Long-Term Care: Costs, Medicare, Medicaid, and How to Plan

Long-term care is help with daily life over an extended period. It can happen at home, in the community, in assisted living, or in a nursing home.

Medicare generally does not pay for ongoing non-medical long-term care. Medicaid long-term care can pay for eligible people under state rules. Other costs may come from savings, income, family care, long-term care insurance, or a combination.

Planning starts with the kind of help you would want, local costs, the people who could coordinate care, and which payer could realistically apply.

What long-term care includes

Long-term care is broader than a nursing home. It may include help with:

• bathing, dressing, eating, toileting, or moving;
• medication and household tasks;
• transportation and meals;
• adult day services;
• home health or personal care;
• assisted living;
• memory care; or
• nursing-facility care.

Medicare calls much of this custodial care or long-term services and supports. Skilled nursing and rehabilitation are different. They involve clinical services and can have narrower Medicare coverage when eligibility rules are met.

How likely is long-term care?

Do not treat long-term care as certain for every person. Use the measured range.

An HHS/ASPE model estimated that 70% of people who reach age 65 will develop a severe long-term-services-and-supports need over the rest of life. It estimated that 48% will receive some paid care, 24% will receive paid care for more than two years, and 15% will spend more than two years in a nursing home.

Those are population estimates, not a prediction for one person. Health, family support, housing, sex, longevity, and future policy can change the result.

How much does long-term care cost?

The cost of long-term care depends on location, hours, care level, housing, and whether family members provide unpaid help.

CareScout's 2025 national medians were:

These are survey medians, not a quote. A state's nursing home cost can be far above or below the national number. The amount one family pays also depends on the length and type of care.

When you research long-term care costs by state, compare the same unit. A home-care hourly rate cannot be compared directly with a nursing home daily rate or an assisted-living monthly base fee.

Long-term care insurance cost, coverage, and tradeoffs

Long-term care insurance can pay a stated benefit when the policy's eligibility trigger is met. Common triggers involve needing help with activities of daily living or having severe cognitive impairment, as defined by the contract.

The long-term care insurance cost depends on:

• age when you apply;
• health and underwriting class;
• daily or monthly benefit;
• total benefit pool or benefit period;
• waiting period;
• inflation protection;
• home-care and facility coverage;
• shared or joint features; and
• insurer pricing and state approvals.

That is why a table labeled "long-term care insurance cost by age" is only a starting point. A lower premium can come with a smaller benefit, longer waiting period, weaker inflation protection, or narrower coverage.

Ask:

1. What does the policy count as eligible care?
2. Who certifies that the trigger is met?
3. Does it cover long-term care at home?
4. Is the benefit a reimbursement or cash amount?
5. How does inflation protection work?
6. Can premiums rise?
7. What happens if you reduce or stop benefits?
8. What exclusions, waiting periods, and limits apply?

The NAIC shopper's guide includes worksheets for comparing local care and policy terms. Read the actual policy, not only an illustration.

Does Medicare pay for long-term care?

Medicare does not pay for most ongoing custodial long-term care at home or in a facility.

Medicare may cover specific medical services, home health care, hospice, or a limited skilled nursing facility stay when all rules are met. That is not the same as paying indefinitely for help with daily activities.

For covered skilled nursing care, Medicare uses benefit-period and eligibility rules. Do not plan on "100 free nursing home days." Coverage, coinsurance, and medical need apply, and ongoing custodial care remains outside the basic benefit.

How Medicaid long-term care and Medicaid nursing home coverage work

Medicaid is a major payer for long-term services and supports. It can cover eligible care in nursing facilities and, through state programs, at home or in community settings.

Medicaid long-term care eligibility is not one national dollar test. States apply federal rules through their own income, asset, medical-need, estate-recovery, home-equity, transfer, and program requirements.

Do not give away assets based on a simple "five-year rule" article. Transfers, spouses, disabled family members, trusts, homes, and state programs can change the result. Get state-specific elder-law advice before moving property.

Ways to pay for long-term care

A practical plan may combine:

• current income;
• cash and investments;
• home equity;
• long-term care insurance;
• a life-insurance or annuity rider;
• Medicaid if eligible;
• Veterans benefits if eligible; and
• unpaid family help.

Every source has a limit. Home equity may require a sale or loan. Insurance has contract terms. Family care has time, health, and income costs. Medicaid has eligibility and provider-access rules.

A long-term care planning checklist

1. Decide who would speak for you under a health directive and financial power of attorney.
2. Write where you would prefer to receive care.
3. Price home care, assisted living, and nursing-home care in your area.
4. List income, insurance, housing, and liquid assets.
5. Review Medicare, Medicaid, Veterans, and employer-retiree benefits.
6. Compare insurance only after you know the care target.
7. Discuss what family members can and cannot provide.
8. Store legal, medical, policy, and account records where the right person can reach them.
9. Revisit the plan after a diagnosis, move, death, divorce, or major financial change.

Common questions

What is the average cost of a nursing home?

CareScout reported a 2025 national median of $114,975 a year for a semi-private room and $129,575 for a private room. State and local nursing home costs vary widely, so use a local facility quote for planning.

Does long-term care insurance cover home care?

Many policies can, but the contract controls. Check eligible services, benefit triggers, waiting period, reimbursement method, licensed-provider rules, daily or monthly limits, and inflation protection.

Does Medicaid pay for a nursing home?

Medicaid can cover nursing-facility services for eligible people in participating facilities. Financial and medical eligibility, spousal protections, estate recovery, and available alternatives vary by state.

Is long-term care insurance worth it?

It can transfer part of a large, uncertain care cost. It may be a poor fit if premiums are unaffordable, benefits are too small, or other resources already cover the risk. Compare the policy with a self-funding and Medicaid-aware plan.

This guide is general education, not insurance, Medicaid, tax, legal, or medical advice. Costs, programs, and policy terms change. Use current local prices and qualified state-specific advice.

Sources

1. HHS/ASPE, What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?. Accessed July 30, 2026.
2. HHS/ASPE, long-term services and supports research. Accessed July 30, 2026.
3. Medicare, long-term care coverage. Accessed July 30, 2026.
4. Medicare, skilled nursing facility care. Accessed July 30, 2026.
5. Medicaid, long-term services and supports. Accessed July 30, 2026.
6. Medicaid, institutional long-term care. Accessed July 30, 2026.
7. Medicaid, nursing facilities. Accessed July 30, 2026.
8. NAIC, A Shopper's Guide to Long-Term Care Insurance. Accessed July 30, 2026.
9. NAIC, consumer long-term care insurance guide. Accessed July 30, 2026.
10. CareScout, 2025 Cost of Care Survey. Accessed July 30, 2026.
11. Administration for Community Living, Eldercare Locator. Accessed July 30, 2026.