What Is Long Term Care and How Do You Pay for It
As we age, many of us require help with the activities of daily living such as; bathing, dressing, eating, or using the bathroom. When you receive assistance for these activities, this is called long-term care. Understanding what is long term care, what it includes and how to pay for it is essential to plan a secure and dignified future.
Long-Term Care
Long-term care (LTC) refers to a wide range of services and supports that help people with chronic illnesses, disabilities, or aging-related conditions. Unlike acute medical care that treats illness or injury, LTC focuses on personal care rather than a cure.
Long-term care can include:
- Help with Activities of Daily Living (ADLs): bathing, dressing, toileting, eating, transferring, and continence.
- Skilled nursing care in a facility
- In-home care and personal care aides
- Adult day programs
- Assisted living facilities
- Memory care for individuals with Alzheimer’s or dementia
Who Needs Long-Term Care
According to government estimates, about 70% of people turning 65 today will need some form of long-term care during their lifetime. The need may appear gradually due to aging or suddenly after a stroke, fall, or medical event.
Long-Term Care Cost
Please note; costs vary widely based on location and the type of care, but here are national averages (as of 2025):
- In-home care aide: $33/hour
- Assisted living facility: $6,077/month
- Nursing home (semi-private room): $9,555+/month
As you can see, these services are expensive and can quickly deplete savings, making it critical to understand the options for covering them.
Paying For Long-Term Care
Medicare
Medicare does not cover most long-term care. It may pay for short-term, skilled nursing care or rehab (up to 100 days following a hospital stay), but does not cover custodial care (help with dressing or bathing).
Medicaid
Medicaid is the largest payer of long-term care services, but it’s needs-based. You must meet strict income and asset limits to qualify. Some states offer Medicaid waiver programs that allow people to receive care at home instead of in a facility.
Helpful tip: Planning ahead can help individuals spend down assets legally and qualify for Medicaid when needed.
Long-Term Care Insurance
LTC insurance helps cover costs in various settings; home, assisted living, or nursing facilities. These policies vary by coverage and price, and premiums are lower if purchased earlier (typically in your 50s or early 60s).
Some modern alternatives include:
- Hybrid life/LTC policies: Combine life insurance with long-term care benefits
- Critical illness or short-term care plans
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Veterans Benefits
Eligible veterans may qualify for Aid and Attendance or other VA programs that help pay for in-home care or facility care.
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Personal Savings and Assets
Many people use retirement savings, home equity (via reverse mortgage or sale), or income to pay for care out of pocket. This is often the first source of funding before qualifying for Medicaid.
Family Support
Informal caregiving from family members is common, although it can be emotionally and financially draining. Some states offer compensation for family caregivers under Medicaid waiver programs.
Long-term care is an important but often overlooked part of retirement planning. Understanding what services may be needed and exploring funding options early can protect assets, ensure quality care, and reduce the emotional burden on loved ones.
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If you’re helping clients or preparing for your own future, consider speaking with a financial advisor, insurance professional, or elder law attorney to explore your options and build a solid plan.
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