In this article
- What Long-Term Care Actually Costs
- Why Costs Vary So Much by State
- Long-Term Care Costs Are Rising Faster Than Inflation
- Who Pays for Long-Term Care?
- Long-Term Care Insurance: Is It Worth It?
- Alternatives to Traditional LTC Insurance
- The Odds: How Likely Are You to Need Care?
- What Most People Get Wrong
- How Long-Term Care Costs Fit Into Your Retirement Plan
- Frequently Asked Questions
A private nursing home room now costs a median of $10,798/month — $129,575/year — and 70% of people turning 65 will need some form of long-term care. Yet most Americans have no plan to pay for it. Medicare covers almost nothing. Long-term care insurance covers fewer than 3% of the population. And Medicaid requires you to spend nearly everything you own before it kicks in. This guide lays out the real costs, who pays, and how to protect yourself.
What Long-Term Care Actually Costs
Long-term care costs vary dramatically by type of care, with a private nursing home costing more than five times what adult day care costs. Here are the current national median costs from the CareScout 2025 Cost of Care Survey (the most comprehensive source, collecting 25,000+ rates nationwide):
| Type of care | Monthly cost | Annual cost |
|---|---|---|
| Nursing home — private room | $10,798 | $129,575 |
| Nursing home — semi-private room | $9,581 | $114,975 |
| Home health aide (44 hrs/week) | $6,673 | $80,080 |
| Homemaker services (44 hrs/week) | $6,673 | $80,080 |
| Assisted living facility | $6,200 | $74,400 |
| Adult day health care (5 days/week) | ~$2,058 | $24,700 |
The hourly rate for non-medical caregivers (home health aides and homemaker services) is $35/hour in 2026. Private-duty nursing is significantly higher at $90/hour median.
The Total Bill Over a Typical Care Need
The average person who needs long-term care requires it for 3.2 years (women average 3.7 years; men average 2.2 years). Here's what that means in dollars:
| Care type | Average duration | Estimated total cost |
|---|---|---|
| Nursing home (private) | 3.2 years | ~$414,640 |
| Nursing home (semi-private) | 3.2 years | ~$367,920 |
| Assisted living | 2 years (median stay) | ~$148,800 |
| Home health aide (full-time) | 3.2 years | ~$256,256 |
| Adult day care | 3.2 years | ~$79,040 |
For many families, the realistic scenario isn't one type of care but a progression: home care first, then assisted living, then a nursing home. A common trajectory might cost $300,000–$500,000 total — and longer stays for conditions like Alzheimer's (which affects 1 in 9 Americans over 65) can exceed $700,000.
Estimate your costs: Our long-term care cost calculator projects your expected costs based on care type, location, duration, and inflation rate.
Why Costs Vary So Much by State
Long-term care costs are driven primarily by local labor markets and real estate, which means where you live (or where you receive care) can change the bill by a factor of 5.
Most Expensive States (Nursing Home, Semi-Private Room)
| State | Annual cost |
|---|---|
| Alaska | ~$364,452 |
| Massachusetts | ~$195,546 |
| Hawaii | ~$191,374 |
| Connecticut | ~$187,848 |
| Vermont | ~$164,851 |
Least Expensive States
| State | Annual cost |
|---|---|
| Texas | ~$65,700 |
| Missouri | ~$79,264 |
| Oklahoma | ~$81,087 |
| Louisiana | ~$85,747 |
| Arkansas | ~$89,035 |
The difference between Alaska and Texas is nearly $300,000/year for the same type of care. Even assisted living shows extreme variation — from $3,642/month in Wyoming to $7,250/month in Washington, D.C.
For retirees considering relocation, long-term care costs should be factored alongside taxes and cost of living. A state with no income tax but $130,000/year nursing home costs may not be the bargain it appears. See our guide on the best states to retire for taxes for the broader picture.
Compare costs by state: Our nursing home cost calculator and assisted living cost calculator show median costs for your specific state and care type.
