Long-term care is expensive.

One year of care in a nursing home, based on the 2006 national average, costs over $62,000 for a semi-private room. One year of long-term care at home, assuming you need periodic personal care help from a home health aide (the average is about three times a week), would cost almost $16,000 a year.

Costs for long-term care services vary greatly depending on the type and amount of care you need, the provider you use, and where you live. For example, many care facilities charge extra for services provided beyond the basic room-and-board charge, although some may have "all inclusive" fees.

Home health and home care services are usually provided in two-to-four-hour blocks of time referred to as "visits." An evening, weekend or holiday visit may cost more than a weekday visit. Some community programs, such as adult day service programs, are provided at a per-day rate, and rates may differ based on the type and variety of programs and services offered.

Who Pays for Long-Term Care?

Consumer surveys have revealed some common misunderstandings people have about which public programs pay for long-term care services. Many people believe they can rely on Medicare to pay for any long-term care services they will need. However, Medicare only pays for long-term care if you require skilled services or recuperative care for a short period of time. Medicare does not pay for what comprises the majority of long-term care services - non-skilled assistance with Activities of Daily Living.

The average costs in the United States (in 2006) are:

$171/day for a semi-private room in a nursing home
$194/day for a private room in a nursing home
$2,691/month for care in an Assisted Living Facility (for a one-bedroom unit)
$25/hour for a Home Health Aide
$17/hour for a Homemaker services
$56/day for care in an Adult Day Health Care Center

Long-term care insurance is a relatively new type of insurance developed specifically to cover the costs of long-term care services, many of which are not covered by traditional health insurance or Medicare.

These include services in your home such as assistance with Activities of Daily Living as well as care in a variety of facility and community settings.

There are, however, an increasing number of private payment options that help to cover the costs of long-term care services. These include long-term care insurance, reverse mortgages, and other options.

It is important to understand the differences among the public programs and private financing options for long-term care services. Each public program and each private financing source has its own rules for what services it covers, eligibility requirements, co-pays, and premiums.

The total amount spent on long-term care services in the United States (in 2003) was $183 billion. This does not include care provided by family or friends on an unpaid basis (often called "informal care.") It only includes the costs of care from a paid provider.