End-of-life care costs an average of $11,618 out of pocket in the last year of life, according to research from the National Bureau of Economic Research. But that average masks enormous variation: 10% of families spend more than $29,000, and the top 1% exceed $94,000. What you actually pay depends heavily on the type of care, where it happens, and what insurance covers.
Where the Money Goes
The single largest expense category is nursing home and hospital care, averaging $4,731 in the final year of life. About two-thirds of that goes to nursing homes. After that, the costs spread across several categories: home health aides and helpers ($1,966 on average), insurance premiums ($1,746), prescription drugs ($1,496), and home modifications like wheelchair ramps or grab bars ($721).
These figures represent only the out-of-pocket portion, meaning what families pay after insurance. The total cost of care billed to insurers and government programs is dramatically higher. For families, though, the out-of-pocket numbers are what hit the bank account, and they can accumulate quickly when care stretches over months.
Nursing Home Costs
Nursing facilities are often the most expensive option, especially for patients who need round-the-clock skilled care. Rates vary significantly by region. In New York State, for example, average daily rates in 2026 range from $453 in the western part of the state to $515 in the Rochester region, with New York City averaging $502 per day. That translates to annual costs between roughly $165,000 and $188,000.
New York is among the most expensive states for nursing home care, so these figures represent the upper end nationally. But even in lower-cost regions, skilled nursing facilities commonly run $200 to $300 per day. Few families pay the full amount out of pocket. Medicaid covers nursing home care for people who qualify financially, and Medicare covers short stays following a hospitalization. But for patients who need long-term placement and don’t qualify for Medicaid, the bills can be devastating.
Home-Based Care Costs
Many families choose to keep a loved one at home during their final months, which often requires hiring home health aides. The median hourly wage for home health and personal care aides is $16.12 nationally, based on Bureau of Labor Statistics data from 2023. However, what families actually pay through a home care agency is typically higher, since agencies charge a markup to cover overhead, insurance, and scheduling.
Private-pay rates through agencies commonly range from $23 to $35 per hour depending on location, and costs climb fast when you need many hours of coverage. A patient who needs 8 hours of daily help at $25 an hour would face about $6,000 per month. Full-time, 24-hour care at home can easily exceed $15,000 monthly, rivaling nursing home costs. Some families reduce expenses by splitting duties between paid aides and family caregivers, but that comes with its own physical and emotional toll.
What Hospice Covers
Hospice care is the most financially protected option for patients nearing the end of life. If you’re enrolled in Medicare and receive care from a Medicare-approved hospice provider, you pay nothing for the core hospice benefit. That includes nursing visits, medications for pain and symptom management, medical equipment like hospital beds and oxygen, and counseling services. The benefit is designed to cover everything related to the terminal diagnosis.
There are two small exceptions. Outpatient prescriptions for pain and symptom control carry a copayment of up to $5 each. And if you use inpatient respite care, which provides short-term facility stays so your caregiver can rest, you may pay 5% of the Medicare-approved amount. That copayment is capped at the annual inpatient hospital deductible, so it won’t spiral out of control.
Most private insurance plans and Medicaid also cover hospice, though the specifics vary. The key eligibility requirement is a prognosis of six months or less if the illness runs its expected course, certified by a physician. Hospice doesn’t mean giving up. Patients can leave hospice and return to curative treatment at any time.
Palliative Care vs. Hospice
Palliative care focuses on comfort and quality of life but, unlike hospice, it can run alongside curative treatment at any stage of illness. Medicare, Medicaid, and most private insurance cover palliative care consultations, typically billing them like any specialist visit. Your out-of-pocket cost depends on your plan’s copayments and deductibles. For uninsured patients, some palliative care programs offer charity care.
The financial advantage of palliative care is indirect. Studies consistently show it reduces emergency room visits, unnecessary hospitalizations, and aggressive interventions that drive up costs without improving quality of life. For families weighing options, early palliative care involvement often lowers total spending while keeping the patient more comfortable.
How Insurance Shapes What You Pay
Your insurance situation is the single biggest factor in your final costs. Medicare beneficiaries who enroll in hospice face minimal out-of-pocket expenses for terminal care. Those who remain in traditional Medicare without hospice pay standard deductibles, copayments, and coinsurance for hospitalizations, doctor visits, and drugs, which can add up rapidly during intensive treatment.
Medicaid covers nursing home care and hospice for qualifying individuals, but eligibility requires meeting strict income and asset limits. Many families face a painful gap: too much in savings to qualify for Medicaid, but not nearly enough to cover years of long-term care. Long-term care insurance, if purchased well before the need arises, can fill this gap, but relatively few Americans carry it.
For families without strong insurance coverage, the financial pressure is real. The NBER research found that end-of-life spending is highly concentrated among a subset of patients, meaning some families face costs far above the average. Patients with dementia, those who require extended nursing home stays, and those with multiple chronic conditions tend to have the highest bills.
Practical Ways to Reduce Costs
Enrolling in hospice early is the most effective way to lower out-of-pocket spending. Many families wait until the final days, missing months of covered care. The Medicare hospice benefit is available for up to six months and can be renewed, so there’s no financial reason to delay once the medical criteria are met.
If home care is the plan, look into whether your state’s Medicaid program offers home and community-based waivers, which can cover aide services that would otherwise be private pay. Veterans may qualify for home health benefits through the VA. And nonprofit hospice organizations sometimes provide supplemental support like volunteer companions, equipment loans, and bereavement services at no charge.
Having an advance care plan that clearly states the patient’s wishes also reduces costs, not as a direct financial tool, but because it prevents unwanted aggressive interventions in the final weeks. Hospitalizations and ICU stays in the last month of life are among the most expensive events in medicine, and many patients, if asked, would have chosen comfort care instead.