Caregiver Costs: Family Spending Rises 60 Percent in Five Years

The financial burden on American families providing care for disabled, chronically ill, or elderly relatives has intensified sharply. According to a study released Wednesday by AARP, these caregivers now spend an average of $11,508 out of pocket each year. This amount represents a substantial portion of their earnings, averaging 31% of a caregiver's income.

The rate of cost increase has far outpaced general economic trends. The average out-of-pocket expense for caregiving is approximately 60% higher than it was five years ago. During that same five-year period, the federal Bureau of Labor Statistics measured overall inflation at 24%. The rise in caregiving costs is therefore more than double the rate of general price growth.

The study, which surveyed 2,538 family caregivers, identifies specific categories driving these expenses. Food, housing, and medical costs constitute the largest share of the total spending. Megan O'Reilly, AARP's vice president of governmental affairs, attributed the rise to the complexity of care provided at home. "The more care that's needed, the more it costs," she said. She noted that caregivers are managing more complicated medical tasks than in the past.

Higher costs often arrive alongside a reduction in household income. The survey found that caregiving frequently forces individuals to cut work hours or leave their jobs entirely. About half of the respondents reported making major financial sacrifices to maintain care. These sacrifices included working more hours, reducing personal savings, or drawing down retirement funds.

The scope of the issue is expanding. Approximately 63 million people, or about one in four adults, currently provide ongoing help to a relative or friend. Estimates suggest that 70% of those turning 65 today will require some form of assistance. Medicare does not cover routine help at home or in a facility, leaving families to cover these gaps themselves.

The cost of professional alternatives remains high. Genworth reported that 40 hours of in-home help per week cost about $72,792 per year in 2025. A shared room in a skilled nursing facility averaged $115,000 per year during the same period. These figures illustrate the financial pressure on families who rely on informal care networks.

Public assistance programs offer limited relief. All states pay certain family caregivers through Medicaid. In California, more than 800,000 caregivers earn between $16.90 and $25 per hour for in-home work. However, funding for these programs may face pressure, as the current administration's budget bill proposes cutting nearly $1 trillion from Medicaid funding over the next decade.

Legislative efforts are underway to address the financial strain. Six states currently offer tax credits, typically ranging from $1,000 to $5,000 annually, for expenses such as installing safety railings. Two other states have narrower programs. A bipartisan bill introduced last year proposes a national $5,000 credit. Additionally, fourteen states and the District of Columbia require most employers to offer paid family and medical leave, while a federal bill proposes up to 12 weeks of partly paid leave for some workers.

Nancy LeaMond, AARP executive vice president, stated that the cost of care has historically received less attention than gas, food, or health care. She expects this to change as the number of paying families grows. "When you see the number of people paying this kind of money, I think that'll be an impetus for action in the legislative arena," she said.