Is Long-Term Care Insurance Right for You?

Many seniors mistakenly believe that Medicare will cover most of their future health care costs. Unfortunately, Medicare coverage for long-term care is very limited. For example, should a Medicare recipient require skilled nursing home care after undergoing surgery, Medicare’s coverage will not exceed 100 days.

Long-term care (LTC) refers to custodial or personal care received by people who need assistance with activities of daily living, skilled nursing or skilled therapy. A person receiving long-term care usually needs assistance with bathing, dressing, eating, toileting, taking medications or even just getting around.

What does LTC insurance cover?

In California, private LTC insurance policies cover nursing home care, home health care (i.e. adult day care, personal care, and homemaker services), or both. Although certain LTC services depend on registered nurses or skilled professionals, most may be provided by family members and friends.

It is interesting to note that, on average, women live longer, are healthier and are the primary caretakers for not-as-healthy men. Perhaps that is why those most in need of LTC insurance are women who have outlived their spouses and need someone to assist with daily care needs.

When does coverage start?

LTC insurance policies do not usually commence coverage until identified care needs are apparent, and defined waiting periods have passed. In most policies, waiting periods range from 30 to 100 days. With a 30-day waiting period, assuming nursing home care costs $150 each day, your coverage will not start until you have already spent $4,500. With a 60-day waiting period, you must first spend $9,000.

Is LTC Insurance right for you?

The costs for individual policies usually reflect the insured person’s age and health, the benefits covered, and the agreed upon period through which insurance will continue to pay – for example three years, five years, or until the end-of-life. The younger you are when you purchase LTC insurance, the lower your monthly rates will be. But do not lose sight that the longer you pay, the more you’ll have spent for possible future care needs.

California’s insurance companies cannot cancel existing LTC policies unless the insured person has failed to pay scheduled premiums. However, the Department of Insurance may authorize insurers to increase charges for existing policies if the need for requested increases can be justified. In other words, as health care and nursing home expenses increase, so might your payments for existing policy premiums.

How Can You Learn More?

Some of the questions you’ll want to address:

  • Will your LTC insurance premiums remain affordable?
  • Can you put away savings for future care needs?
  • Will Medi-Cal’s spousal protections for nursing home care provide you with sufficient financial security?
  • Do you want to protect your net worth from LTC costs?

A consumer’s guide to LTC, Taking Care of Tomorrow, prepared by the California Department of Aging, is available at no cost online at: or by calling 1-800-434-0222. The 76-page guide assists people concerned about how to plan, provide and pay for long-term care. It includes an overview of long-term care issues, an explanation of payment options, and answers to frequently asked questions. Additionally, it suggests ways to decide whether insurance is right for you and, if so, guidelines on how to choose a plan that will best meet your LTC needs.