Even with the population aging in greater numbers, Americans are woefully unprepared for the costs of nursing home care and assisted living. And those costs are rising substantially every year.

The average national cost in 2007 of one year in a private nursing home was $74,806 ($205 per day), according to a survey of 11,000 nursing homes by Genworth Financial. Perhaps even more alarming than the price tag is that Americans think someone else will pay for it: Forty-four percent incorrectly believe that Medicare or private health insurance will pay for long term care, according to Genworth.

Costs vary significantly by region: On average, those in the Northeast pay $40,000 more per year for nursing home care than those in the Midwest.

Genworth found that the average annual cost of an assisted-living facility is $32,573 for a one-bedroom unit, up 13 percent in four years. Here, too, Northeasterners are getting a bigger bill: $12,000 more per year than folks in the Southeast. The most expensive one-bedroom unit in the survey was found in Massachusetts for $4,753 per month; the least expensive was in North Dakota at $1,609 per month.

It can be just as expensive to stay at home. The average annual cost to receive 40 hours a week of home health care is $52,977 (based on an average hourly rate of $25.47).

By 2020, 12 million seniors will need long-term care, according to the U.S. Department of Health and Human Services (HHS). People who reach age 65 will have a 40 percent chance of entering a nursing home and about 10 percent of them will stay there five years or more.

With those numbers in mind, long term care (LTC) insurance looks like a steal. The average premium for a long term care policy in 2005 (the latest figure available) was $1,918, according to America's Health Insurance Plans, an industry trade group. LTC insurance covers nursing home and/or home health care costs (up to a daily maximum). The average LTC insurance buyer is age 61.

The Medicare surprise: No payment for that

If you find yourself in poor health and needing long term care, Medicare is not going to come to your rescue. Medicare will pay only for medically necessary skilled nursing facility or home health care for up to 100 days if you meet certain conditions, according to HHS. After 20 days, you must pay a coinsurance ($124 per day in 2007).

Medicaid pays for certain nursing home care for seniors with low incomes and limited assets. In most states, Medicaid also pays for some long-term care services at home and in the community. Services and eligibility vary from state to state. In other words, you'll need to deplete your assets before you're eligible for Medicaid benefits.

Average daily and annual room rates for private nursing home in 2007