Someone turning 65 today has almost a 70% chance of needing some type of long-term care services, and 20 percent will need care for longer than 5 years (ACL, LongTermCare.gov, How Much Care Will You Need?, last modified February 18, 2020).
What long-term care is
Long-term care is help with the basic tasks of everyday life, such as bathing, dressing, eating and using the bathroom, for someone with a chronic illness, a disability or memory loss. Medicare.gov also calls it custodial care or long-term services and supports, and it includes things like adult day health care, home-delivered meals and transportation (Medicare.gov, Long-term care, checked October 14, 2026).
It is different from medical care that aims to cure or treat. Most of it is given at home, often by family, and the rest in adult day programs, assisted living communities and nursing homes. Long-term care planning means deciding, ahead of time, where you would want that help, who would give it and how it would be paid for.
How likely you are to need it
Someone turning 65 today has almost a 70% chance of needing some type of long-term care services and supports, and women need care longer (3.7 years on average) than men (2.2 years) (ACL, LongTermCare.gov, How Much Care Will You Need?, last modified February 18, 2020). One-third of 65-year-olds may never need it, while 20 percent will need it for longer than 5 years (same source).
| Type of care | Share of people turning 65 who use it | Average years of use |
|---|---|---|
| Any long-term care services | 69% | 3 years |
| Any care at home | 65% | 2 years |
| Nursing facility | 35% | 1 year |
| Assisted living | 13% | Less than 1 year |
Source for the table: ACL, LongTermCare.gov, How Much Care Will You Need?, last modified February 18, 2020. More people get care at home, and for longer, than in facilities.
What it costs, in short
In 2025 the national median was $129,575 a year for a private nursing home room, $74,400 a year for assisted living and $35 an hour for in-home care (CareScout Cost of Care Survey 2025, data tables dated March 2, 2026, CareScout cost of care). Prices vary a lot by state and by the hours of help you need. See how much long-term care costs for every setting, every state and a calculator.
Who pays for long-term care
Many people expect Medicare to pay. It does not, beyond short skilled stays: Medicare and most health insurance, including Medigap, do not pay for non-medical long-term care in a nursing home or in the community (CMS, Medicare and You handbook, Product No. 10050, September 2026). Medicaid pays the largest share of long-term care services, but only for people under its income and asset limits (ACL, LongTermCare.gov, Who Pays for Long-Term Care?, last modified May 10, 2022).
| Who pays | What it covers | The catch |
|---|---|---|
| Medicare | Short skilled nursing or rehab after a hospital stay, up to 100 days per benefit period; part-time skilled home health | No custodial care when that is the only care you need |
| Medicaid | Nursing home care and some home and community-based care, depending on the state | Income and asset limits, a 5-year look-back on gifts, estate recovery |
| Your income and savings | Any setting you choose | Can run out; spending large IRA sums can raise your taxes |
| Long-term care insurance | Daily benefit up to a limit, after a waiting period | Premiums can rise; health underwriting; benefit limits |
| The house | Sale proceeds or a reverse mortgage can pay for care | Sale taxes, Medicaid rules and estate recovery all touch the house |
Sources for the table: Medicare.gov, Skilled nursing facility care, checked October 14, 2026; Medicare.gov, Home health services, checked October 14, 2026; the 60-month look-back and estate recovery rules are in 42 U.S.C. 1396p (checked October 14, 2026). Each row has its own page: does Medicare pay for a nursing home, Medicaid spend-down, the Medicaid look-back period, Medicaid estate recovery, is long-term care insurance worth it, hybrid long-term care insurance, selling a house to pay for a nursing home and how a reverse mortgage works.
A simple long-term care plan
- Write down where you would want care and who you would want to help. Tell your family.
- Price your likely setting in your own state, using the cost pages above.
- List what would pay for it: income, savings, any insurance, the house.
- Sign a durable power of attorney for finances and a health care directive while you are able. An elder law attorney can explain your state's forms.
- If Medicaid could be part of the plan, get advice early. Gifts made in the 60 months before applying can delay eligibility (42 U.S.C. 1396p(c), checked October 14, 2026).
Free, neutral help: the Eldercare Locator (eldercare.acl.gov, 1-800-677-1116) for local services, your State Health Insurance Assistance Program (SHIP) for Medicare questions, your state Medicaid office, and your state insurance department for questions about a policy.
When paying privately or insuring can make sense
No single path is right for everyone. Paying from savings keeps every choice of setting open and suits people whose savings would cover several years of care. Insurance can make sense for people who could not easily absorb a long stay but have enough to protect, can pay premiums even if they rise, and are healthy enough to qualify. Medicaid is a real safety net, and planning for it is legal, but it limits choices and has strict rules on gifts and the home.
The house often decides the plan. Selling a home can bring tax rules into play; see selling a home with a large gain before you list it.
Go deeper
How Much Does Long-Term Care Cost? Costs by Setting and State
How much long-term care costs: a private nursing home room had a $129,575 national median in 2025 (CareScout). Costs by state and by setting.
Does Medicare Pay for a Nursing Home? What It Covers and What It Does Not
Does Medicare pay for a nursing home? Only short skilled stays: in 2026 you pay $217 a day for days 21 to 100 and all costs after day 100 (CMS, Nov 14, 2025).
