Long-Term Care Costs and Taxes (2026)

The 2025 CareScout Cost of Care Survey, the successor to the long-running Genworth survey and released in 2026, places the US national median cost of a private room in a nursing home at $129,575 per year and a semi-private room at $114,975 per year, while federal tax rules for 2026 cap the qualified long-term care insurance premium a person over age 70 may treat as a deductible medical expense at $6,200 (Sources: CareScout 2025 Cost of Care Survey; IRS Rev. Proc. 2025-32).

Why long-term care sits at the intersection of cost and tax

Long-term care refers to the personal assistance a person needs when a chronic illness, disability, or cognitive decline makes daily tasks difficult. That assistance can be delivered at home, in an adult day program, in an assisted living community, or in a nursing facility. Two features make it distinct from most other retirement expenses. First, the annual cost is high and continues to rise, even as the pace of increase has moderated in the latest survey year. Second, the public programs most retirees expect to rely on, Medicare in particular, cover only a narrow slice of it.

This report assembles the verified 2026-relevant figures relevant to long-term care planning that a household or a journalist would need to frame the question accurately: what care costs, what Medicare and Medicaid do and do not pay for, how the federal tax code treats qualified long-term care insurance, and what the government’s own research says about the likelihood and duration of needing care. Every figure below carries a year and a named source. Where a category definition changed between survey years, that break is flagged rather than smoothed over. For related retirement tax topics, see the Q3 Advisors reference on Medicare cost in retirement for 2026.

Median long-term care costs by setting (2025 CareScout survey)

The CareScout Cost of Care Survey is the direct successor to the Genworth Cost of Care Survey; CareScout is a Genworth company. The 2025 edition collected more than 25,000 rates from long-term care providers nationwide during a survey window of July to November 2025 and was released in 2026 (Source: CareScout 2025 Cost of Care Survey). Rates are captured at the Metropolitan Statistical Area level and reported as national medians. The survey’s stated theme for 2025 was relative stabilization: costs remain high, but the rate of increase moderated compared with the prior year.

The table below reproduces the 2025 national median annual cost for each setting, the survey’s stated rate basis, the prior-year 2024 figure for context, the survey-reported year-over-year change, and the computed dollar change where the categories are comparable.

Note A (methodology break): The 2025 survey consolidated the historical Home Health Aide and Homemaker Services categories into a single Non-Medical In-Home Care line, consistent with the 2024 finding that roughly two-thirds of agencies charged identical rates for both services. A direct 2024-to-2025 dollar change for in-home care is therefore not computable without conflating incompatible categories. The 2025 figure of $80,080 (up 3%) is closest in basis to the 2024 Home Health Aide line of $77,792 (Source: CareScout 2025 and 2024 Cost of Care Surveys).

Verifying the published annuals against the stated rate basis

Each published annual median can be reconstructed from the survey’s stated rate basis, which is a useful check for anyone citing these numbers:

• Non-Medical In-Home Care: $35 x 44 hours x 52 weeks = $80,080 (matches published).
• Adult Day Health Care: $95 x 260 days (5 days x 52 weeks) = $24,700 (matches published).
• Assisted Living: $6,200 x 12 months = $74,400 (matches published).
• Nursing Home, Semi-Private: $315 x 365 days = $114,975 (matches published).
• Nursing Home, Private: $355 x 365 days = $129,575 (matches published).

The trend: growth moderated in 2025 versus 2024

The 2024 survey (fielded July to December 2024, released March 2025) recorded larger increases across several settings: homemaker services rose 10%, assisted living rose 10%, nursing home semi-private rose 7%, and nursing home private rose 9% (Source: Genworth/CareScout 2024 Cost of Care Survey). In the 2025 survey, the same nursing home lines rose 2% and 1% respectively, and assisted living rose 5%. Adult day health care was reported at negative 5% year over year, though the 2025 restated basis of $24,700 differs from the 2024 basis of $26,000, so that decline reflects both real movement and a basis change (Source: CareScout 2025 Cost of Care Survey).

What Medicare and Medicaid do and do not cover

A common planning error is assuming Medicare pays for extended long-term care. It does not. According to Medicare.gov, Medicare does not cover custodial care when that is the only care a person needs, and most nursing home care is custodial care (Source: Medicare.gov, Long-Term Care Coverage page, current 2026). Custodial care means non-skilled personal assistance with activities of daily living such as bathing, dressing, eating, transferring, and toileting.

