Healthcare CostsLong-Term CareRetirement

How Much Do You Know About Long-Term Care?

By September 18, 2020 No Comments

Here are five things you need to know about long-term care.


  1. Medicare doesn’t cover it.1

Medicare Part A will pay the bill for up to 20 days of skilled nursing facility care, but after that, you will have to cover some costs out-of-pocket. After 100 days in a facility, you will have to cover ALL costs out of pocket. (The only way to “reset the clock” for Medicare coverage for some of these services is if the patient can somehow go without skilled nursing care for 30 or 60 days or if they require an “admitted” hospital stay of three full days or longer.)

  1. A semi-private room in a skilled nursing facility costs about $90,000 a year.2,3

The median cost of a semi-private room is now $89,297. A private room in an assisted living facility has a median annual cost of $100,375 yearly. A home health aide could run you up to $4,385 per month for full-time care. Even if you just need someone to help with activities of daily living, such as eating, bathing, or getting dressed, the median hourly expense is not cheap: non-medical home aides run about $23 per hour, which at 10 hours a week, means nearly $12,000 a year.

  1. Someone turning 65 today has a 70% chance of needing extended care.4,5

That means that by 2030, it’s estimated that around 24 million Americans will need extended care.  This is double the current number already receiving care.

  1. Medicaid can pay nursing home costs, if you have virtually no assets.6

Medicaid covers long-term care costs, but in order to qualify for Medicaid, you have to spend down most of your assets and leave your spouse and heirs with very little.

The question is, do you really want that to happen? While Medicaid rules vary by state, in most instances, a person may only qualify for Medicaid if they have no more than $2,000 in “countable” assets ($3,000 for a couple). A homeowner can even be disqualified from Medicaid for having too much home equity. A primary residence, a primary motor vehicle, personal property, and household items, burial funds of less than $1,500, and tiny life insurance policies (with face values of less than $1,500) are not countable. So, yes, under these economic circumstances, Medicaid may end up paying for long-term care expenses.

  1. Long-term care insurance has changed.

Traditional long-term care insurance is often cheaper when you’re younger, but the problem is, the premiums may get more expensive as you get older—to the point where you may not be able to afford them at all at the time when you most need coverage. Additionally, all those premiums you paid through the years for traditional long-care insurance may be for nothing if you’re one of the lucky ones who doesn’t end up needing long-term care at all.

Today’s permanent life insurance policies offer options. For one thing, it’s no longer the case that you either “use it or lose it.” If you don’t need long-term care, an optional death benefit can go to your beneficiaries tax-free in most cases. Plus, some policies allow coverage for in-home care, which older traditional policies often don’t—meaning you can continue to live in your home comfortably while receiving the care you need.

The best time to consider insurance is when you are healthy. While you may be paying a premium for a longer amount of time, the expense may pale in comparison to paying for unexpected medical costs out of pocket.7


Have you planned for long-term care?

Give us a call. Sylvan Financial Advisors in Englewood Cliffs, NJ at 201-282-5332.



  1., March 26, 2020
  2., June 24, 2020
  3., May 11, 2020
  4., February 18, 2020
  5., July 23, 2020
  6., July 23, 2020
  7., April 17, 2020


All securities offered through The Investment Center, Inc. Bedminster,NJ- Member FINRA/SIPC. Advisory Services provided through IC Advisory Services, Inc.-An SEC Registered Investment Advisor. Sylvan Financial Advisors is not affiliated with The Investment Center, Inc. or IC Advisory Services, Inc.