Cost of Long-Term Care in California in 2024

America is older than ever. It’s true: Adults over 65 now outnumber teenagers! And the median age of the U.S. population is the highest it's ever been. People are living longer, and older adults make up a huge portion of the population.

The Golden State of California is leading this age-forward trend, boasting a median age of 39.5 — higher than the U.S. average of 38.2, according to the U.S. Census. With 16.2% of its populace over 65, just a tad above the national 16.1%, California stands on the brink of an era marked by long-term care needs and potential workforce gaps. These shifts could redefine the state's economic and health care landscapes.

As the country’s population ages, this has put an increasing focus on planning for long-term care. As the nation’s most populous state, California is affected by this as much as or more than anywhere else in the country.

If you’re in the state of California and are considering your options for long-term care, or looking on behalf of a loved one, you’ve found the right place. At LTC News, we provide information and resources to help you make the best decisions for you and your loved ones concerning long-term health care.

In this article, we’ll cover:

• The cost of long-term care in California
• Types of care, and how this affects cost
• Payment methods and eligibility for assistance programs
• Programs and legislation specific to the state of California
• Resources and links to additional information

Note: Long-term health care costs vary dramatically in California. The information in this article is intended for a general outlook and considerations related to cost of care. It should not be considered a replacement for speaking with long-term care and financial professionals.

Long-Term Care Eligibility in California

To qualify for Medi-Cal (California’s Medicaid program) long-term care benefits, one must meet the financial eligibility criteria and the functional eligibility criteria.

The financial eligibility criteria vary depending on the type of long-term care program and the marital status of the applicant, but are based loosely on the federally defined triggers that Long-Term Care Insurance requires.

The functional eligibility criteria are based on the level of care that the applicant needs. For nursing home care, the applicant must require a nursing facility level of care (NFLOC), which is defined by each state and may include factors such as activities of daily living (ADLs), instrumental ADLs (IADLs), health, and cognition. For home and community-based services waivers, the applicant must also require a NFLOC or a similar level of care that would otherwise qualify them for institutional care.

Eligibility for Long-Term Care Insurance also relates to ADLs, or activities of daily living, so it’s useful to know what these are. If you need assistance with two or more of these ADLs, and the assistance is expected to last for 90+ days, you can qualify for insurance assistance.

What are activities of daily living?

• Eating: feeding oneself by getting food into the body from a receptacle such as a plate, cup, or table, by a feeding tube, or intravenously.
• Bathing: ability to clean oneself, get in and out of shower or bath, and perform other activities of personal hygiene such as shaving or brushing one’s teeth.
• Dressing: ability to put on clothes, and not struggle significantly with common clothing accessories such as buttons or zippers. This also includes putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs.
• Transferring: ability to walk and get in and out of bed, or chair.
• Continence: ability to control one’s bladder and bowel functions, or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for a catheter or colostomy bag.
• Toileting: ability to use and get on and off the toilet and performing associated personal hygiene.

Not all people have Long-Term Care Insurance. In fact, the majority of Americans don’t. However, the eligibility for it is a common trigger for long-term care assistance.

The federal government also differentiates between ADLs and IADLs, the latter of which stands for instrumental activities of daily living. These include more complicated activities related to community involvement and communicating with those around you.

Regardless, if a licensed clinical expert certifies that you need assistance with two or more ADLs and this assistance is expected to last 90+ days, you qualify as needing long-term care.

Types of Long-Term Care for Seniors

When you think of long-term care, what comes to mind? For a lot of people, it’s nursing homes.

However, most long-term care doesn’t take place in nursing homes. In fact, you may never need to live in a nursing home even if you or a loved one needs frequent long-term care assistance.

Far more care takes place in the home by a personal caregiver, or in other facility types. Below are some of the options available for long-term care:

Adult Day Care

These centers can provide basic health services and an interactive, social environment for seniors, without the permanent resident costs of other facility types.

Home Health Aide

Home health aides assist with the activities of daily living (ADLs) we mentioned earlier. They may provide in-home assistance for eating, bathing, dressing and other ADLs as needed.

Homemaker Services

Also in-home, much like a home health aide, but homemakers have tasks unrelated to ADLs. These could include cleaning, meal preparation, laundry, and other basic household chores or errands that they’re unable to accomplish on their own.

Continuing Care Retirement Communities

These are communities that are comprised of multiple facility types. Residents are able to access the full range of facility services based on their needs, ranging from independent to skilled care.

Memory Care Facilities

Facilities specializing in those with Alzheimer’s, dementia and other cognitive issues. Some of the facility types listed here, such as assisted living centers or nursing homes, can have specialized memory care services.

Rehabilitation Facilities

Centers specializing in the rehabilitation of chronic or long-term conditions.

