There are two realities facing most seniors. One is that the odds are good we’ll need long-term care someday. The other is that it’s going to be expensive.
We’ve written articles here on the Blog before about how to pay for long-term care, but it’s clearly a topic worth revisiting because few of us will be unaffected. Last year, we came across this article about the subject from Kiplinger, written by reporter Elaine Silvestrini, describing some options to pay for the care you’re likely to need one day. Even though the article is a year old, the issues it describes are as current as today’s headlines.
Silvestrini actually goes into a bit more detail than we have room for here, so we’ll cover her most pertinent tips and direct you to the original article for the rest of the story.
Senior Care Statistics: Why Retirement Planning Must Include LTC
“Chances are you will need some form of long-term care (LTC) during your lifetime — unless you are one of the lucky people who stay physically fit, retaining their health and mobility,” Silvestrini begins.
Statistics back her up: the federal government estimates that 56 percent of those turning 65 today will need long-term service and support. Other studies put the figure closer to 70 percent, and that doesn’t count those who might need a more modest degree of care from home health agencies.
But surprisingly, Silvestrini adds, most adults “haven’t taken any steps to prepare for LTC when planning their retirement.” She quotes a 2022 AARP report which shows that only one-third of middle-income baby boomers have a plan for long-term care.
The Rising Demand for Assisted Living and Skilled Nursing Facilities
Demand for care services is not limited to in-home care. Silvestrini writes that the population of long-term care facilities (including assisted living, memory care, and skilled nursing) is expected to grow by over 75 percent to 2.3 million residents by 2030, according to the National Center for Health Statistics.
“These numbers suggest that a substantial portion of the population does not actively plan for long-term care,” Silvestrini notes, “which may be due to financial restraints, underestimating their need for care, or misconceptions about the role Medicare plays in covering their healthcare costs.”
She notes that higher-income individuals and those with access to a financial advisor are more likely to have made long-term care plans.
Breaking Down the Rising Costs of Long-Term Care
Silvestrini’s original article uses 2024 statistics, but we’ve updated it using the authoritative Genworth Cost of Care survey for 2025. Her article lists average care costs, which she describes with understatement as “daunting.” These costs vary widely by state and metro area, but here’s the U.S. average for 2025 with comparisons to 2024 figures.
Assisted living community costs increased by 5 percent to an annual national median cost of $74,400 per year. Hiring a home health aid will cost an average of $80,080 annually for 44 hours of care per week. This reflects a cost increase of 3 percent from 2024 to 2025.
Meanwhile, a semi-private room in a skilled nursing facility now costs $114,975, up 3 percent. The cost of a private room in a skilled nursing home rose 1 percent in 2025 to $129,575.
The Truth About Government Benefits: Does Medicare Cover Long-Term Care?
With those sobering figures, Americans need to be clear-eyed about paying for care – but they’re not. Exhibit A is the fact that 58 percent of U.S. adults continue to believe Medicare will cover the cost.
They’re seriously wrong, says Silvestrini. “Medicare doesn’t cover long-term-care expenses,” she writes, “so many Americans are on their own to fund their care.”
The options are relatively few: traditional long-term-care insurance, a hybrid insurance policy, an annuity with a long-term-care component – or, if you deplete your assets, you may qualify for Medicaid. Otherwise, get used to writing big checks each month.
Of course, there are other options, which Silvestrini includes. You can convert your home equity into a fund for care, either through an outright sale or via a reverse mortgage.
You might also do what millions do and rely on your family for care. Just be honest with your loved ones about the disruption and financial cost this might trigger. Considering the high cost of long-term care, here’s our take on ways to cover LTC costs.
Evaluating Traditional Long-Term Care Insurance Policies
Silvestrini continues her Kiplinger article by detailing several payment options, starting with traditional long-term care insurance.
“The LTC insurance market is suitable for a small percentage of consumers,” Silvestrini writes, quoting industry expert Jesse Slome. “And insurance trade association LIMRA estimates that just 3 percent to 4 percent of people 50 and older have long-term-care insurance.”
“First, you have to apply at an age where you can get the insurance,” Slome told Silvestrini. “You have to be in good health, and you have to have the financial wherewithal.” You also, he adds, have to be a person who plans ahead.
Why Are Long-Term Care Insurance Premiums Rising?
“A major deterrent to long-term care insurance is cost,” says Silvestrini. “Stand-alone long-term-care insurance is expensive and difficult to get on the open market.”
There used to be many more companies offering policies: one state’s website said there were 16 long-term care insurance companies just 20 years ago compared with six today. Silvestrini explains that the attrition was self-inflicted. “Poor pricing decisions and inaccurate forecasts of policyholder dropout rates, longevity, and need for care whittled down the number of insurers that offer new long-term-care insurance policies,” she writes.
According to the American Association for Long-Term Care Insurance, in 2025 there were only six companies selling traditional long-term care insurance: Mutual of Omaha; Thrivent; National Guardian Life; New York Life; Northwestern Mutual Life; and Bankers Life. Kiplinger notes that this list does not include companies offering hybrid LTC and traditional life insurance products. We note that, since this article was first published, Genworth Insurance has re-entered the LTC insurance marketplace after a decade’s hiatus.
The Financial Benefits of Buying Long-Term Care Coverage Early
Waiting to buy a policy until you need it is going to be a costly decision – and it might not even be possible. As Silvestrini advises, “If you want to buy LTC insurance, getting a policy when you’re in your forties or early fifties can keep the premiums down. The older you are when you apply, the more you’ll pay for premiums, and the more likely you aren’t able to buy insurance at all.”
