United States Long Term Care Market Overview, 2031

Key Insights

• The United States long-term care market is the largest national LTC market globally. Public sources paid for the majority of LTSS spending, accounting for 69.4% of total LTSS expenditures in 2023. Medicaid and Medicare are the first- and second-largest public payers, respectively, accounting for a combined 63.6% of all LTSS spending nationwide in 2023.
• The U.S. population aged 65 and older continues to increase in size, with individuals living longer post-retirement, driving sustained demand for LTSS. The probability of needing LTSS increases with age, and as the older population grows, the demand for long-term care services is expected to increase.
• The nursing facility sector comprises approximately 14,742 federally certified nursing facilities serving about 1.24 million residents as of July 2025. Nursing facility residents receive, on average, about 3.85 hours of nursing care per day from licensed practical nurses, registered nurses, and nurse aides.
• Assisted living communities make up the majority of long-term care residential settings in the country, comprising 66% of such settings compared to 34% for skilled nursing facilities. Forty-four states' Medicaid programs covered assisted living services for older adults and people with disabilities as of March 2025.
• Medicare hospice utilization continues to grow, with more than 1.7 million Medicare beneficiaries receiving hospice care in 2023. The market is supported by the continued expansion of home- and community-based services across the country.

Market Outlook

• According to the Bonafide research report, "USA Long Term Care Market Outlook, 2031," published by Bonafide Research, the U.S. Long Term Care Market is anticipated to add to more than 598 Billion by 2031. This growth is supported by demographic tailwinds, persistent workforce shortages, and the continued expansion of home- and community-based services across the country.
• The U.S. market is expected to benefit from sustained growth in the population aged 65 and older. The number of older adults continues to increase, and the probability of needing LTSS rises with age. As individuals live longer post-retirement, the demand for long-term care services is projected to increase. Advancements in medical and supportive care may allow younger persons with disabilities to live longer, further expanding the LTSS-eligible population.
• Medicare hospice utilization continues to demonstrate strong growth. In 2023, more than 1.7 million Medicare beneficiaries received hospice care, with Medicare hospice spending totaling $25.7 billion. The Medicare Hospice Utilization by State reports provide state-level data on how Medicare beneficiaries use hospice services and the associated spending, allowing comparisons across states to identify geographic variation in hospice utilization, intensity of care, and costs.
• The assisted living sector is expected to continue its growth trajectory, driven by favorable demographics, the growing adoption of value-based care models, and increasing investor interest in third-party service providers. Federal Medicaid and Medicare spending for services provided in assisted living facilities totaled at least $12 billion in 2024.
• The shift toward home- and community-based services continues to reshape the U.S. LTC delivery system. NHEA data for LTSS expenditures include payments for services provided in an individual's own home, such as personal care and homemaker/chore services, as well as a wide range of other community-based services including adult day health care. However, NHEA data underestimate the total costs of providing LTSS because they do not reflect care provided by family members, friends, and other uncompensated caregivers.

Market Dynamics

Driver: Aging Population and Increasing Life Expectancy The United States is experiencing a historic demographic shift, with the population aged 65 and older growing at an unprecedented rate. The probability of needing LTSS increases with age, and as the U.S. population aged 65 and older continues to increase in size, and individuals continue to live longer post-retirement, the demand for LTSS is expected to increase. Advancements in medical and supportive care may allow younger persons with disabilities to live longer, further expanding the LTSS-eligible population. This demographic transformation is not a temporary phenomenon but a structural shift that will continue to drive LTC demand for decades. The aging of the baby boom generation, increasing life expectancy, and declining fertility rates create sustained pressure on the U.S. LTC delivery system and financing mechanisms. Long-term services and supports encompass a wide range of health and social services, as well as other types of assistance including medical devices and technology, that are needed by individuals over an extended period of time.



Challenge: Workforce Shortages and Direct Care Worker Crisis The U.S. long-term care market faces a persistent and intensifying workforce crisis. Nursing facilities provide medical and personal care services for older adults and people with disabilities, but they face chronic shortages of qualified staff. The direct care workforce faces persistent shortages, high turnover, and low wages that threaten its stability. Almost 9 in 10 direct care workers are women, and 61 percent are people of color. The poor quality of these jobs contribute to high turnover, low job satisfaction, and workforce shortages. For over two decades, the United States has had a long-standing shortage of direct care workers, harming care access and quality for those with long-term care needs. Low wages and high turnover have long contributed to staffing shortages in the direct care workforce, which provides crucial support to older Americans, people with disabilities, and other Americans with chronic conditions. The workforce shortage is particularly acute in rural areas, where recruitment and retention are most challenging. Without significant investment in workforce recruitment, training, compensation, and career development, the U.S. LTC system will face increasing difficulty in meeting growing demand for care, potentially leading to access constraints and service disruptions.

