Long-term care costs have surged dramatically over the past decade, rising approximately 50% from 2019 to 2024—a pace that far outstrips wage growth and general inflation. For someone now entering their 70s, this means a year in assisted living that might have cost $47,000 in 2014 will likely cost around $71,000 today, a sobering shift that reshapes retirement planning assumptions. The acceleration shows no signs of slowing, with skilled nursing facilities posting a 7% increase in just one year (2023 to 2024) and assisted living jumping 10% in the same period.
What makes this trend particularly urgent is the income-cost mismatch. While long-term care expenses climbed 50% in five years, income for those 65 and older grew by only 22% over a similar timeframe. This gap means millions of retirees face a shrinking window to plan and prepare before care needs arrive. The staffing crisis driving these costs—with 96% of nursing facilities reporting higher staffing expenses that now consume over 50% of operating budgets—suggests these increases will continue accelerating in the years ahead.
Table of Contents
- How Fast Are Long-Term Care Costs Actually Rising?
- Why Are Costs Accelerating and What’s Driving the Trend?
- What Are the Current Average Costs by Care Type?
- How Do These Increases Compare to Retirement Income Growth?
- What About Medicaid and Government Support?
- The Regional Cost Variations You Need to Know
- Looking Forward—What Should Change and Why It Probably Won’t
- Conclusion
How Fast Are Long-Term Care Costs Actually Rising?
The numbers tell a story of relentless acceleration. Nursing home costs have jumped 25% in recent years, while assisted living facilities have raised their fees by 10% in just the past year alone. A semi-private room in a skilled nursing facility now costs $111,325 annually, up from $104,028 just 12 months prior. Private rooms are worse: $127,750 today versus $116,800 last year—a 9% one-year increase that outpaces most investment returns. Even more striking are the outliers.
Adult day services—often used by families managing part-time care—have risen 33% over the measured period. These aren’t premium luxury facilities charging celebrity-care rates. These are ordinary providers in ordinary markets across the country. The inflation rate for long-term care specifically reached 4.9% in 2024, substantially higher than the general inflation rate the Federal Reserve targets. This divergence matters because it means your assumptions about care costs growing at “normal” rates are already broken.
Why Are Costs Accelerating and What’s Driving the Trend?
Staffing is the primary culprit. Skilled nursing facilities report that direct labor costs consume more than half their operating budgets, and 96% of providers have raised what they pay nursing staff, aides, and support personnel in response to competition and scarcity. The labor market for care work remains tight because the work is demanding, wages have historically lagged other professions, and younger workers continue to move into higher-paid alternatives.
This creates a vicious cycle: facilities raise prices to pay workers more, which reduces demand slightly, which makes the remaining patient load more expensive to serve, which requires further price increases. The staffing shortage also has a darker implication often overlooked by retirees: limited availability. It’s not just that care costs more—in many regions, finding a bed with adequate staffing is becoming difficult regardless of budget. Facilities are reducing admissions, extending waitlists, or shifting toward higher-acuity patients (more profitable per bed). This means that tomorrow’s costs will likely rise not because of inflation alone, but because demand will outpace supply in many markets.
What Are the Current Average Costs by Care Type?
Today’s baseline costs in 2025 provide a concrete reference point for retirement planning. A semi-private room in a nursing home ranges from $111,325 to $114,975 annually. Private rooms run $127,750 to $129,575 per year. Assisted living averages $70,800 to $71,040 annually.
For context, that’s roughly equivalent to private college tuition, paid every single year, with no graduation date in sight. Home care and in-home support services occupy a different cost structure but often surprise families with their cumulative expense. A few hours per week of professional in-home care can cost $25,000 to $40,000 annually depending on location and service intensity. Many families begin with home care precisely because it’s cheaper than facility options—then discover that as health needs increase, the cost-per-hour remains high while the hours required multiply dramatically. The assisted living option that seemed prohibitively expensive three years ago suddenly looks reasonable once home care has consumed $60,000 in a single year.
How Do These Increases Compare to Retirement Income Growth?
