How will I pay for long-term care?

Medicare does not pay for help with daily living, such as bathing, dressing and meals. Medicare.gov says that for this kind of long-term care you pay all costs. Medigap policies do not cover it either.

The odds of needing some care are high. According to the federal Administration for Community Living, someone turning 65 today has almost a 70% chance of needing some type of long-term care. Women need it for 3.7 years on average and men for 2.2 years. About 20% will need it for more than 5 years, and about one-third may never need it.

The 2025 CareScout Cost of Care Survey puts national medians at $35 an hour for a non-medical caregiver at home, $6,200 a month ($74,400 a year) for assisted living, and $129,575 a year for a private nursing home room. Worked example: 3.7 years in assisted living at the median is $74,400 x 3.7 = $275,280. The same 3.7 years in a private nursing home room is about $479,400.

Medicaid does pay for nursing home and home care, but only once your income and assets are under the limits your state sets, and the rules vary by state. Gifts or transfers for less than fair market value made in the 60 months before applying can trigger a penalty period. Private long-term care insurance can also pay, within the limits and terms of the policy you hold.

Averages hide the spread. A third of people may need nothing, while a fifth need years of care. The number to work out is how many years of care your plan can carry before Medicaid rules apply, and who in the household would be left with what.