Closures and smaller cost increases at many long-term care facilities were brought on by the 2008-2009 recession, according to Newark, N.J.-based Prudential Financial Inc.'s bi-annual 2010 Long-Term Care Cost Study. The report includes consumer views that gauge sentiment regarding the cost, awareness, funding and future need for long-term care.

"Consumer misperceptions continue to exist about long-term care services and coverage options," says Malcolm Cheung, vice president of Prudential Long-Term Care Insurance. "Of those surveyed, 25 percent said they had no idea what a day in a nursing home costs, and more than a third continue to believe private health insurance and Medicare will cover their future extended care costs."

Since 2006, increases in long-term care costs have decelerated, but, according to Prudential's report, the compound annual growth rate averaged 6 percent from 2004 to 2010. During this time, the consumer price index grew by 2.5 percent, underlining the importance of selecting the proper inflation protection for long-term care insurance.