Medicare Part A does cover skilled nursing facility (SNF) care, but only on a limited, short-term basis, only when skilled care is medically necessary, and only after a qualifying prior inpatient hospital stay under the three-day rule (Source: Medicare.gov, Skilled Nursing Facility Care). The 2026 Part A SNF cost-sharing schedule, published by the Centers for Medicare and Medicaid Services, is as follows.

Source: CMS, 2026 Medicare Parts A and B Premiums and Deductibles fact sheet, and CMS MM14279 CY2026 rate update. For related 2026 Part A figures, the inpatient hospital deductible is $1,736 per benefit period, days 61 to 90 hospital coinsurance is $434 per day, and lifetime reserve day coinsurance is $868 per day (Source: CMS 2026 fact sheet).

Because Medicare stops paying after day 100 of a SNF stay and does not pay for custodial care at all, Medicare.gov itself notes that beneficiaries may look who need long-term care toward Medicaid, if they are state-eligible, or toward private long-term care insurance (Source: Medicare.gov, Long-Term Care Coverage page). Households comparing Medicare premium exposure across income levels may also find the Q3 Advisors reference on Medicare IRMAA 2026 brackets and premiums useful, since income-related surcharges interact with retirement income planning.

Medicaid is the primary payer for long-term care in the US

Medicaid, not Medicare, carries the majority of the nation’s long-term care bill. The United States spent over $400 billion on long-term services and supports (LTSS) in 2022: $284 billion on home and community-based services and $131 billion on institutional care such as nursing facilities (Source: KFF, 10 Things About Long-Term Services and Supports). Medicaid financed 61% of total US LTSS spending in 2022, making it the primary payer for long-term care. Medicaid LTSS spending for the 5.7 million enrollees who used LTSS totaled nearly $234 billion in 2022 (Source: KFF).

This is a high-cost population relative to its size. Among the roughly 5.7 million Medicaid LTSS users, about three-quarters received home and community-based services and one-quarter used institutional settings (2021 data). Medicaid LTSS users represented 6% of Medicaid enrollment but 34% of combined federal and state Medicaid spending in 2021 (Source: KFF). Medicaid eligibility, however, is means-tested, which is why the interaction between care costs and personal assets and income drives so much long-term care planning.

How the federal tax code treats long-term care insurance (2026)

The Internal Revenue Code offers two distinct tax features for qualified long-term care insurance contracts under IRC 7702B: a deduction for premiums, subject to age-based caps, and an income exclusion for benefits, subject to a per-diem limit. Both are inflation-indexed annually by the IRS. The 2026 figures come from IRS Rev. Proc. 2025-32.

Age-based premium deduction caps under IRC 213(d)(10)

Under IRC 213(d)(10), the amount of qualified LTC insurance premiums that may be treated as deductible medical care is capped per insured person, based on the insured’s attained age at the close of the tax year. These caps are the maximum includible-as-medical-expense amount; the premium counts as an itemized medical expense on Schedule A and is deductible only to the extent total unreimbursed medical expenses exceed 7.5% of adjusted gross income (IRC 213(a)). For a married couple, each spouse applies the cap using their own attained age.

Source: IRS Rev. Proc. 2025-32, sec. 4.27 (tax years beginning in 2026); IRS Rev. Proc. 2024-40, sec. 4.28 (2025). Note that the IRS VITA courseware page still displayed the 2025 figures as of this research; the Revenue Procedure PDFs are authoritative for 2026.

The tax-free per-diem benefit limit under IRC 7702B(d)(4)

The second feature governs benefits received. For calendar year 2026, the stated per-diem limitation under IRC 7702B(d)(4) is $430 per day, up from $420 per day in 2025, a computed increase of $10 per day or 2.38% (Source: IRS Rev. Proc. 2025-32, sec. 4.62; IRS Rev. Proc. 2024-40, sec. 4.62). The statutory base amount is $175 per day set in 1998 and indexed for inflation using the same methodology as the premium caps (Source: 26 U.S.C. 7702B(d), Cornell Legal Information Institute).

