Home care costs grow much faster than inflation
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One year of home care now costs more than twice the average retiree's annual Social Security benefits, and costs are growing much faster than inflation, according to an AARP analysis shared first with Axios.
Why it matters: Most older adults will need such personal care services, which aren't covered by Medicare. The majority wind up paying out of pocket or leaning on family members as caregivers.
- "The costs are huge, largely out of the realm of what people can afford, and growing so rapidly," said AARP public policy officer Debra Whitman.
Driving the news: The cost of home care rose almost 8% from May 2025 through May 2026, per federal data released Wednesday. That's nearly double the rate of general inflation during that period.
- AARP calculated in March that a year of home care cost $51,480 — but seniors currently receive an average of $24,950 from Social Security each year.
- Home care cost inflation over the past year amounts to about two additional months of Social Security benefits, AARP said.
- "It's not like if you need home care, you can go back to work and earn more than your Social Security check," Whitman said. "You're really relying on the assets that you have at that point."
Zoom in: Some of the home care cost increases can be attributed to rising wages for personal care aides.
- The median wage for aides increased 22% from 2021 to 2025. The median hourly rate for an aide last year was $17.21.
- Growing demand for in-home services is helping drive the trends, AARP said.
What we're watching: Senate Democrats last month released a framework for making long-term care more affordable, which calls for creating "a home care guarantee for people with Medicare."
- But shifting the ever-growing costs onto the federal government with Medicare and Social Security already on the brink of insolvency could create other problems.
The bottom line: "Long-term care is the crisis of our generation," Whitman said.
- "We do need really a revolution, and I think these cost numbers are pointing out that families are going to need ... more systemic solutions that will help them with with these costs," she added.