Indeed, applying for LTC coverage is no guarantee that the company will accept your application. A survey from 2020 showed that one applicant in five in their fifties was denied coverage, and for applicants in their 70s the rejection rate was twice as high, at almost 40 percent.
Current industry estimates show the benefit of buying coverage early. For comparable policies, the coverage for which a 55-year-old man pays about $950 per year will cost that same man about $1,700 if he delays purchase until at age 65. For a woman, the contrast is similar: $1,500 annually at age 55 compared with $2,700 at 65.
Remember, too, that those premiums are likely to increase. “One analysis of thousands of rate increases found the average LTC insurance policy rate rose by 112 percent over 25 years,” Silvestrini writes, “although premiums may have risen less sharply in recent years as the companies that remain in the market have gotten better at pricing policies.”
Proven Strategies to Lower Your Long-Term Care Insurance Premiums
Apart from buying when you’re younger, Silvestrini offers several helpful suggestions that might reduce LTC insurance premiums for consumers looking to cut costs.
One highly effective strategy is to apply as a couple. According to the AALTCI, married people and even unmarried adults who live together may be offered discounts if they both purchase comparable coverage. They could also look into buying a joint policy with a shared benefit, which allows them to pool their benefits. If one spouse exhausts his or her benefits, he or she can use the other spouse’s share.
Another option is to increase the waiting period, or elimination period, which is the delay before policy benefits kick in, typically lasting 30 to 90 days. You will have to self-pay for care during the waiting period, but choosing a longer delay typically results in a lower premium.
Purchase Time-Specific Rather Than Lifetime Coverage
You can further limit costs by selecting coverage for a specific period instead of lifetime coverage. According to the AALTCI, a policy that pays for up to five years of care, for example, will cost between 16 percent and 27 percent less yearly than a policy with an unlimited lifetime benefit.
Additionally, policyholders can reduce their ongoing expenses by paying premiums annually. You might be able to get a substantial discount if you agree to pay your premium once a year instead of monthly.
It is also wise to ask your employer about available benefits. You may find that your employer offers long-term care policies to employees, which might make qualification easier.
One more idea to keep in mind at tax time is that some LTC expenses and premiums can be deductible. This past Kiplinger article explains how this works. Because tax laws change, make sure you get the right advice before submitting your deduction.
Exploring Alternative Funding Solutions: Hybrid Insurance and Annuities
Even as fewer firms offer traditional policies, a growing number are selling a form of hybrid insurance. This involves bundling LTC coverage into other kinds of insurance policies.
“Primarily,” Silvestrini writes, “this is taking the form of life insurance with an LTC component. With these policies, if you need long-term care, you use some or all of the death benefit to pay for it. If you pass away without needing long-term care, your heirs receive the full death benefit.”
There’s a catch: hybrid policies tend to cost more than stand-alone LTC insurance. But there’s also an upside: “[T]hey’re more widely available,” the article states. What’s more, rates have actually dropped a bit on these policies over the past several years.
That said, the insurance industry in 2024 quoted an average one-time premium of $71,700 for men and $76,740 for women for a typical hybrid LTC policy. Obviously, you need to talk with your financial adviser before making such a major decision.
Maximizing Benefits with Income Annuities and QLACs
As we noted above, Silvestrini includes other details for which we lack the space. That’s why you should read the original Kiplinger article if you want to dive in more deeply.
For example, another hybrid product is an income annuity that includes a provision to increase your payout if you need long-term care. It might be a good idea, says Silvestrini. “However,” she cautions, “the payout may not cover the full cost of care, and the added cost of this provision, known as a rider, can reduce the standard payout from the annuity.”
The Qualified Longevity Annuity Contract, or QLAC, is another variation. A QLAC, Silvestrini explains, “is a deferred income annuity that enables you to defer taking Required Minimum Distributions or RMDs from your IRA until age 85. As it stands, you’re required to take RMDs when you reach age 73.” There are limits and restrictions, so talk it over with your financial planner.
Using Home Equity and Health Savings Accounts (HSAs)
Many seniors will eventually decide to sell their family home and use the proceeds to cover entry fees in a continuing care facility. These fees can run to $200,000 or more depending on the facility.
But a reverse mortgage, which we wrote about some time back here on the Blog, can be an excellent means of putting the equity in your home to use for your care.
Another device to consider is a high-deductible health insurance plan. Contributions are pretax (or tax-deductible if you open an HSA on your own), your investments grow tax-free, and withdrawals aren’t taxed if you use them for qualified medical expenses, including costs for long-term care.
You can also use HSA money tax-free to pay premiums for long-term-care insurance, and the amount you can withdraw annually depends on your age.
Not to sound repetitive, but tools like a reverse mortgage and an HSA aren’t for everyone. Get qualified advice and do your homework before deciding which funding route to take.
Understanding the Emotional and Financial Impact on Family Caregivers
The role of your family in providing care is vital, as tens of millions of seniors and their caregivers can attest. While the choice to rely on family caregivers may be driven by financial pressures, for many families it’s the only loving option they will consider.
“According to the Department of Health and Human Services, the average lifetime value of unpaid care after age 50 among those who receive care is $168,000,” says Silvestrini. “Nearly one-fourth of care recipients receive unpaid care valued at $250,000 or more.”
There are many resources available for caregivers, including this excellent website from AARP. One thing we strenuously advise at Life Point Law and AgingOptions is the critical importance of talking through your expectations with your loved ones well before the need for care arises.
Do they know what sort of care you prefer? Do they know what plans you’ve made to cover the cost? Are everyone’s expectations in line?
As with every other aspect of long-term care, planning is key. Please contact us and let us help you get started on the right path.
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