This Retirement Expense Is Rising Fast — Have You Planned for It?

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Worried senior couple
wavebreakmedia /

Long-term care is expensive — and it’s growing even more costly.

The annual median cost of long-term care services increased by an average of 4.5 percent from 2016 to 2017, according to Genworth Financial’s 2017 Cost of Care Survey. That rate outpaces inflation.

Long-term care offers help with everyday tasks such as eating, bathing and dressing. Among people ages 65 and older, 70 percent eventually are expected to need some type of long-term care, according to Genworth, an insurance company. Standard health insurance policies do not cover the cost of long-term care.

Genworth found that the specific long-term care services that increased most in cost over the past year are:

  1. Home health aide services — up 6.17 percent to $21.50 an hour
  2. Private room nursing home care — up 5.5 percent to $267 a day
  3. Homemaker services (such as cooking, cleaning and running errands) — up 4.75 percent to $21 an hour
  4. Semi-private room nursing home care — up 4.44 percent to $235 a day
  5. Assisted-living facilities — up 3.36 percent to $123 a day

Long-term care costs can also vary considerably by state. For that reason, it’s important that retirees ask critical questions about long-term costs before moving.

For example, the median annual cost of home health aide services is $49,192 nationally. But the median cost can be much higher within a state. This cost is highest in:

  1. North Dakota: $63,972
  2. Alaska: $63,492
  3. Minnesota and Wyoming: $61,776

The median annual cost of a private room at a nursing home is $97,455 nationally but significantly higher in some states. It’s highest in:

  1. Alaska: $292,000
  2. Connecticut: $162,060
  3. Hawaii: $158,593

You can learn more about long-term care costs in your state by using Genworth’s cost comparison tool.

Paying for long-term care

Clearly, the cost of long-term care can exceed the budgets of even middle-class Americans.

Medicaid generally covers the costs of long-term care in nursing homes and at home, according to the federal government website But not everyone is eligible for Medicaid. It’s a joint federal and state health insurance program for folks with low income or with disabilities.

Medicare, the federally subsidized health insurance program for seniors, generally does not cover long-term care. Under certain circumstances following a hospitalization, Medicare will help pay for a skilled nursing facility, hospice care or home health care — but only for up to 100 days.

This leaves long-term care insurance as perhaps the most affordable solution for many people. Money Talks News founder Stacy Johnson details the pros and cons of it in “Ask Stacy: Should I Buy Long-Term Care Insurance?

Just note that long-term care insurance is a purchase best made by sometime in your 50s, as we explain in “Retirement Is Coming — Make These Money Moves in Your 50s.”

How do you feel about the rising cost of long-term care? Sound off below or on our Facebook page.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.