Yeah, they do, but there are lots of ways to skin that cat. The 2013 national average for nursing homes is about $80k annually and for assisted living about half that. So your 120k annually is at the high end. But it's still a huge consideration. Nationally, two thirds of nursing home costs are paid my Medicaid, which basically means the person is broke except for whatever assets they've protected. And the rules for what you can protect vary by state. So there's no single "good idea" that works best everywhere.
Any legitimate financial plan will factor in this issue, and as I say, there is a wide variety of solutions, including insurance (of various kinds) and many other approaches as well.
One thing is universally true: if you have a good lifetime financial plan and if you put it into effect reasonably early, the more options you'll have.