The Cost of Care and Who Pays It

If the first shock of long-term care is realizing how common it is, the second is seeing the price tag. Care is expensive at every level, and most families are unprepared for how the system expects them to pay. Some of these numbers were mentioned in the last article, but they are worth repeating, because they are the numbers most people overlook until they are staring at a bill.

National cost averages (Genworth 2023 Cost of Care Survey):

• Home health aide (40 hours a week): about $5,000 per month
• Homemaker services (help with cooking, cleaning, errands): about $4,800 per month
• Assisted living facility: typically $4,500–$6,500 per month depending on location
• Memory care unit: usually 20–30 percent higher than standard assisted living
• Nursing home (private room): averages around $9,500 per month nationally, exceeding $12,000 in many states

These are averages. In higher-cost regions like the Northeast and California, monthly bills can run even higher. A single year of care can wipe out $60,000 to $120,000. Extend that to three, five, or more years, and the math becomes brutal.

So who actually pays?

• Families themselves. Most care starts with unpaid relatives. According to AARP, nearly 80 percent of long-term care hours in the U.S. are provided by family members – usually spouses or adult children. The cost is lost wages, stalled careers, and financial strain that does not show up on a facility invoice.
• Out-of-pocket savings. For professional care, families pay directly until assets are exhausted. Many facilities will not even accept someone without proof they can pay privately for at least a year.
• Medicare. This point is worth underscoring: Medicare does not cover ongoing custodial long-term care. It pays for up to 100 days of skilled nursing after a qualifying hospital stay, but once rehabilitation ends, so does coverage.
• Medicaid. Eventually, Medicaid becomes the primary payer for many Americans, covering about 60 percent of nursing home residents. But qualification requires spending down nearly all personal assets first. Even then, choices are limited to facilities that accept Medicaid, and the quality of care can vary widely.
• Insurance. Traditional long-term care insurance policies exist but cover only a small slice of the population. Premiums can be expensive, benefits capped, and underwriting strict. Hybrid life-and-LTC products are growing, but they remain out of reach for many households.

The financial strain is real. A year of nursing home care can exceed $100,000. Even a few years of part-time home care can drain savings quickly. And because the length of care is unpredictable, families do not know if they are planning for months or a decade. That uncertainty makes long-term care one of the greatest financial risks most households will ever face.

Planning does not mean having every dollar figured out in advance. But it does mean knowing how the system works: Medicare is not the safety net people assume, Medicaid only steps in after assets are nearly gone, and most care starts with family whether you are ready or not.