Trend: Shift Toward Home- and Community-Based Services A fundamental shift in long-term care delivery is occurring in the United States, with services increasingly being delivered in home- and community-based settings rather than institutional facilities. LTSS spending includes payments for services provided in an individual's own home, such as personal care and homemaker/chore services, as well as a wide range of other community-based services, such as adult day health care services. This trend is driven by multiple factors, including beneficiary preference for aging in place, state Medicaid program policies, federal incentives, and advances in home care technology and telehealth. Assisted living communities make up the majority of long-term care residential settings in the country (66%), compared with skilled nursing facilities (34%). The assisted living sector is evolving beyond traditional hospitality and real estate models, with operators exploring risk-based care models and value-based care arrangements. Assisted living communities are serving a growing number of residents who have chronic conditions, and third-party service providers are bringing expertise in documentation, coding, and care coordination, enabling assisted living communities to broaden their service lines.

Policies

• The Centers for Medicare & Medicaid Services administers the Medicaid program, which is the single largest payer for long-term services and supports in the United States. Public sources paid for the majority of LTSS spending, accounting for 69.4% of total LTSS expenditures in 2023. Medicaid and Medicare are, respectively, the first- and second-largest public payers, accounting for a combined 63.6% of all LTSS spending nationwide in 2023.
• The 2025 reconciliation law is estimated to reduce federal Medicaid spending substantially over a decade and may have broad implications for home care, including for the workforce. Over half of Medicaid spending finances care for people ages 65 and older and those with disabilities.
• State Medicaid programs administer home- and community-based services through waivers and state plan amendments. Forty-four states' Medicaid programs covered assisted living services for older adults and people with disabilities as of March 2025, with more than half of states covering these services under Medicaid HCBS waivers.
• Long-term services and supports are financed by a variety of public and private sources. Among the various public sources of LTSS financing, none are designed to cover the full range of services and supports that may be desired by individuals with long-term care needs.
• The RAISE Family Caregivers Act and state-level caregiver support programs recognize the central role of unpaid family caregivers in the U.S. LTC system. NHEA data underestimate the total costs of providing LTSS because they do not reflect care provided by family members, friends, and other uncompensated caregivers.

Segment Analysis

United States Long-Term Care Market By Service Type • Home Healthcare: Home healthcare represents the fastest-growing service segment in the U.S. LTC market. NHEA data for LTSS expenditures include payments for services provided in an individual's own home, such as personal care and homemaker/chore services, as well as a wide range of other community-based services. Home healthcare includes skilled nursing, home health aide services, therapy services, and personal care delivered in the patient's home. The segment is driven by beneficiary preference for aging in place and state Medicaid programs expanding HCBS coverage. The growth of Medicare Advantage plans and Medicaid managed care has increased care coordination and home health utilization. Home health fee-for-service utilization varies significantly across states, highlighting persistent disparities in discharge practices and access to post-acute care.
• Nursing Care / Skilled Nursing Facilities: The nursing facility sector comprises approximately 14,742 federally certified nursing facilities serving about 1.24 million residents as of July 2025. Nursing facilities provide medical and personal care services for older adults and people with disabilities. Nursing facility residents receive, on average, about 3.85 hours of nursing care per day from licensed practical nurses, registered nurses, and nurse aides. The sector has experienced consolidation, with the total number of nursing homes declining from previous years. Approximately one in five nursing home residents lives in a rural facility. The segment represents the largest service type in the U.S. LTC market.
• Assisted Living Facilities: Assisted living communities make up the majority of long-term care residential settings in the country (66%), compared with skilled nursing facilities (34%). The number of assisted living communities nationwide has grown to more than 32,000, serving more than 1 million residents. The majority of the assisted living market is comprised of for-profit entities. While most assisted living facility residents pay for their care using their own personal resources, federal programs including Medicaid cover certain services provided in assisted living facilities for those eligible. Federal Medicaid and Medicare spending for services provided in assisted living facilities totaled at least $12 billion in 2024.
• Hospice and Palliative Care: Medicare hospice utilization continues to grow, with more than 1.7 million Medicare beneficiaries receiving hospice care in 2023, and Medicare hospice spending totaling $25.7 billion. Hospice services are comprehensive and holistic, focusing on comfort and palliative care at the end of life. Services include physician oversight, nursing care, medical equipment and supplies, drugs to manage pain and symptoms, medical social services, counseling and other services, as needed. The Medicare Hospice Utilization by State reports provide state-level data on how Medicare beneficiaries use hospice services and the associated spending, allowing comparisons across states to identify geographic variation in hospice utilization, intensity of care, and costs.
• Other Services: This segment includes memory care facilities, adult day care, long-term rehabilitation services, and continuing care retirement communities. The need for LTSS affects persons of all ages and is generally measured by limitations in an individual's ability to perform daily personal care activities such as eating, bathing, or dressing. LTSS spending also includes payments for services provided in an individual's own home, as well as a wide range of other community-based services. Memory care facilities represent a growing subsector within this segment, driven by the increasing prevalence of Alzheimer's disease and other dementias.

