A family that placed their father, who is in his late 80s, in a nursing home paid approximately 2.8 million won per month for the first two months. Because he had not yet received an official long-term care grade at the time of admission, long-term care insurance did not apply, forcing the family to cover the full cost out of pocket.
After the father was officially assigned Long-Term Care Grade 2, the monthly bill dropped dramatically to around 950,000 won. Later, after the family separated his National Health Insurance eligibility from his son's and requested a qualification review from the National Health Insurance Service (NHIS), the monthly cost fell further to roughly 600,000 won. The father had no significant personal income or assets.
Although he remained in the exact same facility, his monthly expense decreased nearly fourfold. This shift occurred because a resident's final bill depends not only on their long-term care grade, but also on insurance eligibility, out-of-pocket reduction tiers, and non-covered expenses such as meals.
No Grade Means Full Price; Grade 2 Sets a 20% Baseline Copay
Without an officially designated long-term care grade, long-term care insurance cannot be applied to nursing home fees. Without support from the NHIS, the resident must cover all operational costs.
This does not mean individuals without a grade are legally barred from entering a nursing home. Some facilities accept seniors aged 60 or older who require care due to geriatric conditions, provided they pay the full unsubsidized amount. However, not every nursing home accepts residents without a grade, making it essential to confirm admission policies and monthly rates in advance. The initial 2.8 million won paid by the family was not a government-regulated rate, but rather the facility's standard unsubsidized fee.
The basic fee subsidized by long-term care insurance is known as the "benefit cost." As of 2026, the official daily benefit cost for an elderly care facility meeting standard staffing requirements is 93,070 won for Grade 1, 86,340 won for Grade 2, and 81,540 won for Grades 3 through 5. Some facilities may have lower rates depending on their staffing ratios.
If a senior with Grade 2 stays 30 days at a facility with a daily rate of 86,340 won, the total monthly benefit cost comes to 2,590,200 won. Without any income-based reductions, the resident pays a standard 20% copay—amounting to 518,040 won—while the NHIS covers the remaining 80%. The roughly 950,000 won the family paid after obtaining Grade 2 reflected this 518,040 won copay combined with uninsured out-of-pocket expenses, such as meals.
Understanding Facility Benefits and Out-of-Pocket Reductions
To secure a long-term care grade, an applicant must submit a request for long-term care certification to the NHIS. An NHIS evaluator visits the applicant’s residence to assess their ability to perform daily activities—such as eating, bathing, and dressing—alongside cognitive and behavioral changes. A specialized grading committee then determines a rating from Grade 1 to 5 or assigns a cognitive support grade based on the evaluation and a physician's statement.
It is crucial to distinguish between a long-term care grade and "facility benefits." While the grade measures the degree of care required, facility benefits represent the specific legal authorization to enter a nursing home with insurance subsidies.
Grades 1 and 2 automatically qualify for either in-home care benefits or facility benefits. Grades 3 through 5 are primarily designated for in-home care; however, if family caregiving is unavailable or living at home is unfeasible due to severe dementia symptoms, facility benefits may be granted upon special review. Individuals assigned a cognitive support grade are ineligible for facility benefits. When receiving certification results, families should check both the grade and the official care plan notice to confirm that facility benefits are approved.
For residents with approved facility benefits, the standard out-of-pocket copay is 20% of the benefit cost. However, if a senior's income and assets fall below specific thresholds, the NHIS applies an "out-of-pocket cost reduction" of 40% or 60%.
This reduction applies directly to the 20% copay rate rather than the entire bill. A 40% reduction lowers the resident's share from 20% to 12% of the total benefit cost, while a 60% reduction lowers it to 8%.
For a Grade 2 senior staying 30 days:
Standard 20% copay: 518,040 won
12% reduced rate (40% discount): 310,824 won
8% reduced rate (60% discount): 207,216 won
In the case mentioned above, separating the father's Health Insurance registration triggered an NHIS reassessment of his reduction eligibility, lowering his monthly copay to approximately 600,000 won when combined with meal fees. However, separating households or health insurance listings does not automatically guarantee a discount. The NHIS evaluates insurance contribution tiers, income, and overall assets together before approving a reduction.
Uninsured Costs and Contract Verification
Even when an out-of-pocket copay drops to 12% or 8%, certain expenses remain entirely uninsured.
Meal expenses—classified legally as "meal ingredient costs"—are not covered by long-term care insurance. Surcharges for private or double rooms, as well as personal haircut and grooming fees, must also be paid fully by the resident. Consequently, monthly bills vary across facilities even for seniors with identical grades staying for the same duration.
Before signing a contract, families should request a comprehensive monthly cost estimate reflecting insurance subsidies. It is advisable to verify the facility's daily benefit rate, confirm whether the resident's copay tier is 20%, 12%, or 8%, and calculate itemized monthly costs for meals, snacks, room upgrades, and grooming. Reviewing each line item on the sample invoice ensures a clear understanding of the true out-of-pocket commitment.
Securing a long-term care grade is the crucial first step toward managing nursing home expenses. However, determining the final cost requires verifying facility benefit authorization, reduction eligibility, and non-covered extras. Note that long-term care hospitals operate under National Health Insurance rather than Long-Term Care Insurance, using a completely different cost calculation structure for medical and caregiving fees.
In the next installment of this series, we will examine how to evaluate and select a trustworthy nursing home among facilities with similar pricing structures.
