Half of Senior Care Costs to be Paid Out-of-Pocket

People turning 65 in the next four years are projected to spend nearly $140,000 on average for long-term services and supports—and more than half of that sum could come from their own bank accounts, according to a new report from the U.S. Office of the Assistant Secretary for Planning and Evaluation (ASPE).

On average, an American turning 65 between 2015 and 2019 will incur $138,100 on average in future LTSS costs, the report states. Of that amount, $72,200—or 52.3%—is projected to be out-of-pocket spending. Private insurance is expected to cover less than 3% of costs; public programs such as Medicare and Medicaid are expected to account for roughly 45% of total expenditures.

For community-based care, which includes home-based and residential care that does not rise to the nursing facility level, private payments are anticipated to account for 71% of expenses. That translates to an average out-of-pocket total of $49,600.


About half (52%) of Americans turning 65 today will develop a disability serious enough to require long-term care services and supports (LTSS), although most will need assistance for less than two years, according to the report.

However, about one in seven adults will have a disability for more than five years. 

Of those Americans turning 65 between now and 2019 who stay in a nursing facility, the average cost of services is $65,300, with 34.5% of those costs being paid out-of-pocket. 


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“Many Americans prefer not to think about this need for assistance or who will provide it,” ASPE says in the report. “They underestimate how likely it is they will need it and how much it will cost. Even if they correctly consider the chances of becoming disabled and needing daily help, many Americans mistakenly assume their health insurance covers these costs. However, health insurance does not cover LTSS costs, and Medicare, the major public insurance program for older Americans, does not cover most LTSS expenses.”

Written by Cassandra Dowell

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