What Does Long-Term Care Cost?

A lot, you’re thinking? Sometimes, yes.

That’s a nice way to say we get the “deer in headlights” fear whenever we think about it, so it’s easier not to think about it.

Big mistake. Huge mistake. Better to face the facts and plan for it. It’s amazing to me that extremely intelligent people find it easier to let attorneys make LTC decisions for them by getting them on Medicaid, which still means nursing home care in many states. These are the same people who have spent their entire lives doing whatever it takes to stay in control. They did it by gathering information and making an informed decision.  Planning for long-term care is just like that.

So let’s shine the light on how much long-term care costs.

The cost of a home health aide to help with daily activities such as bathing, dressing, transferring from one place to another in our home and so forth ranges from $16-$30 an hour. Sitters and companions cost less. The latest claims study from the Society of Actuaries says 2/3 of home care claimants are able to stay home the entire duration of care.  The 1/3 that transition out commonly go to an assisted living facility, not a nursing home.  Only 17% of claims start in a nursing home.

Adult day care costs about $68 per day. If you watched the video on my home page about my client Mr. Duckett, I can add to the story that he was able to continue his love of golfing three times a week by taking his precious wife Helen to adult day care while he golfed with his friends.

Assisted living averages a reasonable $3600 a month. Some of these places are gorgeous! Some have the country club look and more importantly, couples can stay together and they don’t charge double for the healthy one. You can have privacy in your own unit, or you can mingle with others. Someone is around to help you when you need it 24 hours a day with the daily activities or with the proverbial “I’m down, but I can’t get up” need. They cook for you, clean for you, do your laundry and there’s no yardwork…what’s not to love? Apparently not a lot.  The latest claims study from the Society of Actuaries for 2000-2011 projects the average duration of care for a woman who needs care longer than a year to be 4.7 years and 3.8 years for men.  This is considerably longer than the last study (1984-2007), and the researcher told me that is largely due to assisted living facility claims.  It goes without saying that people live longer when they are happier. The other great news about assisted living facilities is that 80% of people who go there don’t transition out to a nursing home.

HOWEVER, $3600 a month isn’t the average for a “country-club” assisted living facility. That’s really the median. I usually add $1500 a month to whatever I see in a cost survey, so that brings it to $5,100 a month. Still, compared to the cost of a nursing facility, it is reasonable. A semi-private room in a nursing facility according to the Genworth study averages $6,850 a month and a private room averages $7,700. Here’s an easier snapshot (numbers are rounded to make them easier to grasp):

Home Health Aide: $16-$30/hr. (yes, it’s a wide range, so you need to use the cost surveys to look at YOUR area)
Adult Day Care: $68 per day
Assisted Living Facility:$3,600 per month (add $1,500 for a more upscale facility)
Semi-Private Nursing Facility:
— $225 per day, $6,850/month, $82,000/year
Private Nursing Facility:
— $250 per day, $7,700/month, $92,000/year

But we can’t go just by today’s costs, can we?  Nope.  Inflation rears its ugly head. I still use 5% compound to project future cost of care for assisted living facilities and nursing homes.  Home care is growing slower, so I use 2.5% for that.  I use my favorite compound calculator for this purpose. If I were projecting future cost of a more upscale assisted living facility, for example, I would put $5,100 in the first box on the calculator under Current Principal, zero in the 2nd box for Annual Additions, 30 in the Years to Grow box, and 5% as the Interest Rate. Click Calculate and voila, the answer is $22,041.91…yes, a month.

Now, you can’t buy 5% compound on long-term care insurance policies anymore affordably.  Most companies have priced 3% compound the best. So I usually use that same calculator to determine how much benefit I need to start with to grow it at 3% compound to get to the target in 10, 20 or 30 years…depending on the age of the purchaser and that person’s family longevity.In this case, $9000 a month at 3% compound will grow to $21,845 in 30 years and that’s close enough.  If a single person had income of $6000 a month to put with the monthly benefit, then I can solve for $16,000 a month, which would only take an initial monthly benefit of $6,700 at 3% compound.  This would lower the premium considerably. I say “single person”, because income could still be needed for a spouse or partner. Can you see why it is so important to set up a personal consultation to determine the best way to plan for long-term care? You can do that here.

Now the cost of care varies greatly by geographical area so you will need to see what it is where you live or where you plan to retire. Here are links to two well-known cost of care studies:


John Hancock

Numbers don’t mean much until you see how they are used. When one person needs care at $75,000 per year, $500,000 can easily be spent in less than four years.