United States Long-Term Care Market By Payer Type • Public: Public sources paid for the majority of LTSS spending, accounting for 69.4% of total LTSS expenditures in 2023. Medicaid and Medicare are, respectively, the first- and second-largest public payers, accounting for a combined 63.6% of all LTSS spending nationwide in 2023. LTSS spending for other public programs, including the Veterans Health Administration and the Children's Health Insurance Program, accounted for an additional 5.8% in 2023. Public payers represent both the largest and fastest-growing segment, reflecting the significant role of government programs in supporting the LTC safety net.
• Private: Private sources account for a significant portion of LTSS spending. Among the various public sources of LTSS financing, none are designed to cover the full range of services and supports that may be desired by individuals with long-term care needs. The assisted living market is predominantly private-pay, with the majority of the market comprised of for-profit entities. While most assisted living facility residents pay for their care using their own personal resources, federal programs including Medicaid cover certain services provided in assisted living facilities for those eligible.
• Out-of-Pocket: Out-of-pocket payments represent a substantial component of LTC spending. NHEA data for LTSS expenditures include payments made for services in nursing facilities and residential care facilities, but they do not reflect care provided by family members, friends, and other uncompensated caregivers, which represents a significant economic contribution. Private pay nursing home care is not affordable for middle-income families anywhere. The assisted living market is predominantly private-pay, meaning the vast majority of assisted living residents pay out-of-pocket or through private insurance.

United States Long-Term Care Market By Gender • Female residents account for the largest share of U.S. LTSS spending, driven by higher life expectancy and higher rates of disability in advanced age. Women are more likely to reach advanced ages where LTSS utilization is highest. The probability of needing LTSS increases with age, and women, on average, live longer than men. Women also are more likely to live alone in old age, increasing their reliance on formal paid care services rather than informal family caregiving. Almost 9 in 10 direct care workers are women, and 61 percent are people of color, with women of color growing as a share of the workforce across every long-term care setting. Female representation is particularly pronounced in the 85+ age group, which has the highest per capita LTC utilization.
• Male residents account for a smaller but faster-growing share of U.S. LTSS spending. The need for LTSS affects persons of all ages and is generally measured by limitations in an individual's ability to perform daily personal care activities such as eating, bathing, or dressing. Men are more likely to need LTSS at younger ages due to disabilities and chronic conditions. As male life expectancy increases, the representation of men in the 85+ cohort is slowly growing, which may gradually increase the male share of LTSS spending. The gender gap is gradually narrowing as male life expectancy increases.

United States Long-Term Care Market Economics

• The cost of long-term care services varies significantly by service type, geographic location, and payer source. Nursing facility residents receive, on average, about 3.85 hours of nursing care per day from licensed practical nurses, registered nurses, and nurse aides. Activities of daily living are the most important predictor of the cost of nursing home care, explaining 30 percent of variance in nursing costs among nursing home residents.
• Staffing costs represent the largest operating expense for all LTC providers, typically accounting for 60–80% of total operating costs. The direct care workforce faces persistent recruitment and retention challenges. Low wages and high turnover have long contributed to staffing shortages in the direct care workforce. However, workforce shortages and high turnover rates create significant operational challenges.
• Public payers, particularly Medicaid, reimburse services at rates below the cost of care in many states. The 2025 reconciliation law is expected to reduce federal spending substantially over a decade, roughly a 14% reduction in federal funding for the Medicaid program. Over one-third of Medicaid spending pays for long-term care, with most of the spending paying for home care.
• Out-of-pocket costs represent a substantial burden on households. Private pay nursing home care is not affordable for middle-income families anywhere. The assisted living market is predominantly private-pay. The vast majority of assisted living residents pay out-of-pocket or through private insurance.
• The economic value of home and community-based services relative to institutional care is a key policy consideration. LTSS spending includes payments for services provided in an individual's own home, such as personal care and homemaker/chore services, as well as a wide range of other community-based services, such as adult day health care services. However, NHEA data underestimate the total costs of providing LTSS because they do not reflect care provided by family members, friends, and other uncompensated caregivers.


Considered in this report
• Historic Year: 2020
• Base year: 2025
• Estimated year: 2026
• Forecast year: 2031

Aspects covered in this report
• Long-term care Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Service Type
• Home Healthcare
• Nursing Care / Skilled Nursing Facilities: 
• Assisted Living Facilities
• Hospice & Palliative Care:
• Other Services

By Payer Type
• Public
• Private
• Out-of-Pocket

By Gender
• Male
• Female