What is long-term care?
Long-term care refers to a range of services that help people with chronic illnesses, disabilities, or the frailties of aging perform everyday activities — things like bathing, dressing, eating, using the bathroom, and moving around. Unlike short-term medical care that aims to treat and cure, long-term care focuses on maintaining quality of life over months or years.
According to the U.S. Department of Health and Human Services, about 70% of people turning 65 today will need some form of long-term care in their lifetime. The average duration of care is nearly three years, though about 20% of people will need care for longer than five years.
Long-term care is expensive — and it's one of the largest unplanned financial risks most families face. The national median cost of a private nursing home room exceeds \$100,000 per year, and costs have been rising at roughly 3–5% annually. Without a plan, these costs can rapidly deplete retirement savings and leave families scrambling to cover care.
Who is most likely to need long-term care? Age is the biggest factor — the older you are, the more likely you'll need help. Women outlive men on average and are more likely to need extended care. People with chronic conditions like Alzheimer's, Parkinson's, diabetes, or heart disease are at higher risk. Family history and lifestyle factors also play a role.
Planning ahead — whether through long-term care insurance, hybrid life/LTC policies, savings, or Medicaid planning — is the key to protecting your assets and ensuring you can choose the care you want, rather than defaulting to whatever you can afford in a crisis.
Types of long-term care
**In-Home Aide (Homemaker Services)** A homemaker aide helps with non-medical daily tasks: cooking, cleaning, laundry, running errands, and companionship. This is the least expensive form of in-home care and is ideal for people who are mostly independent but need help with household tasks. Homemaker services are typically billed by the hour.
**In-Home Health Aide** A home health aide provides hands-on personal care — bathing, dressing, toileting, medication reminders — and may have basic medical training. This is a step up from homemaker services and is appropriate when someone needs regular personal care assistance but not full-time nursing. Home health aides are also billed hourly and are in high demand nationwide.
**Adult Day Health Care** Adult day programs provide structured activities, meals, socialization, and health monitoring in a community setting during daytime hours. This option works well for people who live with family caregivers who work during the day. It's significantly more affordable than residential care options.
**Assisted Living Facility** Assisted living communities provide private or semi-private apartments, meals, housekeeping, 24-hour staff, and help with activities of daily living. Residents maintain more independence than in nursing homes. Costs vary significantly by state and amenity level. Assisted living is typically private-pay — Medicare does not cover it.
**Nursing Home (Semi-Private Room)** Skilled nursing facilities provide round-the-clock medical and personal care for people with significant health needs. Semi-private rooms are shared with one other resident and are less expensive than private rooms. Medicare covers short-term skilled nursing stays after a qualifying hospital stay, but does not cover long-term custodial care.
**Nursing Home (Private Room)** A private nursing home room offers the same level of medical care as semi-private but with greater privacy. Private rooms can cost 10–20% more than semi-private. Medicaid covers nursing home care for those who qualify financially, but may limit facility choice.
**Memory Care / Dementia Care** Memory care units are specialized secured environments for people with Alzheimer's disease and other forms of dementia. They feature specially trained staff, structured routines, and safety features to prevent wandering. Memory care typically costs 20–40% more than standard assisted living due to the specialized programming and higher staff-to-resident ratios.
How costs are projected
This calculator uses AI to look up current market rates for your selected state and care type, then applies compound inflation to project future costs.
**Inflation adjustment formula:** \`\`\` Inflation-Adjusted Total = Annual Cost × ((1 + r)^n - 1) / r \`\`\` Where: - **r** = annual inflation rate (as a decimal) - **n** = number of years in the projection
This is the present-value annuity formula, which accounts for the fact that costs increase each year — so year 10 of care costs significantly more than year 1.
**Why inflation matters so much for LTC:** Long-term care costs have historically risen faster than general inflation — driven by labor shortages in the care industry, rising regulatory requirements, and increasing demand as the baby boomer generation ages. A 3% annual inflation rate means costs double roughly every 24 years. At 5%, they double in about 14 years.
If you're planning 10-15 years out, the inflation-adjusted total can be 30-60% higher than today's rates suggest — which is why the inflation-adjusted projection in this calculator is the number you should plan around.
**Cost data sources:** Our AI uses data from the Genworth Cost of Care Survey, the American Council on Aging, and state-level Medicaid data to generate regional estimates. Costs vary significantly by urban vs. rural location within a state.
