MarketWatch

A majority of Americans are making a big mistake when it comes to long-term care

Story by Jessica Hall - 4 min read

Original pica & story : A majority of Americans are making a big mistake when it comes to long-term care

A majority of American adults are banking on a government safety net to provide long-term care when they’re older. But they may be in for a surprise when they learn that this program doesn’t cover long-term-care expenses at all.

The government program they think they’ll be able to rely on for home care, assisted living or extended nursing-home stays? Medicare.

In fact, 58% of Americans believe Medicare will cover long-term-care expenses, according to the 2025 Nationwide Retirement Institute Long-Term Care survey.

Yet Medicare does not cover the long-term care that many people will need as they age, such as help with the activities of daily living like bathing, dressing, eating and using the toilet. That help is considered non-medical and those costs must be paid for out of pocket or provided by family caregivers.

The cost of a home health aide — which includes “hands-on” personal assistance with activities such as bathing, dressing, and eating — had an annual median cost of $77,792, according to the Genworth and Care Scout Cost of Care Survey for 2024.

Medicare also does not cover assisted living. The median cost of assisted living in the U.S. is $5,900 per month, according to the 2024 Genworth Cost of Care Survey.

A 65-year-old retiring in 2024 could expect to spend an average of $165,000 on healthcare and medical expenses during their retirement — yet the average American estimated their costs would total only about $75,000, according to Fidelity Investments.

Medicare also only pays for nursing-home care on a limited basis. Medicare Part A covers the full cost for the first 20 days of a covered nursing-home stay, but for days 21 to 100, you pay daily coinsurance. After day 100, you are responsible for all costs. The national annual median cost of a semiprivate room in a nursing home was $111,325 in 2024, while the cost of a private room in a nursing home was $127,750, according to Genworth.

Women, on average, need 3.7 years of long-term care, while men need 2.2 years of such care.

More than half of Americans (58%) are concerned about their ability to pay for their or their partner’s long-term care, and 59% say they plan to use Medicaid to help pay for those expenses, the Nationwide study found.

Medicaid, intended for individuals with extremely limited income and assets, requires that people spend down their assets to just $2,000 to qualify.

Medicaid also has been targeted for cuts under the GOP’s recent tax and spending megabill, which could limit the services it covers, analysts have said.

Medicaid’s strict asset test makes it difficult for people to qualify, and it’s a public safety net that shouldn’t be relied on by most.

Nationwide found that a limited number of people (34%) who work with a financial professional still have not discussed long-term-care costs, with the most common reason being that their adviser has not brought it up as a planning topic.

The two biggest thing in retirement are taxes and healthcare.  Unfortunately, the responsibility for learning about long-term care and providing funding for it falls on the person themselves.