Why the best time to consider coverage is years before any care is required.
Seven out of ten people over the age of 65 will require some form of long-term care. That care — whether in-home assistance, assisted living, or a nursing facility — costs far more than most families anticipate. A private nursing home room now averages over $100,000 per year nationwide, and that figure is rising. Yet the majority of retirees have no dedicated plan to cover it, relying instead on a mistaken belief that Medicare will step in.
Medicare pays for skilled nursing — not the custodial care that defines most long-term care events.
Medicare pays for short-term skilled nursing following a qualifying hospital stay. It does not pay for custodial care — the ongoing assistance with bathing, dressing, eating, and mobility that defines most long-term care needs. Medicaid does cover custodial care, but only after you have spent down nearly all of your assets. For families who spent decades building a retirement nest egg, relying on Medicaid means watching that savings disappear before benefits begin.
Long-term care insurance works by paying a daily or monthly benefit when you meet certain care criteria, typically the inability to perform two of six Activities of Daily Living. Policies can be structured to cover in-home care, assisted living, memory care, and nursing facilities. Hybrid life-LTC policies are increasingly popular because they provide a death benefit if care is never needed. The key rule is universal: the best time to apply is years before you need coverage. Premiums are based on your age and health at application, and health changes can result in denial or significantly higher costs.
