WASHINGTON — Nursing home and long-term care costs in the United States are rising faster than many older Americans’ incomes, according to reports released in 2026 that draw on Medicare and federal health data, adding to concerns about affordability for aging households.
A report published by the AARP Public Policy Institute in March found that nursing home costs increased by about 25% between 2019 and 2024, while household income for Americans aged 65 and older rose by roughly 22% over the same period. The report said increases in home care and assisted living expenses were even steeper, placing additional financial pressure on families seeking long-term care.
The findings coincide with Medicare payment updates for skilled nursing facilities. The U.S. Centers for Medicare & Medicaid Services (CMS) said Medicare payments to skilled nursing facilities are scheduled to increase in fiscal year 2026 under updated reimbursement rates. CMS estimated the changes would raise aggregate payments to facilities by more than $1 billion compared with the previous year.
Industry groups said higher reimbursement rates are needed as providers continue to face rising labor, supply and operating costs. “As costs for goods, services, and labor continue to rise, skilled nursing providers rely on updates such as these to maintain critical services,” American Health Care Association President and Chief Executive Clif Porter said in a statement responding to the CMS payment rule.
Healthcare organizations, however, have argued that Medicare payment increases have not fully kept pace with inflationary pressures. In comments submitted to federal regulators this month, the American Hospital Association said providers continue to face sustained increases in labor, drug and supply expenses and urged policymakers to review reimbursement formulas.
Separate research released this year also pointed to continued increases in home-care expenses. An AARP analysis published in June found that home-care prices rose nearly 8% between May 2025 and May 2026, outpacing overall inflation. The organization said many older adults must pay for long-term care out of pocket because Medicare generally does not cover extended custodial care.
Long-term care costs vary widely by location and level of care, according to industry surveys and senior-care researchers. Several reports published in 2026 showed nursing home costs continuing to rise across most states, although methodologies and estimates differed.
As of June 2026, federal health officials had not announced additional changes to Medicare’s long-term care coverage. Policymakers, provider groups and advocacy organizations continue to debate how to address rising costs and access to care for an aging population.