The mismatch between cost growth and income growth is the crux of the planning problem. Someone who was 65 in 2015 and received $2,500 monthly in Social Security will receive roughly $3,050 today, a 22% increase over a decade. Someone needing nursing home care faced costs of roughly $90,000 annually in 2015 and faces $111,325 today, a 24% increase in just the last couple years alone. The median American household over 65 has not accumulated enough savings to absorb even a single year of facility care without dramatic lifestyle reductions.
The practical implication: you cannot rely on “inflation-adjusted” retirement income estimates from old financial plans. A plan that assumed 3% annual care cost growth is wildly optimistic. Plans that assumed care wouldn’t be needed until age 85 may need revision if cost acceleration means fewer people can afford to wait. The tradeoff many families face is whether to plan conservatively (set aside more assets for care, retire on less), plan for Medicaid as the backstop (accept the transfer of assets and eventual government dependence), or plan to age in place with family caregiving (accept non-monetary costs on adult children’s careers and wellbeing).
What About Medicaid and Government Support?
Medicaid picks up a significant share of long-term care costs nationally—roughly 42% of all spending on nursing facilities and almost all costs for lower-income beneficiaries. This might seem like a safety net, but recent projections show that Medicaid spending on long-term care is expected to increase 39% between 2026 and 2036. This accelerating government cost is creating pressure in state budgets and raising questions about the program’s sustainability. The warning here is critical: Medicaid’s growth projections assume continued federal and state funding, but the politics of healthcare spending remain volatile.
A retiree banking on Medicaid coverage should understand that the program’s benefits, eligibility rules, and reimbursement rates have shifted multiple times in the past 20 years and could shift again. Additionally, Medicaid coverage often means fewer choices in facility selection and sometimes lower-quality accommodations. States also impose “spend-down” requirements, meaning you must exhaust nearly all personal assets before Medicaid pays anything. The safety net exists, but it’s frayed and conditional.
The Regional Cost Variations You Need to Know
Long-term care costs vary significantly by geography, and this creates planning uncertainty. A year of assisted living in rural Mississippi might cost $45,000, while the same care in Massachusetts or California can exceed $100,000 annually. This variation matters if you’re considering where to retire or where you might need care in later years.
Some retirees deliberately move to lower-cost states anticipating future care needs, though this strategy carries its own risks—moving far from family support networks when care becomes necessary is emotionally difficult and can limit your options. Urban areas generally charge more, but also offer more provider competition and often have better-trained staff. Rural areas are cheaper but face chronic staffing shortages and longer waitlists. The hidden cost of some geographic choices is reduced autonomy in care selection—move to a small town expecting low costs and you may discover only two facilities serve your needs, and both are understaffed.
Looking Forward—What Should Change and Why It Probably Won’t
The long-term care industry faces a genuine crisis that costs alone cannot solve. Simply raising prices higher won’t recruit enough workers because the fundamental problem is that care work remains undervalued relative to its demand and difficulty. Some facilities are experimenting with higher wages (which drives their price increases), better scheduling, and technology to reduce caregiver burden. Others are shifting toward more concentrated, higher-acuity patients who generate better margins.
None of these solutions will make care cheap again. Projections suggest costs will continue outpacing inflation for at least the next decade. The Medicaid spending growth forecast of 39% between 2026 and 2036 implies an annual increase of roughly 3.4%—above general inflation but likely below the actual rate care providers will need to raise prices to maintain staffing. This means the gap between what retirees can afford and what care actually costs will continue widening unless something structural changes in how we fund, staff, or deliver long-term care.
Conclusion
The 47% increase in long-term care costs over a decade is not a temporary fluctuation or a regional problem. It reflects fundamental labor market pressures, demographic demand, and the underinvestment in care infrastructure across the country. For anyone within 15 years of retirement, this trend is no longer a distant planning concern—it’s a present reality that should reshape assumptions about healthcare expenses and asset preservation in later years.
The time to act is now. Retirees who haven’t reviewed their long-term care assumptions since 2015 or 2020 are planning based on obsolete data. Whether through long-term care insurance, increased personal savings for care, strategic relocation to lower-cost regions, or acceptance of eventual Medicaid dependence, the planning choice cannot be ignored. The costs will arrive whether you’re prepared for them or not.