LTC Insurance in the Larger Context
The Changing Landscape of Long-Term Care Insurance
Section titled “The Changing Landscape of Long-Term Care Insurance”The long-term care insurance industry has seen shrinking demand over recent decades. Although the population age 65 and older has grown steadily at about 3.5% per year, the share of that population buying new long-term care insurance has dropped. This is partly due to rising premiums and concerns about future premium increases or benefit reductions.
At the same time, long-term care spending — by individuals, families, insurers, and public programs — has been rising faster than general healthcare spending. An international comparison by the OECD shows that across many countries, including the U.S., long-term care costs and demand are growing faster than overall health spending.
This trend reflects deeper changes: an aging population, smaller families with fewer informal caregivers available, and economic pressures such as rising care costs, labor shortages in caregiving, and higher demand for quality services.
The Cost of Long-Term Care
Section titled “The Cost of Long-Term Care”The cost of long-term care can be expensive and varies greatly depending on the type of care you receive, where it is provided, and where you live. For example, the national average cost for a semi-private room in a nursing home is $112,420 per year.
When you think about cost, do not forget to factor in inflation. The cost of care today may be much higher in the future when you need care. If inflation continues to average 2.54% every year, in 20 years the annual cost of care in a nursing home will increase from $112,420 to almost $186,000.
National Average Costs by Type of Care
Section titled “National Average Costs by Type of Care”The following average annual costs for each type of care are based on The FLTCIP 2024 Cost of Care Survey.
| Home Care | Assisted Living | Nursing Home |
|---|---|---|
| $51,480 | $66,132 | $112,420 |
| $33/hour | $5,511/month | $308/day |
| 6 hours/day, 5 days/week | Semi-private room |
Sources
Section titled “Sources”- The Federal Long Term Care Insurance Program, “The FLTCIP 2024 Cost of Care Survey” conducted by Illuminfin, March 2025.
- U.S. Department of Labor, Bureau of Labor Statistics, “Historical Consumer Price Index for All Urban Consumers,” 30-year average from 1993–2024, https://data.bls.gov/timeseries/CUUR0000SA0 (accessed August 2025).
- OECD, Elderly Population Data 1970–2024.