By Thomas A. Parmalee
A new report from the AARP Public Policy Institute finds that long-term services and supports (LTSS) are becoming increasingly unaffordable for middle-income Americans, with home care providers and senior care professionals at the center of a rapidly intensifying cost crisis.
According to the report, the cost of long-term care services — including home care, assisted living, and nursing home care — has risen dramatically in recent years, significantly outpacing income growth. From 2019 to 2024, costs for key services such as home care and assisted living increased by nearly 50%, creating a widening affordability gap for aging Americans.
Home Care at the Epicenter of Cost Pressures
For home care agencies, the findings underscore a critical paradox: demand for in-home services continues to grow, yet affordability constraints are tightening for the very clients who need care most.
The report notes that rising labor costs, inflation, and increased demand for services have driven substantial price increases in home-based care. At the same time, middle-income older adults—those without sufficient assets to self-fund care but ineligible for Medicaid—are being squeezed out of the market.
“Home care and other long-term care services have quickly become increasingly unaffordable in recent years,” an AARP spokesperson stated, emphasizing the speed and severity of the shift.
Middle-Income Seniors Face the Greatest Risk
A key takeaway for providers is the growing vulnerability of middle-income clients. Unlike lower-income individuals who may qualify for Medicaid, or higher-income households with substantial savings, this segment faces limited options as private-pay costs escalate.
Industry data cited alongside the report shows that:
Assisted living now averages more than $70,000 annually, following sharp year-over-year increases.
In-home care and nursing services continue to climb, with lifetime care needs often reaching hundreds of thousands of dollars.
As a result, many older adults are delaying care, relying more heavily on unpaid family caregivers, or spending down assets to qualify for public assistance.
Implications for Home Care Providers
For home care agency owners and operators, the report signals both risk and opportunity:
Shrinking private-pay market: Affordability challenges may reduce the pool of clients able to sustain long-term services.
Increased reliance on family caregivers: Families may supplement or replace paid care, impacting hours and service utilization.
Policy-driven growth potential: Expanded Medicaid waivers, public funding, or new financing models could reshape demand.
Additionally, rising costs are placing increased financial and emotional strain on family caregivers, who already contribute an estimated hundreds of billions of dollars in unpaid care annually.
A Call for Systemic Change
The AARP report concludes that without significant policy intervention, long-term care will remain out of reach for a growing share of the aging population. The organization points to the need for new financing solutions, expanded access to home- and community-based services, and strategies to address workforce shortages driving cost increases.
For home care professionals, the message is clear: affordability is no longer a peripheral issue — it is now a defining factor shaping the future of care delivery.
About the Report
The findings are detailed in AARP’s latest analysis of long-term services and supports affordability, examining national cost trends, income data, and access challenges across care settings.
