Washington, D.C. — A nursing home stay does not just cost money. For most American families, it costs everything they have spent a lifetime building.
That is the central finding of a new brief from the Roosevelt Institute, released Thursday, which examines how long-term care costs are quietly dismantling middle-class wealth — and passing the damage down to the next generation.
The numbers are stark. Nursing home care now runs between $115,000 and $129,000 per year nationally. The median household income for Americans 65 and older is roughly $57,000. The math does not work — and most families are not prepared for it.
The Middle Class Gets Hit Hardest
The brief, authored by Roosevelt Institute economist Jessica Forden, draws on three decades of data from the Health and Retirement Study to track what actually happens to household wealth when long-term care needs kick in.
The findings are grim. Middle-class individuals who need long-term care see their net wealth fall to just 42% of its original level — and it stays there. The wealthy recover. The middle class does not.
Even upper-middle-class couples with lifetime earnings above $4.75 million are not safe. Nearly half of them will spend down their assets and eventually enroll in Medicaid if they need nursing home care for five years or more.
That is not a fringe scenario. More than half of Americans who turned 65 between 2022 and 2025 will develop a need for long-term services and supports. One in five will need care for more than five years.
And yet 62% of Americans mistakenly believe Medicare will cover nursing home costs if they need to move into a facility. It will not. Medicare covers short-term skilled care only. Long-term custodial care is on the family — until the family runs out of money and qualifies for Medicaid.
The Wealth Gap Widens With Every Admission
The report connects long-term care costs directly to the broader conversation about intergenerational wealth inequality. When a middle-class family spends down to pay for a parent’s nursing home stay, they are not just losing savings — they are losing the inheritance that was supposed to help the next generation buy a home, start a business, or weather their own financial emergencies.
Unpaid family caregivers absorb another layer of the damage. The brief estimates they provided $600 billion in economic value in 2021 alone — often at the cost of their own career advancement and retirement savings. The financial hit does not stop when the caregiving does.
This dynamic plays out differently depending on where a family sits on the wealth spectrum. The top quartile of earners eventually recovers 94% of their assets after a long-term care event. For everyone else, the losses are permanent.
The report is a timely reminder that the rising cost of nursing home care is not just a policy problem — it is a wealth problem, and it is getting worse as the population ages and demand for care outpaces the supply of workers willing to provide it.
A System That Penalizes Aging
The brief does not mince words about how the current system works. It describes the U.S. long-term care model as one that effectively penalizes aging — providing public support only after families have nearly exhausted their savings, while allowing profit-driven companies and private equity firms to capture the rising costs along the way.
For nursing home operators, the report underscores a tension that has been building for years: the people who need care most are increasingly the ones who can least afford to pay for it privately, and the Medicaid reimbursement rates that fill the gap have never kept pace with actual costs.
The Roosevelt Institute is calling for a more comprehensive public long-term care system — one that does not require families to go broke before they can get help. Whether Congress is listening is another question entirely.
