Originally published September 2015. Last updated March 2026.
A 65-year-old today has roughly a 70% chance of needing some form of long-term care, according to the Department of Health and Human Services. And Medicare doesn’t cover most of it.
The costs are staggering. The 2024 Genworth Cost of Care Survey shows:
- Assisted living facility: $64,200/year (national median)
- Semi-private nursing home room: $104,000/year
- Private nursing home room: $116,800/year
- Home health aide: $75,500/year (44 hours/week)
Average length of need: 3.7 years for women, 2.2 years for men. That’s potentially $200,000-$400,000 in care costs.
Here’s how to reduce the financial impact.
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1. Buy Long-Term Care Insurance Before You Need It
LTC insurance premiums are based on your age and health at the time of application. A healthy 55-year-old couple might pay $3,000-$5,000/year for a solid policy. Wait until 65 and the same coverage could cost $7,000-$12,000/year, if you can still qualify medically.
The sweet spot for purchasing: ages 50-60, while you’re still healthy and premiums are manageable.
2. Consider Hybrid Policies
Traditional LTC policies have a “use it or lose it” problem. If you never need care, you’ve paid premiums for decades with nothing to show for it. Hybrid policies solve this:
- Life insurance + LTC rider: If you need care, the policy pays LTC benefits. If you don’t, your heirs get a death benefit. Your premiums aren’t wasted either way.
- Annuity + LTC rider: Similar concept. The annuity provides LTC benefits if needed, and remaining value goes to beneficiaries.
Hybrid policies typically cost more upfront (often a single premium of $50,000-$200,000) but eliminate the risk of wasted premiums.
3. Share a Policy with Your Spouse
Shared benefit policies let you and your spouse draw from a combined pool of benefits. If one spouse uses less care, the other can access the remaining pool.
This usually costs less than two individual policies while providing more flexibility. It’s especially useful because the odds that both spouses need extended care simultaneously are lower than each needing it independently.
4. Use Home and Community-Based Care First
Nursing home care is the most expensive option. Before going straight to a facility:
- Adult day care: $22,100/year (national median), a fraction of residential care costs
- Home health aides: Can start with a few hours per week and scale up
- Family caregiving with professional support: Respite care, meal delivery, and transportation services can extend how long someone stays at home
5. Plan for Medicaid as a Last Resort
Medicaid covers long-term care for people who have exhausted their assets. But qualifying requires spending down to very low asset levels (rules vary by state). In Kentucky, the individual asset limit is $2,000, though there are protections for the healthy spouse.
Medicaid planning should start years before care is needed. Asset protection trusts typically need to be established at least five years before applying (the “look-back period”).
FAQ
Does Medicare cover long-term care?
Barely. Medicare covers up to 100 days in a skilled nursing facility after a qualifying hospital stay, and only if you’re receiving skilled (not custodial) care. After day 20, there’s a copay of $204.50/day (2025). For most people, Medicare covers rehabilitation after an event (hip replacement, stroke), not ongoing long-term care.
When should I start planning for long-term care?
In your 50s. That gives you time to buy insurance at favorable rates, build an HSA, and structure your assets. Waiting until care is needed means you’re paying retail with no planning advantage.
Schedule a free 20-minute consultation to talk through long-term care planning.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
