Long-Term Care Costs Drain Middle Class, Report Finds

NEW YORK—A new report from the Roosevelt Institute examines how the cost of long-term home health care is negatively impacting the finances of the middle class and suggests the United States may lack an affordable and accessible long-term care system.

“Over the last two decades, long-term care costs have risen sharply, precisely as the population over 65 in the U.S. has grown at a rapid pace,” the report reads. “This stark price hike is not a surprise. Demand for long-term care services is increasing as the US population ages, but the industry has long had problems attracting and retaining workers. Long-term care workers often face low pay and poor working conditions, with 36% living in or near the poverty line. This means long-term care supply is short and has been for decades. When demand outpaces supply, prices will only continue to rise.”

Key takeaways from the report include:

• Median household income for those aged 65+ is approximately $57,000, but nursing home care can cost between $115,000 and $129,000 annually.
• Few Americans have enough savings to cover long-term care costs out-of-pocket. After the onset of care needs, middle-class individuals face permanent wealth reductions to just 42% of their original levels, whereas the top quartile of earners eventually recover 94% of their assets.
• Even among upper-middle-class couples with lifetime earnings over $4.75 million, nearly half will spend down their assets paying for long-term care and eventually enroll in Medicaid if they require long-term care for five years or more.
• Unpaid family care is not without its own intergenerational costs. Unpaid caregivers provided an estimated $600 billion in economic value in 2021, often at the expense of their own career growth and retirement savings.

“Long-term care is not just an individual health issue, but a structural driver of wealth inequality,” the report said. “By maintaining a system that depends on unpaid family caregiving, provides public support only after families have nearly exhausted their savings, and allows private, profit-driven companies to capture rising care costs, the U.S. effectively penalizes aging.”

To access the full report, click here.