The exclusion operates under a greater-of rule. Benefits from a per-diem or indemnity qualified LTC contract are excludable from income up to the greater of (a) the per-diem dollar limit in effect, which is $430 per day for 2026, or (b) the actual costs incurred for qualified long-term care services, reduced by any reimbursements received from other sources. Payments exceeding that limitation are includible in gross income. The practical implication: if actual qualified LTC expenses exceed $430 per day, the full actual expense amount can still be received tax-free. The $430 figure is a floor for indemnity policies that pay a fixed amount regardless of actual cost, not a hard cap on policies that reimburse actual cost.

Worked example: applying the per-diem limit

Suppose an indemnity LTC policy pays a flat $500 per day in 2026 while the policyholder’s actual qualified care costs are $300 per day. Under the greater-of rule, the excludable amount is the greater of $430 per day (the 2026 per-diem limit) or $300 per day (actual cost). The excludable amount is $430 per day, so $70 per day ($500 minus $430) would be includible in gross income (illustrative computation applying IRC 7702B(d)(4) and the 2026 $430 figure from Rev. Proc. 2025-32). If instead actual qualified costs were $600 per day, the greater-of comparison yields $600, and the full $500 daily benefit would be excludable because it does not exceed actual cost.

Derived monthly equivalents of the per-diem limit are sometimes cited by industry sources: $430 x 30 = $12,900 per month on a 30-day basis, or $430 x 365 divided by 12 = $13,079 per month annualized. These monthly figures are arithmetic derivations only; the Revenue Procedure and the statute state the limit solely as a per-day amount of $430. Because these benefits and deductions interact with taxable income, readers may also want the Q3 Advisors reference on the Net Investment Income Tax for 2026 and the overview of the retirement tax window.

Likelihood and duration of needing long-term care

Federal research on how likely a person is to need long-term care, and for how long, comes primarily from HHS/ASPE, with underlying analysis by the Urban Institute. Headline risk figures differ by methodology and definition, so each should be cited with its source rather than conflated.

The ASPE 2019 brief, based on the Health and Retirement Study over 1995 to 2014, found that among adults surviving to age 65, 70% develop severe LTSS needs before death, 48% receive some paid care over their lifetime, 28% receive at least 90 days of nursing home care, and 13% receive Medicaid-financed nursing home care (Source: HHS/ASPE 2019 brief). A separate ASPE brief from 2015, revised 2016, using the DYNASIM3 microsimulation for adults turning 65 in 2015 to 2019, framed the risk differently: about 52% of Americans turning 65 will develop a disability serious enough to require LTSS (Source: HHS/ASPE 2015/2016 brief). The two numbers, 70% and 52%, measure different definitions and should not be treated as interchangeable.

On duration, the 2019 brief reported an average duration of severe need of 2.2 years, with 40% experiencing severe needs for two years or less and 38% experiencing needs lasting more than four years; 6% experience needs lasting more than 10 years. Average paid care duration was 1.2 years (Source: HHS/ASPE 2019 brief). The 2015/2016 brief reported an average LTSS need of 2.0 years across the entire population and 3.9 years among those who develop disability, with 1 in 7 (about 14%) experiencing disability lasting more than five years (Source: HHS/ASPE 2015/2016 brief). The consistent pattern across sources is short-to-moderate duration for most people, with a meaningful long-duration tail.

Gender differences are consistent across sources. In the 2019 brief, 75% of women versus 64% of men develop severe LTSS needs, and 34% of women versus 20% of men receive long-term nursing home care (Source: HHS/ASPE 2019 brief). In the 2015/2016 brief, women averaged 2.5 years of LTSS need versus 1.5 years for men (Source: HHS/ASPE 2015/2016 brief).

The 2021 ASPE issue brief, using DYNASIM4 for the cohort born 1941 to 1974, added an income dimension: over half of older adults develop serious LTSS needs after age 65, ranging from 65% in the bottom earnings quintile to 55% in the top quintile. Five or more years of serious needs ranged from 31% (bottom) to 20% (top), and 37% receive nursing home care at some point after 65, with 9% for two or more years (Source: HHS/ASPE 2021 brief).