Long-Term Care Costs Are Rising Faster Than Inflation
Long-term care inflation has consistently outpaced general consumer inflation, driven by labor shortages, staffing mandates, and growing demand from an aging population.
| Period | LTC cost growth | General inflation (CPI) |
|---|---|---|
| 5-year average (2019–2024) | ~7–8% annually | ~3.5% annually |
| 2024 (nursing home, private room) | +9% | +2.9% |
| 2025 (assisted living) | +5% | ~2.5% |
| Historical long-run average | 3–5% annually | ~2.5% annually |
What this means for planning: A 55-year-old today who might need nursing home care at 80 should budget for costs roughly 2–3× current levels if the historical 4% growth rate continues. A $130,000/year nursing home today could cost $260,000–$350,000/year by 2051.
The AARP found that median household income for Americans 65+ grew only 22% over the same five-year period that care costs rose nearly 50% — a widening affordability gap that makes planning more urgent than ever.
Who Pays for Long-Term Care?
This is where most people's assumptions break down. The three most common expectations — "Medicare will cover it," "my insurance will cover it," and "I'll figure it out later" — are all wrong for most people.
Medicare: Almost Nothing
Medicare is health insurance for acute medical care. It does not cover long-term custodial care — the help with bathing, dressing, eating, and daily activities that makes up the bulk of long-term care costs. What Medicare does cover:
| Coverage | Details |
|---|---|
| Skilled nursing facility (SNF) | Up to 100 days per benefit period |
| Days 1–20 | $0 (Medicare pays 100%) |
| Days 21–100 | $217/day coinsurance (you pay) |
| After day 100 | All costs (Medicare pays nothing) |
Requirements: You must have a qualifying 3-day inpatient hospital stay (observation days don't count), be admitted to a SNF within 30 days of discharge, and need skilled nursing or therapy — not just custodial care. Once you "plateau" and stop improving, coverage ends.
Bottom line: Medicare might cover a few weeks of rehabilitation after a hip replacement or stroke. It will not pay for the assisted living facility or nursing home stay that most people associate with "long-term care." For more on what Medicare covers, see our guide on what is Medicare Part A, B, C, and D.
Medicaid: Only After You Spend Down
Medicaid does cover long-term care — but only for people who have exhausted nearly all their assets. The rules are strict:
| Requirement | 2026 limit |
|---|---|
| Individual asset limit | $2,000 (most states) |
| Community Spouse Resource Allowance | Up to $162,660 |
| Look-back period | 60 months (5 years) |
| Home equity exemption | ~$713,000 (if spouse lives there) |
The look-back period: Medicaid reviews all asset transfers from the previous 5 years. If you gave $50,000 to your children three years before applying, Medicaid imposes a penalty period during which it won't pay for care. This makes last-minute asset transfers extremely risky.
Exempt assets: Your primary residence (if a spouse or dependent lives there), one vehicle, personal belongings, and prepaid irrevocable burial arrangements are typically protected. Everything else — savings, investments, second properties — must be spent down first.
Long-Term Care Insurance: Covers Few People
Only about 7–8 million Americans — roughly 3% of the population — carry long-term care insurance. Premiums are high, many applicants are declined for health reasons, and existing policyholders face ongoing rate increases of 20–50%.
Out of Pocket: The Reality for Most
The majority of Americans pay for long-term care from savings, home equity, and family support. About 48% of adults turning 65 will pay for at least some LTC out of pocket. This is why understanding the costs — and planning for them — is so important.
Long-Term Care Insurance: Is It Worth It?
Current Premiums (2026)
| Profile | Annual premium |
|---|---|
| Single man, age 55 | ~$2,200 |
| Single woman, age 55 | ~$3,750 |
| Couple, both age 55 (combined) | ~$5,010 |
| Single woman, age 60 | ~$4,450 |
| Couple, both age 65 (combined) | ~$7,030 |
Women pay significantly more because they live longer and file more claims. Adding 3% compound inflation protection — which most experts recommend — roughly doubles these premiums.
Application Decline Rates
| Age at application | Decline rate |
|---|---|
| 40s | 12% |
| 50s | 20%+ |
| 60–64 | 30% |
| 70–74 | 47% |
The window for buying long-term care insurance narrows quickly. If you wait until you need it, you almost certainly can't get it. The ideal purchase age is mid-50s — old enough to take it seriously, young enough to qualify and lock in lower premiums.
