Long-term care (LTC) insurance is specialized coverage that helps pay for extended care services not typically included in standard health insurance, Medicare, or Medicaid. These services are crucial when individuals need assistance due to chronic illness, disability, or the natural effects of aging. Long term care insurance can provide financial security and peace of mind for you and your family.
What Is Long-Term Care Insurance?
Long-term care provides funds for those needing help with daily activities over an extended period (usually more than 90 days). You would become eligible for a claim through one of two criteria:
- Assistance with activities of daily living (ADLs) like bathing, dressing, eating, walking, transferring and using the toilet.
- Needing help to look after oneself due to cognitive impairments, including Alzheimer's or dementia.
Evolution of Long-Term Care Insurance Policies
Modern long term care insurance policies are far more flexible than older versions, which were limited to nursing home coverage. Today's options include:
- Home-based professional care, such as aides or nurses.
- Community settings like adult day care.
This adaptability helps maintain independence while covering costs effectively. Most contracts require the care to be from licensed medical providers, but there are also some options that include some benefits for unlicensed family care.
Why Consider Long Term Care Insurance?
Long-term care insurance is often overlooked in benefits packages, yet it offers valuable tax benefits (for employees and employers) and protection against rising care costs. Premiums are tax-deductible under certain conditions, and benefits are generally income tax-free. With professionals working longer and beyond age 65, planning for potential care needs is more important than ever. According to the U.S. Department of Health and Human Services, someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years.
Gender plays a role too: Women tend to need care for longer periods (an average of 3.7 years) compared to men (2.2 years), and approximately 51% of women age 65 and older will require paid long-term care, versus 39% of men.
Average Costs of Long-Term Care: National and Florida-Specific Insights
Long-term care can be expensive, underscoring the value of long term care insurance.
Nationally, according to Genworth's 2025 Cost of Care Survey:
- Annual median cost for an assisted living facility: $70,800
- Annual median cost for a private room in a nursing home: $127,750
In Florida, costs are slightly higher:
- Annual cost for a private room in a nursing home: $138,700
- Annual cost for a semi-private room: $124,100
What Does Medicare Cover for Long-Term Care?
Many assume Medicare handles long-term care, but coverage is limited. Medicare does not cover custodial (non-medical) long-term care, such as help with daily activities in a nursing home or at home. Instead, it focuses on short-term skilled care:
Skilled Nursing Facility Care:
Covered for up to 100 days after a 3-day hospital stay, with the first 20 days fully paid and days 21-100 requiring a copay (not specified as long-term care).
Hospice:
Does cover end-of-life care for terminal individuals with six months or less life expectancy. Palliative (comfort) care rather than curative treatment.
Home Health Care:
Only for medically necessary part-time or intermittent skilled nursing care such as wound care or injections resulting from an acute injury or illness. Specifically excludes coverage for Activities of Daily Living and requires the recipient to meet the definition of homebound.
Without medical necessity, individuals pay 100% out-of-pocket.
How to Qualify for Medicaid Long-Term Care (using Florida as an example)
Medicaid can cover long-term care for eligible low-income individuals, but qualification is strict. To qualify for Nursing Home Medicaid or Home and Community Based Services:
- Age/Disability: Must be 65+ or disabled and eligible for Medicaid.
- Income Limit (2026): For a single applicant, under $2,982 per month.
- Asset Limit: Under $2,000 for singles (excludes home if spouse lives there, vehicle, etc.). There is a 5 year look back period where Medicaid will expect reimbursement for any assets transferred to meet this criteria.
- Medical Need: Require a nursing home level of care, assessed by a provider.
Medicaid planning is a complex legal and tax area, where it is strongly recommended that you seek legal counsel from Elder Law focused attorneys.
Options to Obtain Long Term Care Insurance
There are two main ways to obtain long term care insurance:
- Individually (with or without a spouse) has the most robust medical underwriting of any insurance product. You should expect a Medical Exam, Medical Record Review and 30-45 minute cognitive telephone interview at a minimum. It is very common to have follow up questions on any pre-existing health conditions. You can be declined or have your cost increased "rated up" due to pre-existing conditions.
- As an executive benefit package where it is guaranteed issue. A group of 6 executives being paid for by the employer usually means there are no medical requirements beyond the employer confirming they are actively at work on a full time basis. There are options for employer-paid benefits as well as employee-paid.
This is where we see the largest potential tax advantage, even for smaller employers. Depending on the situation it is possible for the employer to deduct the full cost of the benefit, the employee only paying the taxes on the cost of the employer paid life insurance (if any) and the benefits remain income tax free.
Get Your Free Long Term Care & Executive Benefits Review
Utilizing Long Term Care is just one of the tools in creating a comprehensive benefits plan for your executives. Find out how a tailored long term care insurance plan can strengthen your executive retention strategy and protect key talent.