The number of Americans reaching the age of 85 is projected to more than double over the next 25 years, according to estimates from the Census Bureau. This significant increase will lead to a heightened demand for long-term care services, which are essential for supporting an aging population. As such, planning for potential long-term care needs has become increasingly crucial for families and individuals alike.
Long-term care encompasses a wide range of services designed to assist older adults with their daily activities. These activities include everything from grocery shopping and meal preparation to dressing and personal hygiene tasks. According to the U.S. Department of Health and Human Services, approximately 7 out of 10 older adults will require some form of assistance, emphasizing the importance of understanding the landscape of long-term care.
“As people age, the likelihood of needing long-term care rises significantly,” states Jesse Slome, executive director of the American Association for Long-Term Care Insurance. This assistance can vary widely, from informal, part-time caregiving provided by family members to substantial monthly expenses associated with nursing homes or assisted living facilities.
Experts emphasize that grasping the possibility of needing long-term care, along with exploring available options, is vital for effective aging planning. However, surveys indicate that a significant portion of Americans have not engaged in serious discussions about their care preferences or financial planning for such needs. A study conducted by KFF, a nonprofit health policy organization, found that less than half of adults have had comprehensive conversations with loved ones regarding who will provide care or how they will finance it.
How many people actually need long-term care?
Despite extensive media coverage regarding a looming long-term care crisis, many adults continue to underestimate their personal risk of requiring extensive care in their later years. This misconception can lead to inadequate planning and preparation.
While numerous older adults may only need assistance a few times each week, research reveals that over half (52%) of individuals aged 65 and older will experience “high-intensity” care needs for several months at some point. A recent report from the Center for Retirement Research at Boston College indicates that individuals with high-intensity needs typically require help with two or more daily activities or possess a diagnosis of dementia, which necessitates a higher level of care.
The likelihood of requiring this more intensive level of care varies based on factors such as education, race, and gender. The research indicates that 56% of women will need more extensive, long-term care compared to 46% of men. This discrepancy highlights the importance of understanding gender-specific health trends.
Additionally, Black and Hispanic adults demonstrate a higher likelihood of needing high-intensity care compared to their white counterparts, with 57% of each group requiring such assistance versus 50% of white older adults. Throughout all racial categories, individuals with college degrees exhibit a lower likelihood of requiring extensive care compared to those who only possess a high school diploma.
How do people pay for long-term care?
A significant number of adults, specifically 46%, mistakenly believe that Medicare will cover the costs associated with nursing home care in the event that they require such services, according to research conducted by AARP. Experts have identified this as one of the primary misconceptions surrounding long-term care financing, as Medicare does not provide coverage for long-term care services.
In fact, nearly two-thirds of long-term caregiving is actually provided through unpaid assistance from family members, as revealed in a 2021 study by the Center for Retirement Research. Approximately 33% of caregiving hours for individuals aged 65 and older come from children, while an additional 17% are provided by spouses, highlighting the critical role of family in the caregiving process.
Should you find yourself in need of professional long-term care services, be prepared for the potential financial burden. In 2024, the median annual cost for an assisted living facility averaged around $70,800, while the expense for an in-home health aide exceeded $77,000, according to Genworth Financial, a company that specializes in long-term care insurance. Nursing homes represent the most expensive option, with private rooms averaging $127,750 annually, and semi-private rooms costing about $111,325 a year.
Medicaid remains the most common source for covering these expenses. However, only low-income retirees without assets, or those who have depleted their assets, can qualify for assistance. Following Medicaid, the Center for Retirement Research reports that approximately 8% of long-term care costs are paid out of pocket, while 4% are covered by insurance. Industry statistics from LIMRA indicate that about 3% of individuals over 50 possess a long-term care insurance policy, with over a quarter of adults lacking such insurance attributing the absence to cost-related concerns.
When it comes to Long-Term Care Insurance, pricing is influenced by factors such as age, gender, and your current and past health status. Just like any other insurance product, premiums will vary based on the level of coverage you choose. For example, a 60-year-old purchasing a long-term care plan with a $165,000 benefit level and 2% inflation protection typically faces an annual premium of $2,060 for a single male and around $3,325 for a single female, according to data from the long-term care insurance association. Women often incur higher costs due to their longer life expectancy and increased chances of requiring long-term care.
“The need for long-term care is often confused with the necessity for long-term care insurance,” states Dick Weber, an expert in fee-only insurance advising. While many individuals will eventually require care, making the decision to purchase long-term care insurance remains relatively uncommon.
If you are considering acquiring insurance coverage, Weber advises initiating your research in your 50s. Premiums are likely to rise significantly after age 65, and denial rates for coverage tend to increase with age, making early planning essential.
Editor’s note: This article was originally published in March 2025. We have updated it to reflect the most current statistics regarding long-term care.
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