The number of Americans who live past 85 is expected more than double in the next 25 years, the Census Bureau projects, leading to a surge in demand for long-term care.
Long-term care involves helping an older adult manage activities of daily living, encompassing everything from grocery shopping and preparing meals to getting dressed and using the bathroom. As many as 7 in 10 older adults will require some level of help, according to the U.S. Department of Health and Human Services.
“If you live a long life, the chances of needing long-term care are increasingly high,” says Jesse Slome, executive director of the American Association for Long-Term Care Insurance. That help can range from unpaid, part-time caregiving from family members to shelling out thousands of dollars a month for a nursing home.
Understanding the likelihood of eventually needing long-term care is a critical part of planning for growing older, experts say. Yet less than half of adults say they’ve had a serious conversation with a loved one about who will take care of them if they need help with daily activities or how they would pay for care, according to a survey from KFF, a nonprofit health policy organization.
How many people actually need long-term care?
Despite plenty of media coverage about an impending long-term care crisis, most adults still underestimate their individual risk for needing extensive care when they get older.
While many older adults will be able to get by with help a few times a week, over half (52%) of adults age 65 and up will have “high-intensity” needs for at least a few months, according to a recent report from the Center for Retirement Research at Boston College. People with high-intensity needs require help with two or more daily activities or have a dementia diagnosis.
The risk for this more intensive care varies by education, race and gender. Some 56% of women will need more intensive, longer-term care, compared with 46% of men, researchers found.
Black and Hispanic adults are also more likely than white adults to need high-intensity care, with 57% of each group needing it compared with 50% of white older adults. Across all 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-five percent of adults said they thought Medicare would pay for a nursing home if they needed it, according to KFF. That, experts say, is one of the biggest misunderstandings around this issue: Medicare does not pay for long-term care.
Most long-term caregiving, nearly two-thirds, is actually handled via unpaid help from family members, a 2021 study from the Center for Retirement Research found. Some 33% of caregiving hours provided to individuals 65 and older come from children, with another 17% from spouses.
If you do end up needing professional care, though, the price tag can be steep. In 2024, the median annual cost for an in-home health aide topped $77,000, while a private room in a nursing home cost more than $127,000, according to Genworth Financial, which sells long-term care insurance.
Medicaid is the most common source for paying these costs. Yet only lower-income retirees with no assets — or those who’ve spent down all their assets — can qualify. After Medicaid, the Center for Retirement Research reports that about 8% of long-term care was paid for out of pocket and 4% was covered through insurance. Those figures track with industry statistics; LIMRA estimates between 3% and 4% of people older than 50 have a long-term care insurance policy, and more than a quarter of adults without a standalone long-term care insurance policy cite cost as the reason why.
Long-term care insurance prices are based on age, gender and your current and recent (over the past several years) health. As with all insurance products, premiums vary based on the coverage level you select. For a $165,000 benefit level and a 2% inflation protection, the typical annual premium for a 60-year-old is about $2,000 for a single male and $3,300 for a single female, according to the long-term care insurance association. (Prices for women are consistently higher because they’re more likely to need long-term care.)
“Sometimes needing long-term care can get conflated with needing long-term care insurance,” Dick Weber, who offers fee-only insurance advising, previously told Money. Needing that care is a reality for many, but buying long-term care insurance is still a relatively uncommon decision.
If you are thinking about buying insurance coverage, Webber recommends you start researching your options in your 50s. Premiums tend to jump after age 65, and denial rates spike as you get older, too.
More from Money:
You Might Be Overestimating How Much Money You Need to Save for Retirement
Here’s Who Actually Needs Long-Term Care Insurance — and When to Buy It
How Much Money Do You Need to Retire? Answer These 4 Questions to Find Out
