Your parents’ long-term care could cost $10,000 a month, so who’s really going to pay?

There are many reasons why people do not place their parents in a nursing home as their care needs increase. They may want to help their parents maintain their independence, for example, or protect them from elder abuse in certain facilities. But cost is increasingly becoming part of the equation.

According to the American Council on Aging, the average annual cost of a nursing home in the United States varies widely from state to state, but on average it could reach about $10,000 per month in most markets in 2024. In some high-cost markets, the cost reaches more than three times that number.

The sticker trauma of long-term care

American Council on Aging statistics show that the average annual cost of a nursing home stay in 2024 ranges from $111,325 ($9,150 per month*) for a shared room to $127,750 ($10,500 per month*) for a private room.

The state with the highest average nursing home cost nationwide, Alaska, has rates as high as $364,453 per year, or $998.50 per day. This is regardless of whether the room is private or not. That’s $29,955 per month.*

Meanwhile, in Texas, the state with the lowest average costs nationwide, you can expect to pay an average of $85,045 per year for a private room ($6,990 per month*) and $65,700 for a shared room ($5,400 per month*). This price is by no means cheap, but it’s certainly less than you can expect to pay in other states. Furthermore, these costs often have to be paid out of pocket.

^{*Monthly amounts are calculated using the respective daily rates and a 30-day month.}

Why your parents’ insurance won’t pay

You might think that Medicare, the U.S. federal health insurance program for people ages 65 and older, would pay for your parents’ home care. But this is not the case.

Medicare will pay 100% of the bill for only the first 20 days that a person is in a nursing home for a medically necessary reason, after a qualifying hospital stay. After that, it pays a portion of the costs until day 100, at which point patients will receive $209.50 per day (as of 2025 figures). After day 100, the patient must cover all costs himself.

“Medicare is designed for short-term rehabilitation services, not long-term care,” said Jeremy Gurewitz, co-founder and patient advocate at Solace Health, a health organization that advocates for patients.

Family financial calculation: When adult children become the safety net

“The rising cost of nursing homes leaves adult children suddenly facing a gap they never budgeted for, scrambling to coordinate resources while balancing their mortgages, children’s education, and retirement planning,” Gurewitz said.

Even if you choose not to place your parents in an expensive nursing home, you may still face unaffordable costs and severe financial setbacks.

According to AARP, one in five adults in the United States, or about 53 million individuals, care for an elderly family member. For them, the average annual out-of-pocket expense for caregiving activities is $7,200. This does not include the value of all unpaid hours worked.

“Long-term care expenses are quietly turning into a financial crisis for countless families,” Gurewitz said.

Smart money movements before the crisis

So, what options do your elderly parents have? Gurewitz encourages his clients to consider things like long-term care insurance or health savings accounts.

In addition, children can look into whether their parents can enroll in Medicaid, the federal and state health insurance program for the poor. According to KFF, a nonprofit health care research organization, Medicaid paid the full costs of home care for more than 60% of the 1.2 million Americans living in these facilities in July 2024.

Medicaid has asset and income limits and a five-year look-back period. So those who want to use it for long-term care should plan ahead. The applicant must disclose all financial transactions that he or his spouse has made over the past five years – including gifts, transfers of property, and sales of assets.

For a parent to qualify for Medicaid, you may need to take ownership of most of their assets years ahead of time so that your parent can meet the Medicaid asset limit. This means that for five years after these transfers are made, your parent will not be eligible for Medicaid.

Perhaps the most important step a family can take is to talk about these costs as soon as possible after realizing the upcoming need for care services.

“Preparing early can help avoid financial and emotional stress in the future,” Gurewitz said. “Discuss expectations and care preferences long before your parents’ health declines. Whether it’s home health aides, assisted living, nursing care, or another option, having a plan protects both the older generation and adult children from the financial shocks that can suddenly turn a paid-for home into a source of delinquent property taxes and maintenance costs.

Bottom line

Average nursing home costs in the United States are high compared to many other developed countries and are a burden on American families. However, there are many steps that parents and their adult children can take to ensure that they do not face a devastating financial crisis. These include looking into long-term care insurance, setting up trusts and transferring assets early in order to qualify for Medicaid, and opening health savings accounts.