How to use this calculator
1. Select your state from the dropdown — costs vary significantly by region, so state selection is the most important input. 2. Choose the care type that best matches your situation or planning scenario. If you're unsure, "Assisted Living Facility" and "Nursing Home (Private Room)" are the most commonly planned-for options. 3. Set the projection period using the slider — how many years do you want to plan for? The average person who needs LTC uses it for about 3 years, but planning for 5-10 years provides a safety margin. 4. Adjust the annual inflation rate. The default is 3%, which reflects recent LTC cost trends. Consider using 4-5% for more conservative planning. 5. Click "Calculate Long-Term Care Costs" and wait for the AI to retrieve current market data for your selection. 6. Review the annual and monthly cost ranges, the total projected cost without inflation, and the inflation-adjusted total — which is the number to use for financial planning. 7. Read the coverage recommendation and cost factors for your specific state and care type. 8. Click "Start Over" to run a new estimate with different parameters.
Long-term care insurance
Long-term care insurance (LTCI) pays a daily or monthly benefit when you need qualifying care — typically when you can't perform two or more activities of daily living (ADLs) or have a cognitive impairment. Policies differ in elimination periods (how long you wait before benefits begin), daily benefit amounts, benefit periods, and inflation protection.
**When to buy:** Premiums are lowest when you're healthy and in your 50s. By your mid-60s, premiums rise sharply and some people are declined coverage due to health conditions. Buying in your late 40s to mid-50s is generally considered the sweet spot.
**Hybrid policies:** Hybrid life/LTC or annuity/LTC policies have become popular because they guarantee a death benefit if you don't use the LTC coverage — solving the "what if I never need it" objection to traditional LTCI. These policies typically require a larger upfront premium or lump-sum payment.
**Medicaid planning:** Medicaid pays for nursing home care for people who meet financial eligibility requirements — generally meaning you've spent down most of your assets. Medicaid planning involves legally structuring assets to qualify while preserving wealth for a spouse or heirs. This is a complex legal area requiring an elder law attorney.
**Self-insuring:** Some high-net-worth individuals choose to self-insure by setting aside a dedicated pool of assets for LTC costs. This requires significant assets — typically \$500,000 or more earmarked specifically for care.
**Veterans benefits:** Veterans and surviving spouses may qualify for VA Aid & Attendance benefits, which can pay for in-home care or assisted living. This benefit is underutilized and worth investigating if you or a spouse served in the military.
FAQs
Q: How much does long-term care cost on average? A: Nationally, the median annual cost ranges from about \$20,000 for adult day health care to over \$100,000 for a private nursing home room. Assisted living averages around \$50,000-\$60,000 per year nationally, though costs in high-cost states like California, New York, and Massachusetts are significantly higher. In-home aide services typically run \$25-\$35 per hour depending on location.
Q: Does Medicare cover long-term care? A: Medicare covers short-term skilled nursing care following a qualifying hospital stay — up to 100 days, with significant cost-sharing after day 20. It does not cover custodial (non-medical) long-term care, which is what most people actually need. Medicare also does not cover assisted living or home care that isn't medically necessary. Many people are surprised to learn this, so planning ahead with insurance or savings is essential.
Q: What's the difference between assisted living and a nursing home? A: Assisted living facilities provide help with daily activities and some health monitoring, but residents are generally more independent and have their own private or semi-private apartments. Nursing homes (skilled nursing facilities) provide 24-hour medical care and are for people with significant, ongoing medical needs. Nursing homes are more heavily regulated and typically more expensive. Memory care is a specialized form of assisted living for dementia patients.
Q: When should I start planning for long-term care? A: Ideally in your 40s or early 50s, when you're still healthy enough to qualify for long-term care insurance at reasonable rates. However, it's never too late to start planning — even in your 60s, you have options including hybrid insurance policies, Medicaid planning, and savings strategies. The sooner you have a plan, the more options you have.
Q: How does inflation affect long-term care costs? A: Long-term care costs have historically risen 3-5% per year, driven by labor costs, regulatory requirements, and growing demand. Over a 20-year period, a 4% annual inflation rate means costs more than double. If assisted living costs \$60,000 per year today, it could cost over \$130,000 per year in 20 years at that rate. This is why inflation-adjusted projections are critical for meaningful financial planning.
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