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Long-term care is defined by the National Institute on Aging as a variety of services and supports for those who can no longer care for themselves due to age-related impairments. Long-term care may be provided in someone’s home or in a facility such as assisted living and nursing homes. It’s estimated that 70% of people will need long-term care, but are Americans prepared?
RELATED: Long-term care statistics
Summary of long-term care survey results:
- One-third have not considered how they’ll pay for long-term care.
- 82% want in-home care as they age.
- 59% expect a spouse, partner, or family member to care for them.
- 83% have not started planning for the possibility of needing long-term care.
- Discussing plans with family is the most commonly reported step in planning for long-term care.
- Only 28% have started saving money for long-term care.
- 56% mistakenly believe that base-level services at an assisted living facility costs less than $4,000 per month.
- Only 27% have considered long-term care insurance.
- Only 11% have purchased long-term care insurance.
- 38% mistakenly believe Medicare, Medicaid, or commercial health insurance will cover long-term care.
- 65% mistakenly believe long-term care insurance will cover custodial and medical care.
- 69% do not believe long-term care insurance is affordable.
One-third have not considered how they’ll pay for long-term care
Personal savings or retirement funds were the most commonly reported payment type for long-term care followed by Medicare, Medicaid, and other health insurance benefits. However, Medicare, and health insurance do not cover long-term custodial care (help with daily activities).
One-third of respondents have not considered paying for long-term care at all, 10% of which are 65 years and older. Given that 93% of residential care community residents are 65 and older, it’s a good idea to start preparing for long-term care costs well before your 65th birthday.
- 36% plan to use personal savings or retirement funds
- 33% have not considered paying for long-term care. Of those who have not considered paying for long-term care:
- 14% are 18 to 24 years old
- 16% are 25 to 34 years old
- 24% are 35 to 44 years old
- 21% are 45 to 54 years old
- 15% are 55 to 64 years old
- 10% are 65 and older
- 29% plan to use Medicare benefits
- 31% of Medicare survey respondents* mistakenly believe that Medicare covers long-term care.
- 34% of Medicare survey respondents* mistakenly believe that Medicare covers care provided by an assisted living facility.
- 27% of Medicare survey respondents* mistakenly believe that Medicare covers indefinite, long-term custodial care.
- 18% plan to use Medicaid benefits
- 13% plan to use other health insurance benefits
- 10% plan to use long-term care insurance
- 7% plan to use their pension (non-VA pension/benefits)
- 4% plan to use their VA pension/benefits
- 3% plan to use reverse mortgage
- 2% reported other ways to pay for long-term care
* Read our separate Medicare survey here.
82% want in-home care as they age
Receiving long-term care in our own home is an ideal concept for most of us (82% of respondents); however, it’s often not a reality. Only 18% of the regulated long-term care facilities in the U.S. in 2016 were home health agencies.
- 82% prefer to reside at home as they age
- 8% prefer to reside in an assisted living facility as they age
- 4% prefer to reside in a relative’s house as they age
- 3% reported other preferred places to reside as they age
- 2% prefer to reside in a board and care home or group home as they age (i.e., residential home operated by a licensed provider with a few other individuals)
- 1% prefer to reside in a nursing home as they age
Preferred long-term care facility by age group |
||||||
|---|---|---|---|---|---|---|
| Age group | % of age group who want LTC at home | Assisted living facility | In a relative’s home | Other | Board and care home or group home | Nursing home |
| 18-24 years old | 72% | 5% | 12% | 7% | 2% | 2% |
| 25-34 years old | 83% | 5% | 5% | 3% | 3% | <1% |
| 35-44 years old | 81% | 7% | 4% | 4% | 2% | 2% |
| 45-54 years old | 83% | 8% | 2% | 3% | 3% | 1% |
| 55-64 years old | 82% | 12% | 4% | 1% | <1% | <1% |
| 65+ years old | 87% | 10% | 3% | 0% | <1% | 0% |
59% expect a spouse, partner, or family member to care for them
Custodial care is non-medical care, defined as help with daily living, such as assistance with bathing, walking, dressing, going to the bathroom, getting in and out of bed, and eating. Nearly 60% of respondents reportedly expect a family member to provide this assistance for them. This isn’t unrealistic, as more than 65 million Americans (29%) provide unpaid care for an ill, disabled, or aging loved one each year. However, it’s important to keep the emotional and physical toll caregiving can take on family members.
An additional 19% of respondents expect nobody to provide this type of care and 22% expect a health aid or facility to provide custodial care. Long-term care facilities provide these services but they are not covered by Medicare, or health insurance.
- 42% anticipate their spouse/partner to provide custodial care
- 19% anticipate nobody to provide custodial care
- 17% anticipate other family members to provide custodial care
- 15% anticipate a home health aid to provide custodial care
- 7% anticipate a facility to provide custodial care (i.e., assisted living, nursing home, board and care home, etc.)
RELATED: Caregiver’s guide to self care and avoiding caregiver burnout
83% have not started planning for the possibility of needing long-term care
Preparing for long-term care is a multifaceted process that goes far beyond a conversation with family members. It includes developing a financial plan, considering the type of care you may need, estimating costs and how you’ll pay for long-term care, reviewing benefits from your insurance or Medicare, purchasing long-term care insurance, and creating an Advance Care Plan. The majority of our long-term care survey respondents have not started planning for long-term care.
