The Costs of LTC: Significant Implications for Financial Planning

November 2012

Unless they’ve recently played a key role in helping someone resolve a long term care crisis, few people fully grasp what paid, professional long term care actually costs.  Yet it’s impossible to plan for the future adequately without this critical information, since understanding the financial exposure involved may help an individual decide whether or not to purchase long term care insurance.


Genworth Financial’s most recent Cost of Care Survey, published this year, provides the national median costs listed below.  It’s important to keep in mind that some costs, especially for facility-based care, vary dramatically among regions, and even within a state.  Geographic-specific information can easily be found in the complete report, or online.


Homemaker services through a licensed agency:


$144/day for an 8-hour shift.   Daily 8-hour shifts cost $4,320/month.


Home health aide (hands-on help, such as bathing, dressing):



Adult day care/day health:



Assisted living, one-bedroom, single occupancy:



Nursing home, semi-private room:

$200/day, $6,000/month.


There are many additional considerations relative to care cost.  Many home care service agencies provide services on the basis of a minimum number of hours only; and will not, for example, send out a caregiver for only an hour or two.  Adult day program hours are usually well short of an 8-hour day, and so may not be long enough to accommodate the working and commuting schedule of a primary caregiver.  With regard to the typical assisted living facility, costs quoted generally do not include additional services such as personal care or medication management.


Also, please keep in mind that these are today’s median costs.  Over the last 5 years, home-based care costs have averaged an inflation rate of just over 1% a year, while assisted living facilities and nursing homes have experienced inflation rates of 5.7% and 4.5%, respectively.


Long term care insurance is the best way for most people to instantly and cost-effectively create a pool of funds specifically set aside for long term care costs.   No financial plan or retirement plan is complete until the funding for possible long term care is addressed.


Genworth Financial’s 2012 Cost of Care Survey can be found here