:

• C(0) is today’s monthly cost.
• C(y) is the monthly cost in year y.
• i is the annual inflation rate (for example, 0.03 for 3%).

Home care’s starting monthly cost is calculated as:

Where:

• r = hourly home care rate.
• h = paid hours per week.
• E = extra monthly home costs (rent, utilities, maintenance, etc.).

What the results mean

After you enter your assumptions and run the calculation, you can interpret the output along three main dimensions:

1. Year-by-year costs – For each year, the model shows the projected cost of nursing home care and home care after inflation. This can highlight when costs begin to feel unsustainable.
2. Total cost over the full period – The calculator sums each year to show total projected cost for both options over your chosen number of years.
3. Difference between options – Subtracting home care totals from nursing home totals shows how much more (or less) one option might cost under your assumptions.

If the home care total is lower, staying at home with paid help may be more cost-effective at the level of care you specified. If the nursing home total is lower, 24/7 facility care might be cheaper than replicating similar support at home.

Worked example

Suppose you enter:

• Nursing home monthly cost: $9,000
• Home care hourly rate: $30
• Paid home care hours per week: 20
• Extra monthly home costs: $250
• Expected duration: 3 years
• Annual cost inflation: 3%

First, estimate today’s monthly home care cost:

• Weekly cost = $30 × 20 = $600
• Annual caregiver cost = $600 × 52 = $31,200
• Monthly caregiver cost ≈ $31,200 ÷ 12 = $2,600
• Add extra home costs: $2,600 + $250 = $2,850 per month

In year 0 (today’s prices):

• Nursing home yearly cost ≈ $9,000 × 12 = $108,000
• Home care yearly cost ≈ $2,850 × 12 = $34,200

With 3% inflation, both amounts increase each year. Over three years, total costs will be higher than simply multiplying the year 0 value by 3, because each year’s costs are inflated separately. The calculator automates that compounding and shows totals and differences over the full period.

Side‑by‑side cost comparison

The tool is designed to help you compare the structure of the two cost paths, not just a single monthly bill. You can think of the comparison like this:

How to choose realistic inputs

To make the comparison meaningful, try to base your inputs on local data and realistic care needs:

• Nursing home monthly cost – Use recent quotes from nearby facilities. Ask whether the rate includes medications, therapy, and memory care if relevant.
• Home care hourly rate – Call a few agencies or registries in your area. Rates often differ for nights, weekends, or specialized care.
• Paid home care hours per week – Estimate how many hours of hands-on help are needed for bathing, meals, medications, and supervision. Near‑24/7 coverage may require multiple caregivers.
• Extra monthly home costs – Consider rent or mortgage, property taxes, utilities, groceries, transportation, and modest home modifications. You can also include an allowance for occasional help with cleaning or yard work.
• Expected duration (years) – Many people model between 1 and 10 years, but your situation may differ.
• Annual cost inflation – Long‑term care costs have often grown faster than general inflation. You can test a range (for example 3%–6%) to see how sensitive your results are.

Limitations and important assumptions

This calculator is a simplified illustration and does not capture every aspect of long‑term care planning. Key assumptions and limitations include:

• Constant inflation rate – The model assumes the same percentage increase every year. Real‑world prices can jump or flatten unpredictably.
• Stable care pattern – It assumes the same level of care (hours per week at home or nursing home level) for the entire period. In practice, needs often increase over time.
• Direct costs only – It compares what you pay out of pocket for care and housing. It does not put a dollar value on unpaid family caregiving, stress, or quality of life.
• No insurance or benefits modeling – The tool does not factor in Medicare, Medicaid, veterans benefits, long‑term care insurance, or tax effects. Coverage rules are complex and vary by jurisdiction.
• Not professional advice – The numbers are estimates for educational purposes only and should not be taken as financial, legal, or medical advice.

Because decisions about long‑term care affect both health and finances, consider discussing your situation with qualified professionals such as financial planners, elder law attorneys, and healthcare providers.

Using the results in real planning

The calculator can support conversations but cannot decide for you. Some ways to use the outputs include:

• Testing how different home care schedules (for example 20 vs 40 vs 60 hours per week) change the long‑term cost picture.
• Exploring the impact of delaying a move to a facility for a few years versus moving sooner.
• Estimating a savings or income target to help cover likely care costs.

Alongside the financial comparison, also weigh safety, social connection, caregiver burnout, and the person’s preferences. Those non‑financial factors may matter more than modest cost differences.