The 2015/2016 brief also published cost and financing estimates for the cohort turning 65 in that period: average lifetime LTSS cost of $138,000 across all adults and $266,000 among paid users, average out-of-pocket cost of $72,200, and about 1 in 6 (roughly 17%) projected to spend at least $100,000 out-of-pocket. Financing shares in that brief were Medicaid 34.3%, out-of-pocket 52.3%, and Medicare 9.9% (Source: HHS/ASPE 2015/2016 brief). These dollar figures reflect the 2015 base cohort and predate later policy changes, so they should be read as dated context rather than current-year estimates.

Frequently asked questions

What was the median cost of a private nursing home room in the 2025 survey?

The 2025 CareScout Cost of Care Survey reported a US national median of $129,575 per year for a private room, based on a rate of $355 per day (Source: CareScout 2025 Cost of Care Survey).

What was the median cost of a semi-private nursing home room?

The 2025 national median for a semi-private room was $114,975 per year, based on $315 per day (Source: CareScout 2025 Cost of Care Survey).

How much does assisted living cost according to the latest survey?

The 2025 national median for an assisted living community was $74,400 per year, based on $6,200 per month, up 5% year over year (Source: CareScout 2025 Cost of Care Survey).

What does non-medical in-home care cost?

The 2025 national median for non-medical in-home care was $80,080 per year, based on $35 per hour for 44 hours per week over 52 weeks, up 3% year over year (Source: CareScout 2025 Cost of Care Survey).

What is the cost of adult day health care?

The 2025 national median for adult day health care was $24,700 per year, based on $95 per day. The survey reported a negative 5% year-over-year change, though the 2025 basis differs from the 2024 basis of $26,000 (Source: CareScout 2025 Cost of Care Survey).

What is Private Duty Nursing in the 2025 survey?

Private Duty Nursing is a new category introduced in the 2025 survey, reported at $90 per hour and $160 per visit. No standardized annual median was published for it (Source: CareScout 2025 Cost of Care Survey).

Why can I not compare 2025 in-home care to 2024 directly?

The 2025 survey merged the former Home Health Aide and Homemaker Services categories into a single Non-Medical In-Home Care line, so no single 2024 category maps cleanly to it. The 2025 figure of $80,080 is closest in basis to the 2024 Home Health Aide line of $77,792 (Source: CareScout 2025 and 2024 Cost of Care Surveys).

Does Medicare pay for long-term care?

Medicare does not cover custodial long-term care when that is the only care a person needs, and most nursing home care is custodial care (Source: Medicare.gov, Long-Term Care Coverage page, 2026).

What skilled nursing care does Medicare cover?

Medicare Part A covers skilled nursing facility care on a limited, short-term basis when medically necessary and after a qualifying prior inpatient hospital stay under the three-day rule (Source: Medicare.gov, Skilled Nursing Facility Care).

What is the 2026 Medicare SNF coinsurance?

For 2026, days 1 to 20 carry $0 coinsurance, days 21 to 100 carry $217.00 per day, and from day 101 the beneficiary pays 100% (Source: CMS 2026 Medicare Parts A and B fact sheet).

How did the SNF coinsurance change from 2025?

The days 21 to 100 coinsurance rose from $209.50 per day in 2025 to $217.00 per day in 2026 (Source: CMS).

Who is the primary payer for long-term care in the US?

Medicaid financed 61% of total US long-term services and supports spending in 2022, making it the primary payer for long-term care (Source: KFF).

How much did the US spend on long-term services and supports in 2022?

The US spent over $400 billion on LTSS in 2022: $284 billion on home and community-based services and $131 billion on institutional care (Source: KFF).

What are the 2026 age-based premium deduction limits for LTC insurance?

For 2026, the per-insured caps are $500 (age 40 or less), $930 (41 to 50), $1,860 (51 to 60), $4,960 (61 to 70), and $6,200 (over 70), under IRC 213(d)(10) (Source: IRS Rev. Proc. 2025-32, sec. 4.27).

How did the premium caps change from 2025?

The 2025 caps were $480, $900, $1,800, $4,810, and $6,020 respectively, so each rose modestly for 2026, for example from $6,020 to $6,200 for the over-70 tier (Source: IRS Rev. Proc. 2024-40 and 2025-32).

Are LTC insurance premiums fully deductible?

No. Qualified premiums up to the age-based cap count as an itemized medical expense on Schedule A and are deductible only to the extent total unreimbursed medical expenses exceed 7.5% of adjusted gross income (Source: IRC 213(a); IRS Rev. Proc. 2025-32).