Independent Living Facilities

These facilities are communities for seniors who do not need assistance with basic tasks of living. There is no explicit care. Sometimes, though, they are nearby assisted living facilities with access to dining and social areas. This varies depending on the community.

Assisted Living Facilities

These centers assist residents with ADLs but allow them to live as independently as possible. The care needs of those in assisted living centers are less acute than nursing homes, though some assisted living facilities can take care of those with mild cognitive decline. They also maintain a fully trained staff, 24/7, with a registered nurse on call. All assisted living facilities must provide three meals a day to residents and provide onsite assistance with medication management.

Nursing Home

Nursing homes offer more skilled medical care for those in greater need of health-related assistance. This is what makes them the most expensive long-term care option listed here. A nursing home must have a trained staff with an onsite RN, or physician on site and awake, on duty 24 hours a day. A nursing home provides skilled, intermediate, and custodial services in addition to medication management and meals. Nursing homes can handle those with more advanced cognitive decline as well.

Care Type and Cost

Below we list median costs for long-term care, but it’s broken out by type of care, since the cost differs significantly between types.

This is why it’s important to differentiate cost based on the type of care you or a loved one will be receiving. The most expensive caregiving types are more than double the cost of the least expensive types. Expecting them all to cost the same amount is a dangerous assumption, and can lead to irresponsible financial decisions.

Payment Methods for Long-Term Care

Just as important as what type of care you need is how you’ll fund the caregiving.

Below we’ve listed some basic payment options. Each should be researched more fully before deciding on a solution.

Out-of-Pocket

Potentially expensive, but technically this is possible. However, this will not be viable for all but the wealthiest Americans, and even then, it will not be advisable for most, relative to other options.

Medicaid Coverage (Medi-Cal)

Medicaid, which in California is known as Medi-Cal, has strict allowances for assets and income. In California, the spend-down amount is $2,000, meaning you need to have nearly no wealth left to you before Medi-Cal will cover your long-term health care costs. For those with assets they’d wish to protect, Long-Term Care Insurance is often the most advisable option for coverage.

As of July 1, 2023, there is no income limit to qualify for Medi-Cal coverage, but nearly all of one's income must be paid towards the cost of nursing home care. A single individual applying for Nursing Home Medi-Cal aid in 2023 in CA must have assets under $137,400.

Long-Term Care Insurance

Long-Term Care Insurance can be a great decision for many. They provide benefits for qualifying individuals

If you already qualify as needing long-term care or are receiving long-term care, you will not be able to qualify for Long-Term Care Insurance. However, this is why the recommended time to apply for this type of insurance is before you need long-term care. Those in their 40s, 50s and 60s can often qualify without issue, though Long-Term Care Insurance isn’t necessarily limited to those in these age brackets.

Standalone Long-Term Care Insurance policies are most common. Long-Term Care Insurance riders are also available on other policies, such as life insurance. Riders are extra benefits available to add to multiple types of insurance policies. Long-term care add-ons can also be added to fixed or indexed annuities.

Research from the National Bureau of Economic Research has shown that children of seniors with Long-Term Care Insurance are less likely to provide informal caregiving or reside with their parents, and are more likely to work full-time. In short, it benefits entire families, not just the policyholder.

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Short-Term Care Insurance

Short-term care insurance policies generally act as cash indemnity plans that cover one year of care or less, though some can extend to approximately two years. The major difference between short-term and Long-Term Care Insurance is how long the benefits will last.

However, California is one of the few states where short-term care insurance is not offered. However, if you move to California and have a policy already, you can still receive benefits.

California Long-Term Care & Financial Programs

Let’s take a quick look at programs and support that either only exist in California, or for which there are special considerations for Californians looking for long-term care financial options.

Federal Partnership Program

The California Partnership for Long-Term Care is an innovative program offered through the collaboration of the State of California Department of Health Care Services in cooperation with several private insurance companies. It was one of the four original partnership states. However, while most have reciprocity with other states' long-term care partnership programs, California does not.

This means if you move to California from another state, while you can receive benefits in California, the State of California will not honor the additional asset protection offered by the original state.

Currently, no insurance company offers a Partnership Long-Term Care Insurance policy due to state requirements that make them cost-prohibitive. However, there is a discussion in California that would make changes to the partnership program to make it much more affordable. Regular Long-Term Care Insurance is still available and provides substantial asset protection and access to quality care options.

For more on this program, check out our California Long-Term Care Resources page.

Medi-Cal Program

Medi-Cal is California’s Medicaid program. It will pay for long-term health care costs if an individual has little or no income and assets.

