Most families don’t plan how they’ll pay for care until the need arrives. Then comes a hard discovery. A 2025 Nationwide Retirement Institute survey found that 58% of adults mistakenly believe Medicare covers long-term care. Medicare does not cover long-term custodial care, including at home when care is primarily custodial. Yet approximately 70% of Americans turning 65 will need some form of long-term care. Advertiser disclosure +2
What care actually costs
Higher-end agency care typically falls between about $38 and $54 per hour, depending on your market, the level of care, tailored care plan, and caregiver expertise. The 2025 national median across all agencies is $35 per hour. Hours drive the total: at that median rate, 20 hours of care per week comes to approximately $36,000 annually, while 40 hours approaches $73,000. At the higher end of the market, 40 hours of weekly care can exceed $110,000 per year. These are planning estimates, not individual quotes, but they illustrate why the number of hours matters as much as the hourly rate.
How families pay
Most families combine several sources. Here are the main ones, and what to know about each.
1. Savings, income, and retirement accounts. This is the most common starting point. Withdrawals can carry tax consequences, and the order matters, so a fiduciary planner and a CPA can help sequence them.
2. Long-term care insurance. If a policy exists, find it early. Most policies reimburse eligible expenses. Confirm the benefit triggers, the waiting period, the daily maximum, and whether the policy requires care from a licensed agency. Some life insurance and annuity products include long-term care benefits, so check those too. moneytalksnews
3. VA benefits. Wartime veterans and surviving spouses may qualify for Aid & Attendance, a pension for people who need help with daily activities, usable toward home care, assisted living, and skilled nursing. The 2026 maximums are $2,424 per month for a single veteran and $1,558 for a surviving spouse, and there is a net worth limit of $163,699. It rarely covers the full cost, but it can offset a meaningful share. Work with a VA-accredited representative. Aid & Attendance Fact Sheet: Everything You Need to Know +2
4. Home equity, including reverse mortgages. Reverse mortgages have a complicated reputation, and for good reason. A 2009 GAO review flagged product complexity and consumer protection concerns. Today’s landscape differs. FHA-insured Home Equity Conversion Mortgages require counseling, include non-recourse protection, and require a financial assessment, for homeowners 62 and older. There are now ethical, well-regulated options, but this is a major decision. Balances grow over time, and the loan generally comes due when the homeowner permanently moves out or passes away, so ask the counselor exactly what triggers repayment. Speak with an independent HUD-approved counselor, an elder law attorney, and your financial advisor first. Selling or downsizing and home equity lines are other routes to compare. gaolongbridge-financial
5. Siblings and family contributions. Families split costs equally, proportionally to income, or with credit for hands-on caregiving time. What matters is agreeing early and in writing: who manages the money, how receipts are tracked, and what happens if funds run short. An elder law attorney can help structure a family agreement, and an Aging Life Care Professional can often help facilitate the conversation.
6. Public programs. Medicaid can cover long-term care for people who meet state financial and functional rules, often after substantial assets have been spent. Rules vary by state, so speak with an elder law attorney before transferring any assets. moneytalksnews
The cost of waiting for a crisis
Planning is almost always easier than reacting. When a fall or stroke forces a hospital discharge, families may have days to decide. Medicare covers short-term skilled care, up to 100 days in a skilled nursing facility after a qualifying hospital stay, but not the long-term custodial support that often follows. The average hospital cost of a fall injury is about $30,000, and Medicare pays the largest share of fall-related medical spending. The bigger exposure for families is what comes next: ongoing care that must be arranged and paid for immediately. When You Turn 65, There’s a 7-in-10 Chance You Will Need Long-Term Care. Don’t Assume Your Family Will Provide It +2
A crisis narrows your choices. There’s no time to compare agencies, review a policy, find documents, or hold the sibling conversation. Families who have done the groundwork can respond instead of scrambling.
Your planning checklist
- Locate the documents: insurance policies, account statements, the deed, and veteran discharge papers.
- Put legal documents in place while your parent can sign them: financial power of attorney, health care proxy, and advance directives.
- Model three scenarios: 20 hours a week, 40 hours a week, and a community setting. About one in five people who need care will need it for more than five years. moneytalksnews
- Hold the family meeting, and write the agreement down.
- Revisit every six months, or after any health change.
Assemble your team
| Professional |
How they help |
| Aging Life Care Professional (geriatric care manager) |
Often trained in nursing, social work, gerontology, or psychology, they assess needs, coordinate a plan, and navigate local resources. They are typically hired by the hour. Look for credentials such as CMC. |
| Elder law attorney |
Powers of attorney, trusts, family agreements, and eligibility planning |
| Fiduciary financial planner or wealth manager |
Models cash flow and tax strategy over years. Ask whether they are a fiduciary and how they’re paid. |
| CPA or tax advisor |
Medical-expense deductions, withdrawal sequencing, and household employment taxes |
| Professional fiduciary or daily money manager |
Bill-paying and trustee roles when family can’t or shouldn’t |
| Geriatrician or primary care physician |
A medical outlook that informs how much care may be needed, and when |
| Long-term care insurance specialist |
Policy review and claims What is an Aging Life Care Professional? +2 |
A strong care agency works alongside this team, and we welcome that collaboration.
Plan deliberately, not reactively
The goal isn’t to spend less. It’s to spend with intention, so your parent can receive excellent care and your family isn’t deciding under pressure.
Connect with our local care team to talk through what care could look like, and what it may cost, for your family.
This article is for general information and is not financial, legal, or tax advice. Consult qualified professionals about your situation.
Sources: CareScout Cost of Care Survey 2025; AARP and National Alliance for Caregiving, Caregiving in the US 2025; VA pension rates; U.S. GAO; CDC; Aging Life Care Association; IRS household employer guidance.
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