[table id=1 /]

Note: “Income Needs” is the portion of household income needs that the assets had been relied upon to provide and assumes annual inflation of 3%. “LTC Expense” is based on a typical annual cost and is subject to 5% annual inflation. “Investment Yield” is assumed at 4% annually after taxes.

Think using a 4% after tax investment yield is too pessimistic?  Here is the same chart using 6%.  Doesn’t look a whole lot better to me. You’re still out of money in less than five years.

[table id=2 /]

You can explore this website to see various ways that people are finding to pay for long-term care. You will definitely want to explore the LTC Useful Links to find organizations who will help find caregivers. When you’re working full-time with a family of your own, it’s very hard to find the hours it can take to find caregivers, schedule their time and keep everything going to make sure your loved one is safe.


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    • Mike Welsh on March 16, 2021 at 4:37 pm
    • Reply

    I am an 83-year-old male and have had a long-term care policy with MetLife thru aarp since 2004. I just received a Premium increase notice that they were going to increase my life time premium by 21% affective February 2021. My new premium will be $450 a month for lifetime benefits of $181 a day or a premium increase for a four year benefit at $164 a day for a premium to $350 a month. I have a male friend who is 92 years old who also has MetLife coverage with the four year maximum plan. He has coverage that affords him $350 a day with a premium of $160 a month. That amounts to double my daily rate and $200 less in premium. I was told by MetLife that I have paid in approximately $43,000 in premium since I took this policy out in 2004. I’m wondering if there is a possibility that MetLife has not calculated my rate properly over the last 17 years. I would like to have your opinion on whether you feel that I have be overpaying by a large amount for the coverage that I have??

    1. Hi Mike, I certainly understand your concern and your question. Is it possible that your friend bought his policy in a different state than you bought yours? Each state has to approve a rate increase, and some states don’t approve as many or as much as others. I will tell you that very few people today have an unlimited benefit, and a premium of $5400 a year is not unreasonable at all. In fact, your $181 daily benefit will pay $5505 a MONTH if you have a claim this year. Also, I believe your premium will stop when you have a claim. My advice is to keep the plan in place and pay the $450 a month if you can afford it. You can also call MetLife and see if you can save money by paying it once a year instead of monthly. The savings should be about 2/3 of a monthly premium. I know it is tempting to look at your friend’s policy and premium, but you can only be responsible for you. If you need to reduce the premium, ask if you can reduce from unlimited but keep your daily benefit of $181. If you can stay where you are for now, I am advising you to do so as you can still reduce your benefits in the future. Hope this is helpful. Phyllis Shelton

    • Vivian Hill on August 20, 2020 at 4:31 pm
    • Reply

    I’ve enjoyed reading all the emails from folks.

    Your articles were very helpful. My question to you is, can I get LTC insurance? I am 72 years old and in good health except for some arthritis in my neck, back and one knee. Getting around great as I take Rx meds. I do yoga and stretches at home.

    1. Thank you Vivian! I love reading everyone’s comments too. I think you have a good shot at getting LTCi and you certainly won’t know until you try. We consult with each person in-depth to determine the best fit for coverage and budget. Please complete the short questionnaire at https://www.gotltci.com/contact-us/ so we can help you right away.

    • Grace Ann Dickman on August 20, 2020 at 10:08 am
    • Reply

    Good morning I was reading up on the different long term care insurance and now am more I’m confused than ever! I am a healthy 62 year old while my husband is 64 with a diagnose of Parkinson although was caught early and on a treatment plan. Your thoughts please on the best affordable insurance. Thanks

    1. Yes, there are several good options available now Grace. There are a couple of home care plans that your husband could likely qualify for, which could really benefit you if you are his primary caregiver. However, there are no guarantees in life and you could need care first. Therefore you need to get a regular policy. One of the major plans we recommend is going up Sept. 1st on new policyholders, so it is important that you meet with us now so we can customize a plan for you and your husband. Please complete the short questionnaire at https://www.gotltci.com/contact-us/ so we can help you right away.

    • Anya on August 20, 2020 at 9:43 am
    • Reply

    Hi Phyllis,
    Is it possible to qualify for LTCi if there’s a serious preexisting condition, like Parkinson’s?

