Key facts
- Long-term care costs have risen faster than general inflation for decades.
- Nursing home costs have increased by 212% and adult day services by 109% since 1997.
- Care services prices have risen 17% since 2023, compared to 11% for overall inflation.
- Caregiver wages have increased substantially, contributing to the rising cost of care.
- A shortage of care workers is projected to worsen, exacerbating the crisis.
- Many families are unprepared for the high costs, spending hundreds of thousands of dollars on care.
The escalating cost of long-term care is creating a significant financial burden for millions of Americans, with prices for services like nursing homes and assisted living rising faster than overall inflation. This trend, which has persisted for decades, is forcing families to make difficult choices, including opting for lower-quality care, depleting their savings, and derailing careers.
Families interviewed by Business Insider reported spending hundreds of thousands of dollars on care for loved ones. Tamara Johnson, for example, estimated her family spent over $700,000 on care for her mother and husband. Many were unprepared for these costs, resorting to methods like tapping home equity, seeking family contributions, taking out loans, or leaving their jobs to become full-time caregivers.
The ballooning costs are attributed to a combination of factors, including steep increases in caregiver wages, higher insurance premiums, transportation expenses, and broader service price hikes. Experts warn that the demand for care workers is set to outstrip supply due to an exodus during the pandemic and changes in immigration policies. Compounding this, demographic shifts indicate that in a few years, the U.S. will have more adults aged 65 or older than children under 18.
Long-term care costs for nursing homes and adult day services have outpaced general inflation by 212% and 109% respectively since 1997. More recently, care services prices have risen about 17% since 2023, compared to an 11% increase in overall inflation. Caregivers are also contributing an average of $7,000 annually out-of-pocket for caregiving resources. Wages in the nursing and residential care sector have seen substantial growth, rising 57% from 2016 to 2026, outpacing the 47% increase in overall private sector earnings.