Will you need long-term care? Here’s what the math says
The number of Americans living in the 85th hour is expected over the next 25 years in the next 25 years, the Census Bureau projects, leading to long-term spending.
Long-term care involves helping an older person manage activities of daily living, including everything from shopping and preparing meals to getting dressed and using the bathroom. Adults over the age of 7 will need some level of help, according to the US Department of Health and Human Services.
““The longer you live, the more likely you are to need long-term care,” said Jesse Slome, CEO of the American Association of Long-Term Care Insurance. That help can range from unpaid, temporary care from family members to saving thousands of dollars a month for a nursing home.
Understanding the last opportunity requires long-term care and educating your options is a critical part of planning for long-term growth, experts say. However, research suggests many Americans do not. Less than half of adults say they have had a serious conversation with a loved one about who will care for them if they need help with daily activities or how they will pay for care, according to the nonprofit health policy group.
How many people need long-term care?
Despite much media coverage of the long-term care crisis, most seniors still underestimate their risk of needing more care as they get older.
While most older adults will be able to access help a few times a week, more than half (52%) of adults over the age of 65, according to a recent report from the Center for Retirement Research at Boston College. People with the highest needs need help with two or more daily activities or have a diagnosis of dementia.
The risk of this intensive care varies by education, race and gender. Another 56% of women will need more, longer-term care, compared to 46% of men, the researchers found.
Black and Hispanic seniors also outnumber white seniors in needing the most care, with 57 percent of each group needing it compared to 50% of white seniors. Across races, those with college degrees are less likely to need it than those with a high school diploma.
How do people pay for long-term care?
Forty-six percent of seniors say they think Medicare will pay for a nursing home if they need it, according to a survey from AARP. That, experts say, is one of the biggest misunderstandings on the issue: Medicare doesn’t pay for long-term care.
Long-term care, nearly three times, is actually handled with unpaid help from family members, a 2021 study from the Center for Retirement Research found. 33% of caring hours are provided for 65 people and the elderly from children, and another 17% from partners.
If you end up needing professional care, the price tag can add up. By 2024, the average annual cost for an assisted living facility is $70,800 and an In-Home Health Aide is $77,000, according to Gearworth Financial, which sells long-term insurance. Nursing homes typically have the largest selection, with a private room costing an average of $127,750. (Private rooms with fees are slightly cheaper, at $111,325 per year.)
Medicaid is the most common source of payment for these costs. However, only low-income retirees with no assets – or those who have spent all their assets – can qualify. After Medicaid, this retirement research center reports that about 8% of long-term care is paid out of pocket and 4% is covered by insurance. Those statistics track with industry statistics; LIMRA estimates that about 3% of adults over 50 have a long-term care insurance policy, and more than half of adults without a long-term care insurance policy for care as a reason.
Long-term care insurance prices are based on age, gender and current and recent (several years ago) health. As with all insurance products, premiums vary depending on the level of coverage you choose. For a 60-year-old who buys a long-term care plan with a benefit level of $165,000 and rate protection of 2%, the average annual premium is $2,060 versus $3,325 for a single woman, according to Long Term Care Insurance. (Women’s rates are higher because they generally live longer, meaning they may need longer care.)
“Sometimes the need for long-term care can be combined with the need for long-term care insurance,” said Dick Weber, who offers a case of money insurance, which was previously told money. Needing that care is a reality for many, but purchasing long-term care insurance is still a rare decision.
If you’re thinking about buying life insurance, Webber recommends you start researching your options in your 50s. Premiums tend to jump after age 65, and prices decline as you get older, too.
Editor’s note: This story was originally published in March 2025. We have updated it to include the latest statistics on long-term care.
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