Ways to Pay for Long-Term Care

While we all hope to remain healthy and active as we age, there is a possibility that an unforeseen medical condition or accident could limit our mobility and change our medical care needs.  While Medicare and supplemental Medicare coverage will cover some costs, these plans and policies will not pay for most long-term care services even if they are necessary.  Consequently, planning for the possibility of long-term care is critical.  Here are some ways to pay for your long-term care:

What is Long-Term Care?

Long-term care refers to skilled nursing, hospice, and personal medical care services which an individual may need due to a severe medical condition, dementia, a disability, or another condition.  These services could be those performed in the individual’s home, an assisted living community, adult foster care (which is a smaller home-like version of assisted living), adult day care, or nursing home.  The provider is typically helping the individual with their daily living tasks which they are unable to complete without assistance.

Private Pay

As the name implies, private pay is an option which allows you to use your own money to pay for long-term care services.  This is the most expensive choice and will involve using only your own resources to finance your personal care.  In some cases, this can mean paying thousands of dollars per month.  Due to the expense associate with this type of care, private pay is not a realistic option for most people. 

Long-Term Care Insurance

Long-term care insurance allows a policyholder to pay a premium to an insurance company to cover these services should they be necessary.  It is a good idea to look into long-term care insurance sooner rather than later.  This is because generally, these plans are not available for purchase by those who already need long-term care.  In other words, this policy needs to be purchased in advance of the onset of the condition.   Long-term care plans can be expensive, but they are a way to help make sure you have coverage for these services.  Long-term care insurance becomes harder to get as you age, so it is best to get a policy while you are younger.  The two downsides we hear from clients with traditional long-term care insurances policies are:  (1) if I pay the premium for years and never use it, there is no refund when I die; and (2) there is no limit on premium increases over the years, and increases are most common as you get older and are more likely to need the insurance.

Hybrid Long-Term Care Insurance Policy

One alternative to traditional long-term care insurance are hybrid long-term care insurance policies, also called “asset-based polices”.   A hybrid policy is connected to a permanent life insurance policy.   The policyholder pays their insurance premiums and can take funds from their paid premiums if long-term care is needed.  If the policyholder does not have enough to cover care, the insurance company pays the difference.  Unlike regular long-term care, if the policyholder never uses their premiums for their care, the money they spent on the policy can pass to their heirs.  And, unlike traditional long-term care insurance, your policy premiums never increase.


Medicaid covers long-term care in a skilled nursing home.    While there are ways to protect assets, without careful planning some of your estate will go to repay Medicaid rather than your beneficiaries.  

We have experience helping clients plan for their long-term care needs and can provide you with the guidance you need.  Please contact us online or by phone if we may be of assistance.

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