Choosing Care Is Emotional, but Costs Still Matter

When an older parent, partner, or other loved one begins to need daily assistance, families face one of the most difficult decisions of adult life: should they move into a nursing home or receive care at home? The choice is emotional and deeply personal. It depends on medical needs, family availability, the person’s preferences, housing suitability, and cultural expectations. Yet even when the heart is leading the conversation, the budget eventually enters the room. Nursing homes and in‑home care can each cost thousands of dollars per month. If the need lasts for years—as it often does—small monthly differences can translate into life‑changing financial outcomes.

This calculator does not tell you what you “should” do. Instead, it gives a structured way to compare the likely financial paths under your assumptions. By estimating monthly and lifetime totals, and by showing how inflation compounds over time, you can bring clarity to planning discussions with family members, care managers, or financial advisors.

Understanding the Two Care Models

Nursing home care typically provides 24/7 supervision, on‑site nursing staff, meals, medication management, and help with activities of daily living such as bathing, dressing, and mobility. Costs are usually quoted as a monthly rate and vary by room type (semi‑private vs private), location, and level of medical complexity.

In‑home care keeps the person in their own residence. Paid caregivers may provide help for a set number of hours per week or per day. Some families combine paid care with unpaid care from relatives or friends. Staying at home can also require extra spending on safety upgrades, transportation, home health supplies, or respite services.

Neither model is universally cheaper. If someone needs limited assistance, a few hours of home care can cost far less than full‑time facility care. But if they require round‑the‑clock supervision, paying for enough in‑home hours can exceed nursing home costs. The break‑even point depends on your hourly rate, required hours, and any extra home expenses.

The Core Cost Formulas

The calculator uses a monthly view because most people receive quotes in monthly terms. First, we estimate monthly in‑home cost from an hourly rate and weekly hours:

The factor 52/12 converts weekly spending into an average month. Nursing home monthly cost is entered directly. To project multi‑year totals, we apply an annual inflation rate to both paths. If inflation is i per year and the base annual cost in year 1 is C, then cost in year t is:

Worked Example

Suppose your local nursing home quotes $9,200 per month. In‑home care agencies in your area charge $32 per hour. You estimate 25 hours of paid help per week, and about $250 per month in additional home costs (medical supplies, transportation, and a short‑term safety upgrade loan). You expect care will be needed for 4 years, and you want to model 3% annual cost inflation.

Step 1: home care monthly cost. Weekly cost is $32 × 25 = $800. Converting to monthly gives $800 × (52/12) ≈ $3,467. Add $250 extras for a total of about $3,717 per month.

Step 2: annualize. Home care year‑1 annual cost is $3,717 × 12 ≈ $44,604. Nursing home year‑1 annual cost is $9,200 × 12 = $110,400.

Step 3: apply inflation. In year 2, multiply each annual cost by 1.03; by year 4, multiply by 1.03³. Summing across four years yields roughly $187k in home care costs versus $463k in nursing home costs.

In this example, in‑home care is significantly cheaper under the assumptions. But if the required hours rose toward full‑time, the picture could change quickly. That is why the break‑even calculation below is helpful.

Break‑Even Hours: When Does Home Care Cost the Same?

Because the main driver of home care cost is paid hours, you can solve for the weekly hours that make the two options equal. Rearranging the monthly cost formula gives:

Break‑even hours/week = (nursing home monthly cost − extra monthly home costs) ÷ (hourly rate × 52/12).

If your estimated paid hours are far below this level, staying at home is usually cheaper. If they are far above it, a facility may be financially comparable or less expensive.

Typical Cost Components to Consider

Families sometimes underestimate what belongs in each bucket. Nursing home prices may include meals and utilities that you are already paying for at home. In‑home costs may include periodic services rather than just a caregiver wage. Use the categories below to sanity‑check your inputs.

Limitations and Assumptions

This calculator is a planning tool, not a medical or legal recommendation. It assumes:

• The hourly rate and nursing home monthly rate remain comparable over time and grow with the same inflation rate.
• Paid caregiver hours stay constant each year; in reality, needs often increase.
• Extra home costs are averaged as a steady monthly amount, even though upgrades may be one‑time and care equipment may be episodic.
• The estimate does not include Medicaid eligibility rules, long‑term care insurance reimbursements, or tax credits, which can change net out‑of‑pocket cost.

For more precise decisions, consider running multiple scenarios: a “best case” where needs remain stable, a “moderate increase” scenario where hours rise each year, and a “high‑care” scenario where full‑time or live‑in support becomes necessary. The numbers here are a starting point for those conversations.