    1. Yes Anya, there are a couple of small home care plans that might be available that are inexpensive. There is also a special annuity that pays double the lifetime income when the person needs help with two daily living activities. The doubler can last up to five years, then it goes back to the regular income for the rest of that person’s life. Please complete the short questionnaire at https://www.gotltci.com/contact-us/ so we can help you right away.

    • Jill Powell on April 18, 2020 at 2:06 pm
    • Reply

    Hello, I’m 53 years old currently working for The State of California. I’m planning on retiring at 55 to move back to the Midwest. The reason for retiring at 55yrs is that I own our family home and I’m renting a condo in California flushing money down the drain every month. I do plan on working full time or part time once I move back for at least 10-15 yrs. Would I qualify for a Long Term plan if I had Breast Cancer? Also, being single I want to be able to afford it. I saw what happened to my Mothers assets when we had to place her in a care facility..,that’s how I ended up purchasing the family home. Heard about you from Suze Orman Retirement Guide 50+.

    Thank you

    1. so glad you found me through Suze’s new book Jill. Please reserve a time with me so we can go over your situation on my calendar here.

    • Robert on January 14, 2020 at 8:38 pm
    • Reply

    Hi Phyllis –

    I am so surprised that there is no discussion of the time limits on benefits and of the restrictions on obtaining benefits. My experience with my moms policy is that the 3 year term restriction and the lack of flexibility about who qualifies to provide aid has make the policy, at best, a break even proposition. The after tax amount that we would have earned from the policy payments will just about equal the benefit that is paid. The restrictions on who qualifies to provide aid have required us to use a more expensive facility .. so the benefits don’t go as far.

    Had mom needed care earlier in her life the policy would have been a better deal. As is we might break even … and had to endure more expensive and restricted care than otherwise. The policy restrictions also pushed for a higher level of care than we might have needed to qualify for benefits. If we held back on receiving benefits if she passed quickly.

    I believe that a life insurance policy is a much better idea if one has the wherewithal to pay out of pocket. Particularly given the payout limitations.

    1. Hi Robert – I can only assume your mother’s policy did not have an inflation benefit. As an older policy, the most popular was 5% compound, which would have doubled her benefits every 15 years and blown way past what she could have earned by investing her premiums. As for the restrictions on the providers, I agree with you on the assisted living facilities. ALFs are still a new provider compared to nursing homes and licensure rules have been slow to develop. Also licensed home care professionals can be difficult to find in some areas. That’s one of the reasons I am and have always been a big fan of cash benefits that allow you to use the money however it is needed. The 100% cash plans are gone in the traditional LTCi market. There are two that provide a 30-40% cash benefit in lieu of the full home care monthly benefit are Mutual of Omaha and Transamerica. Hybrid plans (life insurance based) that are 100% cash are Securian (Minnesota Life), Nationwide CareMatters I and II and Brighthouse (formerly MetLife). These products are what I consider true LTC coverage because they provide coverage way beyond the death benefit. People can get up to seven years of benefits. For people who want unlimited, OneAmerica and National Guardian Life still offer that, but neither are cash plans. Cash also means you don’t have to pay for the higher than needed levels so you can budget better.

    • Dee Sill on April 15, 2019 at 11:05 am
    • Reply

    I have had CNA LTC policy since 1998 and pay $214 a month. I am retiring and really need that money monthly. I also have heard that CNA is not a good company and avoids paying claims. What should I do? I don’t have family and am 66 years old. Are there other options? It appears many people have had bad experiences with CNA and they also hike rates later on. Thank you.

    1. CNA is paying claims. Here’s my question to you: If you need the $214 a month today, what will you do when you need long-term care and need $10,000 a month for a significant amount of home care or an assisted living facility in 15 years? Most people are never in a nursing home, but the expectation is that more women than not will need home care or care in an assisted living facility. Medicaid can help you AFTER you have spent down most of your own money and you no longer have a choice about the type of care you receive. The only ways to pay for extended chronic are to pay out of your own savings, pay with long-term care insurance or rely on Medicaid and give up your private pay choices. $214 a month is an extremely low premium in today’s market Dee and if I were you, I would gladly pay it to have some say in how I am cared for.

    • Toni on January 17, 2018 at 12:38 pm
    • Reply

    Hi Phyllis, I am 51, married and my husband is a federal government employee. We want to get LTC insurance for me and possibly him but current reviews for LTC claim requests are less than encouraging. Many reviews read like there are unrealistic delay tactics, second and third requests for documents that have already been submitted and other delay tactics to the point of hiring lawyers to get a claim paid. This is the feedback on several companies, including the underwriter for the federal government. Can you recommend LTC insurance companies with a good track record for executing a claim?

