How much does long-term care cost in 2025?

Genworth's 2025 Cost of Care Survey reports median annual costs of $111,325 for a private nursing home room, $98,500 for semi-private, $64,200 for assisted living, and $71,900 for a home health aide at 44 hours per week.

Does Medicare cover long-term care?

Medicare covers only limited short-term skilled care, typically up to 100 days following a qualifying hospital stay. It does not cover custodial long-term care (help with activities of daily living). Medicaid covers long-term care only after the recipient has spent down assets to state-specific eligibility limits.

What is a hybrid LTC annuity?

A hybrid LTC annuity combines deferred annuity features with accelerated long-term care benefits. If the contract holder qualifies for LTC (typically via ADL or cognitive impairment), the annuity pays a multiple of the contract value toward care costs. If care is never needed, the contract continues as a standard deferred annuity.

LTC Costs Cross $110K/Year: Hybrid Annuity Options (2026)

Newsroom

Published April 15, 2026 by the AnnuityJournal Editorial Team.

WASHINGTON, D.C. – The cost of long-term care in the United States has climbed past $110,000 per year for a private nursing home room in 2025, according to Genworth’s annual Cost of Care Survey, and care inflation is now outpacing general CPI by a wide margin. The widening gap between retirement savings and projected care costs is putting renewed pressure on families and on the retirement planning industry to find workable financing solutions.

Recent research from the Urban Institute estimates that nearly 70% of Americans turning 65 today will need some form of long-term care during their remaining lifetime. Roughly one in five will need care for more than five years. Neither Medicare nor standard health insurance covers most long-term care costs; Medicaid covers care only after a recipient has spent down assets to state-specific eligibility limits, which typically means exhausting most retirement savings first.

Care Costs Outpacing Inflation

Genworth’s 2025 survey reported the following median annual costs:

Private nursing home room: $111,325
Semi-private nursing home room: $98,500
Assisted living facility: $64,200
Home health aide (44 hours/week): $71,900
Adult day care (5 days/week): $24,000

Nursing home costs rose approximately 4.9% from 2024 to 2025, roughly double the Bureau of Labor Statistics headline CPI for the same period. Wage pressure on direct-care workers is the largest single contributor.

The Family Financing Gap

Few American families are financially positioned to absorb those costs out of pocket. According to a 2025 Employee Benefit Research Institute (EBRI) survey, fewer than 30% of retirees have any dedicated long-term care insurance coverage. The remaining majority rely on a mix of personal savings, family caregiving, and (eventually) Medicaid after spend-down.

Stand-alone long-term care insurance has struggled as a product category. Premiums have risen sharply on legacy policies over the past two decades as insurers recalibrated claims assumptions, and many older carriers have exited the stand-alone LTC market entirely. Only a handful of carriers still write new stand-alone LTC policies as of 2026.

Hybrid Annuities and Life Policies Emerge

In response to the stand-alone LTC market decline, insurers have developed hybrid products that combine long-term care benefits with annuities or permanent life insurance. Two structures dominate the market:

LTC annuities (sometimes called care-linked annuities) pay accelerated benefits if the contract holder triggers LTC qualification (typically two or more activities-of-daily-living impairments, or cognitive impairment). The LTC payout is a multiple of the contract value, effectively leveraging the deposit for care costs. State Life and OneAmerica’s Annuity Care series is one of the most widely distributed examples. If the contract holder never needs care, the annuity continues as a deferred income or accumulation product. For hybrid annuity background, see our guide to long-term care annuities.

LTC life insurance attaches an accelerated-benefit rider to a permanent life policy. If care is needed, the death benefit is drawn down early to pay for care. If care is never needed, the death benefit passes to heirs. Lincoln Financial MoneyGuard, Nationwide CareMatters, and Securian SecureCare are the three largest products in this category.

Who Should Consider Hybrid Products

Hybrid LTC products are most often suitable for buyers in their late 50s through early 70s with $250,000 or more in investable assets who want to protect against the catastrophic scenario of needing extended care. The trade-off compared to stand-alone LTC insurance is that hybrid premiums are typically funded with a single deposit or a limited pay schedule rather than ongoing annual premiums, which removes the risk of future premium increases.

Buyers should also compare against the baseline alternative of self-insuring via traditional retirement savings. For some retirees, simply earmarking an HSA or brokerage account for potential care costs, paired with a SPIA or DIA for base income, is a reasonable alternative.

What This Means for Retirees

Long-term care planning is rarely anyone’s favorite retirement topic, but the cost curve makes it one of the most consequential. A single five-year stay in a private nursing home at 2025 prices would run well over $550,000, before accounting for continued care inflation during the stay. That is enough to eliminate the retirement savings of most American households.

For annuity buyers specifically, the takeaway is that hybrid LTC annuities and life-insurance-based LTC products are now the most commonly available pre-funded solutions. Review our Lincoln Financial and Mutual of Omaha carrier reviews for context on two of the most active carriers in this space.