A Year of Nursing Home Care Now Costs $129,575. Most People Have No Plan to Pay for It.

Short answer: A year in a private nursing home room now costs $129,575 on average nationally, and the average long-term-care need lasts years, not weeks. Most people never budget for this because they assume it won't happen to them — but roughly 1 in 4 of today's 20-year-olds will become disabled before retirement, and someone turning 65 today has close to a 70% chance of needing some form of long-term care. Washington State was the first to respond with a mandatory payroll tax to fund a backstop benefit — and it isn't the last: at least eight other states have introduced or studied similar legislation since. That benefit, capped at $36,500, would cover less than four months of the nursing home costs above. The lesson isn't really about Washington. It's that the gap between what long-term care costs and what most households have set aside for it is large enough that states are starting to legislate around it, and closing that gap for yourself takes an actual plan, not an assumption that either you or your state will be fine.

It probably will happen to you

The instinct to assume a serious illness or disability is something that happens to other people is understandable, and wrong often enough to be worth correcting with real numbers. The Social Security Administration's own actuaries project that a worker turning 20 in 2024 has a 23% chance of becoming disabled before reaching retirement age — just under 1 in 4. ^[1] That figure comes from Social Security's own disability projections, not a marketing statistic, and it applies about equally to men and women.

Long-term care usually isn't sudden

When people picture what causes a long absence from work or a need for full-time care, they tend to picture an accident. The data says otherwise. The Council for Disability Income Awareness's claims review finds musculoskeletal and connective-tissue disorders account for roughly a quarter of long-term disability claims on their own, with cancer and cardiovascular disease among the next most common causes — ordinary illness, not sudden trauma. ^[2] And once a long-term disability claim starts, it doesn't resolve quickly: the average paid claim lasts 31.2 months, or about 2.6 years. ^[2]

What long-term care actually costs in 2025

Separately from disability income, there's the cost of the care itself as people age. According to CareScout's 2025 Cost of Care Survey — the industry's benchmark annual pricing study — a private nursing home room now costs $129,575 a year nationally ($355/day), up 1% from 2024, and a semi-private room runs $114,975 a year ($315/day), up 2%. Assisted living costs $74,400 a year ($6,200/month), up 5% — the fastest-rising category this year. In-home non-medical caregiving runs about $35 an hour, or roughly $80,000 a year at 44 hours a week. ^[4]

These are national medians — costs run higher in many metro areas — and every category rose again this year, which has been the pattern for over a decade. The need itself isn't rare, either: the federal Administration for Community Living puts the lifetime odds of needing long-term care at almost 70% for someone turning 65 today, and notes that women need care for 3.7 years on average, versus 2.2 years for men. ^[3]

Washington's answer: a mandatory payroll tax

Washington State looked at this gap — too few residents carrying private protection, and a state Medicaid program exposed to the cost when care was needed anyway — and didn't leave it to chance. Since July 2023, most Washington workers have had 0.58% of every paycheck withheld to fund the WA Cares Fund, a state long-term-care benefit, with no cap on the wages it applies to. ^[5]

To qualify for the full benefit, a worker needs to have contributed for at least 10 years total, or for 3 of the last 6 years at the time they apply. Benefits became payable starting July 2026, and the fund pays approved providers directly for things like in-home care, home modifications, adult day services, and facility-based care — up to a maximum lifetime benefit of $36,500, which grows with inflation each year. ^[5] The one broad way to avoid the tax — buying private long-term care insurance and applying for an exemption — was only ever open from October 2021 through December 2022, and that window is now permanently closed to new applicants. A handful of narrower exemptions (active-duty military, certain visa holders, out-of-state residents) took effect in 2026, but there is no general opt-out anymore. ^[6]

Why the state benefit isn't a solution

Run the numbers together and the gap is stark. WA Cares' maximum lifetime payout, $36,500, would cover roughly three and a half months of the private-room nursing home rate CareScout measured this year — and that's the maximum, only reachable after a decade of contributions. It's real help, and it's explicitly designed as a bridge rather than full coverage: the program's own materials describe it as something that "provides immediate relief and planning time" for some people, not a full solution for everyone. ^[5] Washington built it because the alternative — no program at all — was leaving too many residents to spend down their savings and eventually land on Medicaid. The tax is the state admitting the problem is real and expensive; it isn't the state claiming to have solved it.