    1. I’m happy to help you Toni. There are good companies that don’t put you through any delay tactics. Since you completed our questionnaire, you should have received an email with a link to our calendar so you can set an appointment. Please reserve a time in the FIRST column (blue – Telephone 1) as that’s my column. You and Victor should both be on the call with me as this decision deeply affects both of you. Also please be near a computer so we can do a screen share and look at options. I helped implement the Federal LTCi Program (FLTCIP) and know it well. We will also look at a couple of other options as you requested. I’ll really look forward to visiting with you both!

    • Janice Dee on March 6, 2016 at 1:58 pm
    • Reply

    I have LTC and I would recommend this to friends and family all the time. I was a federal worker and purchased through the government at a very good rate when I was 44 years old and glad I did. A year later I was diagnosed with an autoimmune disease that may or may not cause disability and require either in-home or nursing home care at a later date. Had I waited, it would have been difficult to obtain the policy I have for $157 per month. I am now 58 years young and doing extremely well and part of it is knowing that should I need LTC, it is there for me. Just like all other insurances, you hope for the best but plan for the worst.

    As always, Suze looks out for us and and I recommend that you look closely at LTC to determine whether it’s a good fit for you. Best wishes to All!

    1. Janice, how thoughtful of you to post this comment for all to see. My company actually did the employee education for the Federal government when the plan was launched in 2002. It was a monumental task with our team of 16 people doing 2,020 employee education meetings in 42 states, 210 cities. OPM (Office of Personnel Management) was committed to doing a stellar job of education to teach as many people in the Federal family (civilian, military and postal) how important it is to purchase long-term care insurance, especially at younger ages when we are healthier. Congratulations on not only being one of the thousands who listened and took action by enrolling, but is now passing it on as living proof of the value of acquiring LTC coverage at a young age. And yes, Suze carries the banner as well and is our voice today to keep this essential message going!

    • Rosalinda Christensen on February 20, 2016 at 9:19 am
    • Reply

    I will be 60 in July but my husband and I are on a limited budget. I would like to have long term care insurance for me and my husband but I am worried about the added monthly cost it will add to our already strict budget. Ellen said on her question that the cost to her at 47 was $600+ twice a month. I know how important LTCi is but I am worried about the added expense. Both my husband and I are working full time and our health insurance that we are required to have is so very expensive. But I have seen how expensive it has been for our parents that did not plan for the future that the care and burial expense created a burden on us because the debt of caring for them until they passed on fell on our shoulders, including their burial costs.
    Thank you!

    1. Hi Rosalinda – there may be a way we can help you. There are short-term care policies that aren’t as expensive yet can give you some meaningful coverage. Please do complete the questionnaire at https://www.gotltci.com/contact-us/ so we can see if you and your husband appear to be insurable. Please email Lawrence@ltcconsultants.com after you have completed it so he can take a quick look and see if a STC policy might be the answer for you.

    • Ellen Blazucki on September 7, 2015 at 9:01 am
    • Reply

    I read Terry Savage’s column in Sun.
    I have LTC but husband does not. He’s 64 and has several health issues. Can he still get LTC. He’s afraid of costs. I got mine from JHU and pay $600+ twice a year.
    Thank you.

    1. Hi Ellen, thanks for your question. We would have to find out more about your husband’s health issues but even if he is not insurable for traditional long-term care insurance, there is an annuity with long-term care benefits for which your husband could qualify. It would also protect the money you put into it from stock market losses while allowing it to grow if the market does well and provide him with a guaranteed lifetime income. If this is something that interests you, please email lawrence@ltcconsultants.com and he will reach out to you for a personal consultation with no obligation to buy anything.

    • Lisa D Wilson on October 3, 2014 at 5:24 am
    • Reply

    I am47, looking for ltc jnsurance. Is it possible and advisable to combine life and ltc together. Trying to get a head of the game

    1. Congratulations on taking the very important step to plan for LTC at age 47 Lisa! Yes it is possible to combine life and LTC together if that is in your best interest. I am here for people who don’t have a local professional who is skilled and knowledgeable in planning for long-term care. If you would like me to help you with this, please take a couple of minutes to complete the short questionnaire at https://www.gotltci.com/contact-us/. That gives me some basic information to work with to see how best to help you.

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