- 83% have not started planning for the possibility of needing long-term care
- 17% have started planning for the possibility of needing long-term care
| Long-term care planning statistics by age group | |
|---|---|
| Age group | % of age group who have started planning for long-term care |
| 18-24 years old | 10% |
| 25-34 years old | 14% |
| 35-44 years old | 18% |
| 45-54 years old | 18% |
| 55-64 years old | 18% |
| 65+ years old | 20% |
Who has started planning for long-term care?
Of those who have reportedly started planning for long-term care:
- 55% are male and 45% are female
- 56% are married
- 63% have no children
- 89% have some degree of higher education
- 52% have a full-time job
- 34% have a household income of $100,000 or more
- 80% have started saving for long-term care
- 58% anticipate using personal savings or retirement funds to pay for long-term care
- 50% expect their spouse or partner to provide custodial care
- 83% prefer to reside at home if they need assistance as they age
How have they started planning for long-term care?
Of those who have reportedly started planning for long-term care:
- 52% have discussed long-term care plans with their family
- 49% have developed a financial plan
- 29% have researched the type of care they may need and the associated costs
- 28% have purchased long-term care insurance
- 22% have reviewed their benefits from Medicare or other health insurance and understand what is and is not covered
- 20% created an Advance Care Plan (which may include advance directives, financial power of attorney, a living will, healthcare proxy, etc.)
- 8% reported none of the above
Only 28% have started saving money for long-term care
Of all survey respondents:
- 72% have not started saving money for long-term care
- 28% have started saving money for long-term care
The cost of long-term care is increasing. The majority of our survey respondents reported their preference to receive in-home long-term care, but the cost of home health aides had the largest year-over-year percent increase from 2020 to 2021. Adult day health care is the most affordable option on average while a private room in a nursing home facility is the most expensive.
2021 long-term care costs |
||||
|---|---|---|---|---|
| Daily cost | Monthly cost | Annual cost | % change since 2020 | |
| Homemaker services | $163 | $4,957 | $59,488 | +10.64% |
| Home health aide | $169 | $5,148 | $61,776 | +12.5% |
| Adult day health care | $78 | $1,690 | $20,280 | +5.41% |
| Assisted living facility | $148 | $4,500 | $54,000 | +4.65% |
| Semi-private room in nursing home facility | $260 | $7,908 | $94,900 | +1.96% |
| Private room in nursing home facility | $297 | $9,034 | $108,405 | +2.41% |
Many people underestimate these long-term care costs. For example, the annual median cost of a private one-bedroom in an assisted living facility in the U.S. is $4,500 per month. More than half (55%) of survey respondents mistakenly believe that base-level services at an assisted living facility costs less than $4,000 per month.
- Less than $2,000 per month: 21% of respondents
- $2,001-$4,000 per month: 34% of respondents
- $4,001-$5,000 per month: 23% of respondents
- $6,000-$8,000 per month: 10% of respondents
- $8,001-$10,000 per month: 6% of respondents
- More than $10,000 per month: 6% of respondents
Only 27% have considered long-term care insurance
Long-term care insurance can subsidize these costs. A 55-year-old man is estimated to pay an average premium of $2,220 per year for long-term care insurance, according to the American Association for Long-Term Care Insurance. That will cover $165,000 when the policyholder takes out the insurance and $400,500 at age 85 if benefits grow 3% each year. That’s enough to cover about seven years in an assisted living facility according to the 2021 costs shown in the table above. However, 73% of survey respondents have not considered long-term care insurance and only 11% have purchased long-term care insurance. This low rate could be a result of some misconceptions about long-term care coverage, as 38% mistakenly believe Medicare, or commercial health insurance will cover long-term care.
Of the 1,332 respondents who have not purchased long-term care insurance:
- 28% say they’re too young for long-term care insurance
- 24% do not know what long-term care insurance is or what it covers
- 18% say long-term care insurance is too expensive
- 16% already have Medicare
- 12% already have other health insurance coverage
- 10% already have Medicaid
- 7% do not think their health will require long-term care insurance
- 6% reported other reasons for not signing up for long-term care insurance
- 3% have a separate savings account for long-term care
- 2% will receive veteran’s benefits that will cover or provide long-term care
- 19% reported none of the above
We asked all survey respondents about the affordability of long-term care insurance. Long-term care insurance costs $2,220 to $3,700 per person or $5,920 per couple per year, according to the American Associate for Long-Term Care Insurance. The majority of survey respondents do not believe this is affordable. Of all survey respondents:
- 69% do not believe long-term care insurance is affordable
- 31% believe long-term care insurance is affordable
There are also some misconceptions about what long-term care insurance covers. Long-term care insurance covers services not provided for by health insurance, such as custodial care. However, 65% of respondents mistakenly believe that long-term care insurance will cover both custodial and medical care, which it does not. Of all survey respondents:
- 17% believe long-term care insurance covers custodial care only
- 18% believe long-term care insurance covers medical care only
- 65% believe long-term care insurance covers both custodial care and medical care
