How to Choose Between Assisted Living and a Nursing Home for Aging Parents

Stephanie Stearns is an assistant director of Insurance Solutions at Northwestern Mutual.

Like most people, your parents are likely picturing a long, healthy, and happy retirement—and it's a wonderful gift that you're taking steps to support them. With a little planning, you can have confidence their hope for the future remains intact, even if they need extra care down the road. Options like long-term care insurance can ease financial worries by covering everything from home aide visits to assisted living or nursing home expenses.

As you consider a move for your loved ones, it’s essential to understand the differences between assisted living communities and skilled nursing facilities (often called nursing homes). These options differ significantly in the level of care they provide and their overall cost. While your parents’ preferences are important, their physical needs, safety, and financial realities will ultimately guide you to the best choice. Here are the main points to keep in mind as you help make the decision.

Considering options for long-term care

Long-term care services encompass different levels of assistance for those who need help with self-care tasks we perform every day, known as activities of daily living (ADLs). This includes helping with things like bathing and dressing to round-the-clock supervision.

At first, friends and family often provide care within the person’s home. But there may come a time when professional assistance is needed. This may be the case if unpaid family caregivers can no longer meet their loved one’s needs.If this happens, a healthcare provider will assess their ability to perform daily activities to decide the necessary level of support in assisted living or a nursing home.²

Typically, candidates for assisted living facilities should be able to walk or transfer with limited assistance, use a cane or walker, eat independently, and not require complex medical treatments like IV therapy, wound care, ventilators, or regular injections by a nurse. Cognitively, assisted living facilities residents should be able to participate in their own care, follow directions, and not pose a danger to themselves or others.

Differences between nursing homes and assisted living facilities

Both settings provide long-term care with your parents living within the facility, but here are the main differences.

Assisted living facilities

Also known as residential care facilities, these communities are designed for people who can manage some daily tasks despite physical or cognitive challenges but do not need nursing-home-level long-term care. Assisted living is often chosen for extra support and a simpler life. People move sooner for safety (especially fall risk), more social connections, and fewer hassles (like home maintenance). Moving a bit earlier can help you avoid a rushed decision after a hospital stay or a fall. Assisted living facilities vary in size and type, but they all offer housing and services in a secure, home-like setting.

Accommodations range from studio to two-bedroom apartments and include personal care and some health-related services. Residents get help with daily tasks like eating, dressing, bathing, taking medicine, monitoring health, and planning care. They also have staff on site, often with a nurse on call for limited skilled services. Since not all communities offer every level of care, such as specialized dementia care, it's important to verify available services. Consider asking about topics like these:

• What services are included in each level of care?
• How is the level of care initially determined and adjusted over time?
• How are transitions between care levels managed?

Northwestern Mutual's What Care Costs study shows that annual assisted living costs in the U.S. average $64,920 for a studio, $70,488 for a one-bedroom, and $74,280 for a two-bedroom unit.³ But costs vary by location and the level of care needed. For example, rates for a one-bedroom unit are highest in Maryland and New Jersey and lowest in Minnesota and Mississippi. You can search by zip code to find local rates for your parents.

Nursing homes

When your parents’ needs exceed what assisted living facilities can offer, a skilled nursing facility is the appropriate choice. Nursing homes provide 24/7 medical and personal care and require a doctor's order for admission and treatment. This may be right for someone with ongoing healthcare needs who requires more constant supervision—and increasing assistance with daily activities. This environment provides an in-house nursing team and specialized medical services for tube feeding, skilled catheter care, and two-person lifts, as well as ventilator and tracheostomy care.

In the U.S., the average daily cost of nursing home care is $387 for a private room, resulting in annual costs of $141,255, according to Northwestern Mutual's annual What Care Costs study.³

Questions to ask before choosing an assisted living facility or nursing home

Choosing between assisted living and a nursing home is a major decision. Begin by considering the level of care your loved one currently needs—and remember that these needs can change over time. Below are some important factors.

Levels of care

Assisted living communities differ in the levels of care they offer, so it's key to know what services are available, what monthly fees are tied to each level, and any physical or cognitive requirements residents must meet. For example, consider asking:

• What services are included in each care level?
• How is the care level initially determined and adjusted over time?
• How are transitions between care levels managed?
• Which care levels can be provided in the same apartment, and which require moving to a different part of the community or facility?

In a skilled nursing facility, care ranges from basic daily assistance to intensive medical support, depending on nursing care and specialized treatments. A doctor assesses the patient's medical needs, ADL dependence, cognitive status, and required therapies to determine the care level, which can change as the patient's condition evolves. Note that non-medical help with ADLs like bathing, dressing, and eating isn't covered by Medicare.⁴

Resident care

Both skilled nursing facilities and assisted living facilities are person centered but serve different needs: Assisted living supports independence and community, helping with daily tasks like meals, bathing, and medications, while skilled nursing provides 24/7 round-the-clock medical and rehabilitation care for people with more complex medical needs. Consider:

• Care philosophy: Look for resident-first, whole-person care—physical, mental, social, and spiritual—with family involvement.
• Personalized care plans: Ask who contributes to the plan and how often it’s updated as needs change.
• Medication management: Review how meds are given and supervised, especially for controlled medications.
• Quality and accountability: Look into how the facility collects and responds to resident feedback.
• End-of-life care: Although it’s tough to think about, understand what is provided.