What is the 2026 tax-free per-diem benefit limit?

For calendar year 2026, the per-diem limitation under IRC 7702B(d)(4) is $430 per day, up from $420 in 2025 (Source: IRS Rev. Proc. 2025-32, sec. 4.62).

Does the $430 per day cap my tax-free benefits?

Not necessarily. Benefits are excludable up to the greater of $430 per day or actual qualified LTC costs incurred (net of other reimbursements). If actual costs exceed $430 per day, the full actual amount can still be received tax-free (Source: 26 U.S.C. 7702B(d); IRS Rev. Proc. 2025-32).

Is there an official monthly per-diem figure?

No. The statute and Revenue Procedure state the limit only as $430 per day. Monthly figures such as $12,900 or $13,079 are arithmetic derivations from secondary sources, not official IRS amounts (Source: IRS Rev. Proc. 2025-32; secondary industry derivations).

How likely is a 65-year-old to need long-term care?

Estimates depend on definition: 70% of adults surviving to 65 develop severe LTSS needs before death per the ASPE 2019 brief, while about 52% will develop a disability serious enough to require LTSS per the ASPE 2015/2016 brief (Sources: HHS/ASPE 2019 and 2015/2016 briefs).

How long does the typical person need care?

Average duration of severe need was 2.2 years in the ASPE 2019 brief, with 6% exceeding 10 years; the 2015/2016 brief reported 3.9 years among those who develop disability, with about 1 in 7 exceeding five years (Sources: HHS/ASPE 2019 and 2015/2016 briefs).

Do women and men face different long-term care risk?

Yes. In the ASPE 2019 brief, 75% of women versus 64% of men develop severe LTSS needs, and women averaged 2.5 years of need versus 1.5 years for men in the 2015/2016 brief (Sources: HHS/ASPE 2019 and 2015/2016 briefs).

How does income relate to long-term care risk?

Serious LTSS needs after 65 ranged from 65% in the bottom earnings quintile to 55% in the top, and five-plus years of serious need ranged from 31% to 20%, per the ASPE 2021 brief (Source: HHS/ASPE 2021 brief).

Sources

CareScout / Genworth 2025 Cost of Care Survey (fielded July to November 2025; released 2026): https://investor.genworth.com/news-events/press-releases/detail/1054/carescout-releases-2025-cost-of-care-survey-results ; https://www.carescout.com/cost-of-care ; https://assets.carescout.com/x/e3933bfcf1/131168.pdf .
Genworth / CareScout 2024 Cost of Care Survey (fielded July to December 2024; released March 2025): https://investor.genworth.com/news-events/press-releases/detail/982/genworth-and-carescout-release-cost-of-care-survey-results ; https://assets.carescout.com/55da049c1f/282102.pdf .
Medicare.gov, Long-Term Care Coverage: https://www.medicare.gov/coverage/long-term-care ; Skilled Nursing Facility Care: https://www.medicare.gov/coverage/skilled-nursing-facility-care .
CMS, 2026 Medicare Parts A and B Premiums and Deductibles fact sheet: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles ; CMS MM14279 CY2026 update: https://www.cms.gov/files/document/mm14279-medicare-deductible-coinsurance-premium-rates-cy-2026-update.pdf .
KFF, 10 Things About Long-Term Services and Supports (LTSS): https://www.kff.org/medicaid/issue-brief/10-things-about-long-term-services-and-supports-ltss/ .
IRS Rev. Proc. 2025-32: https://www.irs.gov/pub/irs-drop/rp-25-32.pdf ; IRS Rev. Proc. 2024-40: https://www.irs.gov/pub/irs-drop/rp-24-40.pdf ; 26 U.S.C. 7702B, Cornell LII: https://www.law.cornell.edu/uscode/text/26/7702B .
HHS/ASPE, What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports? (2019): https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0 ; Long-Term Services and Supports for Older Americans: Risks and Financing (2015, revised 2016): https://aspe.hhs.gov/reports/long-term-services-supports-older-americans-risks-financing-research-brief-0 ; Most Older Adults Are Likely to Need and Use Long-Term Services and Supports (2021): https://aspe.hhs.gov/reports/most-older-adults-are-likely-need-use-long-term-services-supports-issue-brief-0 .

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