What Does Care Cost?

The average cost of a shared room in a nursing home is more than $72,000 a year. In some areas of the country, costs exceed $100,000 a year. The average stay in a nursing home is 2.8 years, and 10 percent of people who enter a nursing home will stay there five years or more. For families with no insurance that covers nursing home costs, these expenditures can quickly deplete savings.

Home- and community-based services are less expensive, but they can still be costly. Home- and community-based services, such as help from home health aides, homemaker services, and adult day care, cost about one-fifth as much per person as institutional care. Even so, that can total thousands of dollars a year. Average charges for adult day services are $67 a day; homemaker services, $19 per hour; and home health aides, $21 per hour. Based on average charges, a person needing assistance from a home health aide for three hours daily, five days a week, could spend more than $16,000 a year on care.

The costs of care are rising faster than inflation. From 2008 to 2009, nursing home costs rose by 3.7 percent, and the cost of home health aide services rose by more than 5 percent. The overall rate of inflation was -0.2 percent.

In 2009, the United States spent an estimated $177 billion on long-term services. Current spending on long-term services is more than 7 percent of total health care costs, and it is projected to increase dramatically as the population ages. More than 60 percent of costs are paid for through government programs, including Medicaid and Medicare.