When Traditional LTC Insurance Makes Sense
- You have $300,000–$2 million in assets (too much to qualify for Medicaid, not enough to easily self-insure)
- You're in good health in your 50s and can qualify
- You want to protect a spouse's financial security
- You have a family history of conditions requiring extended care (Alzheimer's, Parkinson's, stroke)
When It Doesn't Make Sense
- You have under $200,000 in assets (Medicaid will cover you relatively quickly)
- You have $2 million+ in liquid assets (self-insuring may be more efficient)
- You're already 65+ with health issues (premiums are high and approval is unlikely)
Compare insurance options: Our long-term care insurance calculator estimates premiums and benefit values based on your age, health, and coverage level.
Alternatives to Traditional LTC Insurance
Hybrid Life/LTC Policies
The fastest-growing segment of the market. Hybrid policies combine life insurance with long-term care benefits:
- If you need care: The policy pays LTC benefits, drawing from the death benefit and sometimes extending beyond it
- If you don't need care: Your beneficiaries receive the full death benefit
- Premiums are guaranteed — unlike traditional LTC policies, they cannot increase
- Typically funded with a single lump-sum payment ($50,000–$200,000) or 10 years of premiums
The trade-off: hybrid policies provide less LTC coverage per premium dollar than traditional LTC insurance, but they guarantee you get value whether or not you need care.
Self-Insuring
If you have $2 million+ in liquid assets, earmarking $300,000–$500,000 for potential long-term care may be more cost-effective than paying decades of insurance premiums. The risk: care costs can exceed your projections, especially for extended cognitive decline lasting 5–10 years.
Health Savings Accounts (HSAs)
HSAs offer a triple tax advantage — pre-tax contributions, tax-free growth, and tax-free qualified withdrawals — that makes them one of the most efficient ways to save for healthcare costs in retirement. In 2026, you can use HSA funds to pay for qualified long-term care insurance premiums (up to $6,200 for age 71+) and qualified LTC expenses tax-free.
New for 2026: penalty-free retirement account distributions up to $2,600 are available specifically for long-term care insurance premiums.
VA Aid and Attendance
Veterans who served 90+ days of active duty (including at least 1 day during a wartime period) may qualify for Aid and Attendance benefits to help pay for long-term care:
| Beneficiary | 2026 monthly benefit |
|---|---|
| Single veteran | Up to $2,424 |
| Married veteran | Up to $2,874 |
| Surviving spouse | Up to $1,558 |
These benefits don't require a service-connected disability — they're needs-based. The net worth limit is $163,699 (primary home and one vehicle are exempt).
The Odds: How Likely Are You to Need Care?
Understanding the probability helps frame how much planning is appropriate:
| Statistic | Value |
|---|---|
| People turning 65 who will need some LTC | 70% |
| Women who will need LTC | 56% |
| Men who will need LTC | 46% |
| Average duration of care needed | 3.2 years |
| People who will need care for 5+ years | 20% |
| People who will never need LTC | ~30% |
The Alzheimer's factor: 7.2 million Americans age 65+ are living with Alzheimer's disease in 2026 — 1 in 9 people in that age group. Alzheimer's and other dementias are the leading driver of extended long-term care needs, with an average care duration of 4–8 years and costs that can exceed $350,000.
The 70% probability makes long-term care one of the most likely major expenses in retirement — more likely than a major home repair, more likely than a market crash in your first year of retirement, and far more expensive than most people estimate.
What Most People Get Wrong
"Medicare Will Cover My Nursing Home"
It won't. Medicare covers up to 100 days of skilled nursing after a hospital stay — and most people use far fewer days because coverage requires ongoing improvement. The years-long custodial care most people picture when they think "nursing home" is not covered at all.
"I'll Just Move in with My Kids"
Family caregiving is common, but it comes with enormous costs. The average family caregiver provides 24 hours/week of care and loses approximately $522,000 in lifetime wages and Social Security benefits. Adult children caring for aging parents often sacrifice their own retirement savings in the process. Even with family help, most people eventually need professional care — the question is when, not whether.
"I Can Plan for This Later"
Long-term care insurance underwriting tightens dramatically after age 60, with nearly half of applicants over 70 being declined. Medicaid planning requires a 5-year look-back period. The best time to plan is in your 50s — the worst time is when you actually need care.