This is bigger than Washington

If you don't live in Washington, none of that payroll tax applies to you — but the underlying math does. The cost data above is national. The disability and care-need statistics are national. What Washington's program really demonstrates is what happens when a large population under-prepares for a large, common, expensive risk: eventually someone — the state, a family, or the person who needs care — has to pay for it anyway, usually on worse terms than if it had been planned for in advance. Washington chose to spread that cost across every paycheck.

Washington isn't the only state doing this

Since Washington's law passed in 2019, at least eight or nine other states have introduced similar legislation or formally studied the idea: California, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Jersey, New York, and Vermont have all had some version of it in front of a legislature or a state task force. ^[7] Most use nearly the same structure Washington did — a payroll deduction funding a state benefit, with an exemption for people who already own private long-term care insurance before a cutoff date.

New York is furthest along behind Washington. A bill currently sitting in committee in Albany (S1179 in the Senate, A1499 in the Assembly) would start collecting premiums from workers in 2027 and begin paying benefits in 2030 — and it uses the same exemption mechanism: anyone who already holds private long-term care coverage before the law takes effect is excused from the payroll deduction, but permanently gives up eligibility for the state benefit in exchange. ^[8] Illinois tried something similar in February 2026; the bill died in committee within weeks, a reminder that these proposals face real political resistance and don't always pass. ^[9] But the pressure that keeps producing them — aging populations, state Medicaid budgets already strained by long-term care spending — hasn't gone away, which is why some version of this idea keeps reappearing in a new state almost every legislative session.

The pattern worth noticing if you don't live in Washington or New York: in nearly every state version of this proposal, the way to avoid a future mandatory payroll deduction is the one Washington already used — hold a private long-term care policy before the law's cutoff date. Washington's window closed permanently in December 2022 for anyone who didn't already have coverage in place. A state that hasn't passed a law yet is, by definition, one where that window is still open — which is a meaningfully different position than waiting until after a bill passes to start looking at coverage, since by then the exemption is usually already closing or closed.

What actually protects you

There's no single right answer here, and the honest version of this article won't pretend there is — this is where speaking with a licensed professional about your specific health, age, and budget matters more than a general framework. But the broad categories worth knowing about are: traditional standalone long-term care insurance, which pays a defined benefit for qualifying care but has gotten more expensive and less available as insurers have adjusted pricing over the past two decades; hybrid life-insurance or annuity policies with a long-term-care rider, which combine a death benefit or retirement asset with LTC coverage so the money isn't "wasted" if care is never needed; and self-funding, setting aside a dedicated pool of savings large enough to plausibly cover a multi-year need. The question worth sitting with, whichever direction you lean: if you needed six figures a year for two or more years, where would that money actually come from, and would getting it disrupt anything else you're counting on?

Frequently asked questions

Does WA Cares only matter if I live in Washington? Mechanically, yes — it's a Washington payroll tax and benefit. But the risk it was built to address (a large share of the population reaching retirement without a way to pay for long-term care) exists everywhere, which is why it's worth understanding even outside Washington.

Can I still avoid the WA Cares tax by buying private long-term care insurance? No. That exemption window ran from October 2021 through December 2022 and is now closed to new applicants. A small number of other exemptions (military, certain visa holders, out-of-state residents) took effect in 2026, but there's no general private-insurance opt-out anymore. ^[6]

Is $36,500 really the most WA Cares pays out? Yes — that's the maximum lifetime benefit for a fully vested worker, and it grows with inflation over time, but it's a lifetime cap, not an annual one. ^[5]

What's the difference between long-term care insurance and disability insurance? Disability insurance generally replaces income while you can't work, typically before retirement. Long-term care insurance pays for the cost of care itself — in-home, assisted living, or nursing home — often later in life, and the two are usually separate policies addressing separate risks.

Do other states have a payroll tax like Washington's? Not yet in most places, but it's a live and spreading idea. At least eight or nine states have introduced legislation or formally studied it since 2019, most recently New York (a bill in committee, with premiums proposed to start in 2027) and Illinois (introduced and died in committee in early 2026). Nearly all of these proposals, including Washington's, exempt people who already hold private long-term care coverage before the law takes effect — which functions as the closest thing this topic has to a deadline. ^{[7] [8] [9]}

This article is financial education, not financial advice. It does not account for your personal health, income, or situation, and TopHolding is not your financial adviser. Consider speaking with a qualified, licensed professional before making decisions about long-term care or disability protection.

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