As stated earlier, the spend-down amount for Medicaid is $2,000. As mentioned above, there is no income limit to qualify for Medi-Cal coverage, but nearly all of one's income must be paid towards the cost of nursing home care. A single individual applying for Nursing Home Medi-Cal aid in 2023 in CA must have assets under $137,400.

Before applying for Medicaid in California, you should confirm the latest rules and restrictions, to understand what it will mean for your existing assets, and those of your spouse.

California Medicaid Estate Recovery Program

When applying for Medicaid, your estate will be subject to the Medicaid Estate Recovery Program, or MERP.

Under this program in California, your assets can be subject to recovery, including your home, other real estate, bank accounts, motor vehicles, cash, and various other financial assets and even household goods.

The state will never require that a living spouse move out of their home, but otherwise these are subject to recovery due to the asset and income limits imposed by Medicaid.

There is also a lookback period of up to 30 months in California, so that income or asset reductions and restructuring during this period may still be subject to the asset recovery standards. This is different than the typical 60-day look-back period of other states.

This 30-month lookback immediately precedes the date a nursing home resident submits a Medi-Cal application or the date a Medi-Cal beneficiary is admitted to a nursing home.

During the look back, Medi-Cal scrutinizes all asset transfers, looking for assets that were gifted. This includes assets that were sold for under fair market value. In 2023, California allows up to $11,576 / day to be gifted without violating the look-back period. This is called “strategic gifting.” 

However, if one gifts more than this daily limit, one will be penalized with a penalty period of Medicaid ineligibility.

Other California Taxes, Incentives, Programs & Financial Vehicles

While we’re unable to cover all of California’s relevant programs, here are a few additional considerations that Californians should be aware of and discuss with a Long-Term Care Insurance specialist or other qualified financial advisor:

• Stability Rules. California has adopted Long-Term Care Insurance rate stability rules, which make it harder for an insurance company to get an approved rate increase.
• Income Tax. California is considering a tax on income for anyone who does not own a qualified Long-Term Care Insurance policy. The State of Washington already has this tax. Details on the tax’s rollout are not currently known, however.
• Tax Deductions. California permits the same tax deduction as is allowed for federal income tax purposes for premiums paid for the purchase of qualified LTC insurance. The federal tax incentives also apply.
• Reverse Mortgages. Reverse mortgages are available in California. A reverse mortgage is a home equity loan where the borrower does not have to make payments. California law says you must be age 62 or over, occupy the property as a principal residence, own the home outright, or have significant equity in the home. In addition, there should not be any tax liens on the property. Many people in California have significant equity in their homes due to rising home values. This allows you to use that equity to benefit your retirement lifestyle and reduce stress and anxiety.

Cost of Long-Term Care in California

Below we’ve listed the median costs for long-term care in the state of California. It’s broken down by type of care, since different care types can come with wildly different expected charges.

Important Note: These are median expected prices for 2024, and won’t represent the full range of possible pricing. They’re based on LTC’s extensive data models, and can help identify financial needs for you or a loved one.

Does Where You Live Matter?

Yes, and it can actually be a big deal. Costs vary dramatically depending on where you live, and in a large state like California, this is as true as ever. The northern parts of the state will tend to be less expensive, with higher costs in southern parts of the state. Even these general tendencies can have exceptions, so it’s important to speak with a long-term care specialist to drill down to an exact cost for care in your area.

All prices below listed are based on annual medians, but are listed both as annual and monthly charges. Your care provider or insurance policy may break down charges monthly or even daily.

Adult Day Care

California Median: $22,688 annual, $1,906 monthly

Assisted Living Facility

California Median: $59,849 annual, $5,029 monthly

Home Health Aide

California Median: $68,278 annual, $5,738 monthly

Homemaker Services

California Median: $67,316 annual, $5,657 monthly

Semi-Private Room (Nursing Home)

California Median: $118,638 annual, $9,970 monthly

Private Room (Nursing Home)

California Median: $142,534 annual, $11,978 monthly

Generally speaking, California median prices run higher than national medians do. Depending on the type of care, some sources estimate California costs to be as much as 35% higher than national medians.

If the charges for some of these seem high, remember that there are payment and assistance options, both in the form of Long-Term Care Insurance that you can obtain through a Long-Term Care Insurance Specialist, or via governmental assistance programs that you may qualify for.

Your Long-Term Health, Covered

Regardless of where you are in your journey, it is worthwhile to look ahead and plan for the inevitable considerations of aging.

While some recommendations and options are true regardless of what state you live in, state-based legislation and restrictions can inform what options you have available to you.

If you’re interested in speaking with a Long-Term Care Insurance specialist, follow the link below, or check out our additional resources on long-term care information for California.

NEXT UP: California Long-Term Care Resources

State Resources: California Department of Aging