"It Won't Happen to Me"
With 70% of people over 65 needing some form of long-term care, this is the least safe bet in retirement planning. Even if you're healthy at 65, the odds of needing assistance by 85 are substantially higher. Planning for the possibility doesn't mean expecting the worst — it means being prepared for the likely.
"Assisted Living Is Affordable"
At $6,200/month ($74,400/year), assisted living is less expensive than a nursing home — but it's still a major financial commitment. And 60% of assisted living residents eventually need a higher level of care, often transitioning to a skilled nursing facility. The total cost across both levels of care often exceeds what families budgeted for assisted living alone. For a broader view of healthcare spending in retirement, see our guide on how much healthcare costs in retirement.
How Long-Term Care Costs Fit Into Your Retirement Plan
Long-term care is the largest uninsured risk most retirees face — potentially larger than the cost of housing, healthcare, or even the total portfolio withdrawals over a 25-year retirement. A three-year nursing home stay can consume an entire $400,000 retirement account. A five-year stay with Alzheimer's care can exhaust even a well-funded plan.
The strategies that protect against this risk — insurance, self-funding, Medicaid planning, hybrid policies — all require decisions years before care is needed. If you want to model how a long-term care event would affect your overall retirement timeline, the Plan Builder lets you add potential care costs to your projections and see whether your plan survives different scenarios.
Frequently Asked Questions
How much does a nursing home cost per month in 2026?
The national median cost is $10,798/month for a private room and $9,581/month for a semi-private room, according to the CareScout 2025 Cost of Care Survey. Costs vary dramatically by state — from roughly $5,500/month in Texas to over $30,000/month in Alaska. These costs have been rising 4–9% annually, well above general inflation.
Does Medicare pay for long-term care?
No. Medicare covers up to 100 days of skilled nursing facility care after a qualifying 3-day hospital stay, but it does not cover long-term custodial care — the help with bathing, dressing, eating, and daily activities that most people need. After day 20, you pay $217/day in coinsurance; after day 100, Medicare pays nothing.
How much does long-term care insurance cost?
Premiums vary by age, gender, and coverage level. A 55-year-old couple can expect to pay approximately $5,010/year combined for traditional long-term care insurance. Adding 3% compound inflation protection roughly doubles the cost. Women pay more due to longer life expectancy and higher claims rates. Application decline rates rise sharply after age 60.
What is the Medicaid look-back period?
Medicaid reviews all asset transfers from the 60 months (5 years) before your application. Gifts, transfers to family members, and below-market sales during this period trigger penalty periods when Medicaid won't pay for care. California is an exception with a 30-month look-back. This is why Medicaid planning should begin at least 5 years before potential need.
How long does the average person need long-term care?
The average is 3.2 years (women: 3.7 years, men: 2.2 years). About 20% of people who need care require it for 5+ years. The median nursing home stay is approximately 14 months, while the average assisted living stay is 22–28 months. Many people progress through multiple levels of care — home care, then assisted living, then nursing home.
What is a hybrid life/LTC insurance policy?
A hybrid policy combines life insurance with long-term care benefits. If you need care, it pays LTC costs from the death benefit. If you never need care, your beneficiaries receive the full death benefit. Unlike traditional LTC insurance, premiums are guaranteed and cannot increase. They're typically funded with a lump sum ($50,000–$200,000) or over 10 years.
Can I use my HSA to pay for long-term care?
Yes. HSA funds can pay for qualified long-term care expenses and qualified LTC insurance premiums (up to $6,200 tax-free for age 71+ in 2026) without any tax penalty. New in 2026, you can also take penalty-free distributions up to $2,600 from retirement accounts specifically for LTC insurance premiums. HSAs are one of the most tax-efficient tools for funding potential long-term care costs.
This article is for educational purposes only and is not personalized financial advice. Long-term care planning involves complex legal and financial decisions — consider consulting an elder law attorney or fee-only financial advisor. Sources: CareScout 2025 Cost of Care Survey, ACL.gov, Medicare.gov, AALTCI 2026 Price Index, Medicaid Planning Assistance, AARP Long-Term Care Affordability Report, VA.gov.
Last updated: October 2026