Finances

As Medicare.gov points out, "Medicare doesn’t pay for long-term care.”⁵ This means assisted living facilities typically require private payments—and most health insurance plans, including Medigap, don't cover nursing home care for non-skilled services like assistance with daily activities or supervising someone with cognitive impairments.

To cover these costs, common options include setting aside savings specifically for future care needs, purchasing private long-term care insurance well in advance of the move, or relying on family contributions. Medicaid might be an option, but it's generally available only to those with very limited income and assets.

According to Northwestern Mutual's annual What Care Costs study,⁶ the U.S. national averages for skilled nursing (private room) experienced the largest average cost of care increase (11.1 percent) from 2024 to 2025. The smallest increase in U.S. national average cost of care was seen in the registered nurse per-visit rate for home health care (3.1 percent). An assisted living facility one bedroom unit experienced a reported increase in cost of 6.6 percent.

Here are questions you can ask to get a clearer understanding of the costs:

• Total monthly cost: Make sure you know what’s included and what’s considered extra. In skilled nursing facilities, most services are included, leading to higher rent than assisted living, where monthly fees usually cover only room and board. To plan effectively, ask how often fees increase and the average rise over the past three years.
• Entrance fees: Check if there's a fee and if it's refundable to understand the financial commitment and flexibility.
• Financial assistance: Explore financial assistance options like grants, Medicaid, Veterans Affairs benefits, community aid, or payment plans.
• Billing policies and insurance: Find out the consequences of missed or late payments and ask about the facility's experience with long-term care insurance companies. Knowing this helps you manage finances smoothly and ensures insurance benefits are used effectively. Understand this complex topic, which could be a game changer if your loved one isn’t financially prepared for long-term care costs.

Licensing and staffing

Unlike skilled nursing facilities, assisted living facilities aren't federally regulated. But the Centers for Medicare & Medicaid Services provides a free Care Compare website that rates sites for health inspections, staffing levels, and quality measures. If you're looking to do more in-depth research, consider the independent, nonprofit accreditor CARF^® International’s Guide to Selecting an Assisted Living Facility.

As you evaluate your parents’ options, look into the following:

• Staff-to-resident ratio: Review state regulations and facility policies. Assisted living facilities usually offer minimal to moderate training, while skilled nursing facilities have standardized, federally defined training requirements.
• On-site medical team: Assisted living facilities usually lack 24/7 medical teams, offering limited medical support by nurses or medication aides. In contrast, skilled nursing facilities have physician supervision and detailed care records. Assisted living facilities rely on visiting medical professionals for routine checks and emergencies.

Living accommodations

While both settings strive for comfort, the environments are designed for different levels of clinical support. Assisted living units are often designed as private apartments to foster a sense of home and autonomy, whereas skilled nursing layouts prioritize medical accessibility and safety. Consider these topics:

• Living spaces: Assisted living facilities feel homier than skilled nursing facilities, offering private apartments with bathrooms, kitchenettes, and living areas. Check if your parents can bring their own furniture. In skilled nursing facilities, shared rooms are typical, so inquire about private rooms for more space and privacy if your parents can afford it.
• Dining services: Request sample menus and ask about any special dietary needs your parents have. Dining in an assisted living facility is social and flexible, like a restaurant or home. In a skilled nursing facility, dining is more structured, focusing on nutrition, schedules, and supervision.
• Mobility options: See if all inside and outside spaces can easily accommodate wheelchairs, walkers, and even a hospital bed.
• Safety and security measures: Look for grab bars, emergency call systems, and measures to keep possessions safe.
• Pet policy: If your loved one has a pet, ask if they can bring it. Skilled nursing facilities rarely allow permanent pets. Also, inquire about fees, deposits, outdoor exercise areas, and contingency plans.
• Housekeeping services: Assisted living facilities typically provide routine, light housekeeping to support an independent lifestyle. A skilled nursing facility provides frequent, comprehensive, clinical-grade cleaning and disinfection.

Opportunities for socialization

Social engagement is vital in both settings, but the structure of activities often reflects the residents' mobility and health status. Assisted living focuses on vibrant, active community integration and may offer arts and crafts, educational programs, fitness classes, entertainment, and games for residents to join if they wish. Your parents may even be able to take a bus or van on independent outings organized by the assisted living facility.

Skilled nursing provides more structured, supervised programming tailored to specific clinical or cognitive needs. Picture group exercises led by therapists, basic games, religious services, musical performances, and holiday parties. Consider:

• Opportunities for residents to connect: Ask about entertainment, social programming, and exercise activities.
• Access to outdoor spaces: Consider access to sunlight and nature.
• General atmosphere: Tour and notice whether or not the residents seem happy and well cared for.
• Transportation: In assisted living, residents choose activities based on personal interests. Check how your parents could get to nearby attractions, shops, or events.
• Visiting hours: The main difference is that assisted living facilities typically have set visiting hours, like 9 a.m. to 8 p.m., while skilled nursing facilities offer more flexibility.

Choosing the right long-term care setting for aging parents

When all is said and done, you want the people you love to age comfortably and live their best lives for as long as possible. Long-term care in a residential facility may become part of that equation at some point, whether it’s an assisted living community or a nursing home.

Whatever route you choose, the financial commitment is an important factor. Planning for unexpected costs like long-term care helps maintain independence and ensures that your loved ones receive needed care in their preferred setting. It's essential for securing your family's future.

Your Northwestern Mutual financial advisor can help you build a plan with growth and protection strategies to make sure your finances can adapt to life’s changes. Your advisor can also help your family preserve what matters most from generation to generation.