The Medicaid Look-Back Period: What the 5-Year Rule Really Does
The Medicaid look back period is 60 months for transfers since February 8, 2006 (42 U.S.C. 1396p). How the penalty is figured, and which gifts are exempt.
Medicaid Spend-Down: What You Keep, What You Spend, and Why States Differ
Medicaid spend down explained. In 2026 a community spouse can keep $32,532 to $162,660 in resources (CMS, April 27, 2026). Countable assets and state rules.
Medicaid Estate Recovery: Can Medicaid Take Your House?
Medicaid estate recovery is required for care received at 55 or older (42 U.S.C. 1396p, checked October 14, 2026). When the house is at risk, and when not.
Is Long-Term Care Insurance Worth It? How to Decide
Is long-term care insurance worth it? How the daily benefit, waiting period and inflation rider work, rate increases, and 2026 tax limits ($430 a day, IRS).
Hybrid Long-Term Care Insurance: Life or Annuity Plus Care, and the Fine Print
Hybrid long-term care insurance explained: life or annuity plus care benefits, the $430 a day tax-free per diem limit for 2026 (IRS), and the true costs.
Selling the House to Pay for a Nursing Home: Taxes, Medicaid and the Options
Selling a house to pay for a nursing home? Up to $250,000 of gain ($500,000 joint) can be tax-free (IRS Pub 523, 2025). Medicaid, step-up and other options.
A plain example: three ways three years of care could go
Hypothetical, using 2025 national medians (CareScout Cost of Care Survey 2025, data tables dated March 2, 2026) and the federal figure that the average person who needs care uses some kind of services for 3 years (ACL, LongTermCare.gov, How Much Care Will You Need?, last modified February 18, 2020). Prices are held at 2025 levels, with no inflation.
| Path | What happens | Arithmetic | Total |
|---|---|---|---|
| A: Mostly at home | 2 years of home care at 20 hours a week, then 1 year of assisted living | $36,400 x 2 + $74,400 | $147,200 |
| B: Step by step | 1 year of full-time home care, 1 year of assisted living, 1 year in a private nursing home room | $80,080 + $74,400 + $129,575 | $284,055 |
| C: Nursing home | 3 years in a semi-private nursing home room | $114,975 x 3 | $344,925 |
The same three years can cost $147,200 or $344,925, a difference of $197,725. Home care hours and the setting matter more than anything else. In path A, 20 hours of home care a week at $35 an hour is $35 x 20 x 52 = $36,400 a year, and it assumes family covers the remaining hours.
Red flags
- Anyone who says Medicare will pay for a long nursing home stay.
- A pitch that uses fear of a nursing home to sell a product the same day.
- Advice to give the house or savings to the children without mentioning the Medicaid look-back.
- A plan built on a single national average cost when your state costs far more or far less.
- Being told to cancel existing coverage before new coverage is in force.
- Pressure to sign a power of attorney or move money while a parent is confused or ill.
- A cost projection with a high inflation rate presented as a certainty.
- Someone who offers to handle a Medicaid application for a fee and asks for control of accounts.
- A reverse mortgage or annuity offered as the answer before your care needs are known.
- Silence about estate recovery when the conversation turns to keeping the house.
Questions to ask before you sign
- Where would I want to receive care, and have I told my family?
- What does care cost in my state for the setting I would likely need?
- How much of that could my income cover each month?
- How many years of care could my savings pay for before I would need Medicaid?
- Have I signed a durable power of attorney and a health care directive?
- Who in my family could help with care, and for how long?
- Would long-term care insurance or a hybrid policy fit my budget if premiums rose?
- What would happen to my house if I needed care, and what would my spouse keep?
- When should I talk with an elder law attorney about Medicaid rules in my state?
- What free help is available locally through the Eldercare Locator?
Long-Term Care and Your Home: Read This Before You Sign
A one-page checklist: what Medicare will and will not pay, the Medicaid look-back and estate recovery basics, the questions to ask before you buy long-term care coverage or take a reverse mortgage, and the tax rules if the house is sold. What Medicare will and will not pay, Medicaid basics, and the questions to ask before you sign anything about care. We’ll email it to you.
The Retirement Literacy Foundation is a 501(c)(3) public charity (EIN 41-5062266). General education, not tax, legal or investment advice. Nothing is sold here. Unsubscribe any time.
Sources
- ACL, LongTermCare.gov, How Much Care Will You Need?, last modified February 18, 2020
- ACL, LongTermCare.gov, Who Pays for Long-Term Care?, last modified May 10, 2022
- Medicare.gov, Long-term care, checked October 14, 2026
- CMS, Medicare and You handbook, Product No. 10050, September 2026
- CareScout: Cost of Care Survey 2025 (data tables dated March 2, 2026; checked October 14, 2026)
- ACL: Eldercare Locator (checked October 14, 2026)
The Retirement Literacy Foundation is a 501(c)(3) public charity. This page is general education, not tax, legal or investment advice. Nothing is sold here, no product is recommended, and RLF accepts no funding from financial companies. Rules and figures change; each one above shows its source and date. Check anything you plan to act on with your state insurance department or a qualified professional who is not paid on the product.