How to cut nursing home costs, according to experts

Nursing home care costs are soaring. For a private room in a nursing home, the average person spends nearly $10,000 per month — and almost $120,000 annually — and those costs are only expected to increase in the coming years.

With the average nursing home costs at twice the average U.S. salary, that's more than many seniors can comfortably pay. And for those who can, it can quickly deplete their retirement savings or the estate they plan to leave for their heirs.

Fortunately, there are a few strategies that may help reduce nursing home costs and help stretch those dollars further. 

Find out more about your long-term care policy options now.

How to cut nursing home costs, according to experts

If you need or want to cut down on the costs of nursing home care, here's what experts say you can do.

Open a long-term care insurance policy

One option for reducing these types of costs is to take out a long-term care insurance policy. These types of policies can help cover the costs of nursing homes and other necessary long-term care services. They can be stand-alone policies or hybrids, which combine life insurance and long-term care coverage.

"The most common plans sold today cover nursing homes, assisted living, adult day care and home care," says Mark Baron, owner of Baron Long-term Care Planning. 

You can buy long-term care insurance at nearly any age, but Baron says most people pull the trigger in their 50s. If you can buy earlier, though, it could make sense to do so. These policies require medical underwriting, so the healthier you are, the more affordable your premiums will typically be.

"Starting a policy earlier allows individuals to lock in lower premiums and ensure coverage, especially for those with a family history of chronic conditions or a higher risk of needing long-term care services," says Logan DuBose, a physician and co-founder of Olera, an elder care support platform. 

Explore how affordable long-term care insurance can be here.

Consider a shared room

Another option is to share a room in the nursing home, rather than choosing a private room. According to a study by Genworth Insurance, opting for a semi-private room in a nursing home can save you about $1,064 per month and $12,768 annually compared to a private room.

"Costs are lower," says Neal Shah, founder of CareYaya, a platform that connects seniors with caregivers in their area. "Plus, companionship can boost well-being."

And, it's true: Studies show that living with a roommate can lead to better sleep, less anxiety, and even healthier eating. 

Look at nursing home alternatives and community programs

You can also look to alternative care solutions. Having a family member manage your care can be ideal in certain cases, but if that's not possible, look to community groups that can lend a hand.

"Take advantage of community organizations, religious groups and local agencies that offer support services for seniors and caregivers at reduced or no cost," DuBose says. "The best place to start is at your local Area Agency on Aging, which is a group specializing in resources for individuals needing senior care."

Hiring an in-home caregiver may also be an option. Genworth's data shows these cost anywhere from $5,720 to $6,292 per month — reducing your potential costs by thousands of dollars. Assisted living facilities may also be an option and run, on average, from just over $2,000 to $5,350 per month. 

Leverage Medicaid

For those with low incomes, Medicaid can help defray the costs of nursing home care. And if you make too much for Medicaid, you may be able to qualify using the "spend down" method, which requires you to use a certain amount of your assets each year toward medical expenses. 

"if a nursing home is inevitable, then consider whether your loved one will qualify for Medicaid or will be private pay will be critical," says Chris Orestis, president of Retirement Genius and host of the Retirement Genius podcast. "Qualifying for Medicaid is based on having an income and asset level below the poverty line — which for many families will involve a very specific spend-down process to qualify."

If you think you may exceed the Medicaid threshold, talk to a financial professional about what your spend-down strategy would look like. They can help you plan for those costs well ahead of time and ensure your eligibility. 

The bottom line

With nursing home care costs on the rise, it's never too early to start planning for your long-term care needs. If you're not sure where to start, talk to an insurance agent about your options. They can walk you through the costs of a potential long-term care insurance policy or hybrid life insurance policy that can help. You should also shop around for your long-term care insurance company to ensure you're getting the best coverage and rate possible.