Free Guide · Long-Term Care
The Long-Term Care Planning Brief
70% will need it. Medicare doesn't cover it. Here's how to plan.
Long-term care is the most expensive blind spot in most retirement plans. Medicare doesn't cover extended care. Medicaid only kicks in after you've spent down your assets. The cost of waiting to plan is enormous — both in dollars and in family stress. This brief walks through the decisions.
What's inside (10 pages)
- Why 70% will need long-term care — and what it costs ($63K-$108K/yr in MI)
- Traditional LTC vs Hybrid (Asset-Based) policy comparison
- Self-insure vs insure: when each makes sense
- Medicaid planning fundamentals + Michigan rules
- The when-to-buy window (and why it closes faster than you think)
- Inflation riders and benefit period selection
- The family conversation guide
Who it's for
Adults 55-70 with $500K-$3M in retirement assets. Also for adult children planning for aging parents.
What you'll learn
The numbers most people never see coming
About seventy percent of people who reach 65 will need some long term care, for an average of three years, and four in ten need five years or more. In Michigan a nursing home runs about one hundred thousand dollars a year, and home health or assisted living sixty to sixty five thousand. Medicare pays for one hundred days of skilled care after a hospital stay and nothing for ongoing care. Medicaid starts when countable assets are down to about two thousand dollars.
Traditional insurance: most benefit per dollar, with two catches
A standalone policy gives the most care per premium dollar. Premiums can rise, and increases of twenty to fifty percent over the life of a policy have happened. And if you never need care, the premiums are gone. It fits healthy people in their late fifties with strong cash flow who are comfortable with use it or lose it.
Hybrid insurance: certainty, at a price
Life insurance with a long term care rider. Premiums are guaranteed and never rise. If care is never needed, there is a death benefit. The trade is less care benefit per dollar than traditional. It has become the popular choice for households 55 to 70 who want to know exactly what they are paying.
Self insuring and Medicaid planning
Self insuring takes substantial liquid assets, one and a half million at minimum and three million to be comfortable, set aside specifically for care, with the risk that one long event drains the surviving spouse. Medicaid planning is the conversation when insurance is not an option: a five year look back on transfers, spend down to qualify, spousal protections, and an elder law attorney, because Michigan's rules are specific.
The window is narrower than it looks
The mid fifties to mid sixties are the sweet spot, when premiums are affordable and most people can pass underwriting. Every year of delay raises the premium and lowers the odds of qualifying. By seventy, many are declined outright. Waiting until you need it means you cannot get it.
Two design choices that decide whether the policy works
An inflation rider, three or five percent compound, because two hundred dollars a day today can be several times that in thirty years. And a benefit period, three years, five years, or lifetime, weighed against what your savings could absorb. A ninety day elimination period is standard; a longer one lowers the premium and you self pay in the meantime.
Common questions
Does Medicare pay for long term care?
No. It covers up to one hundred days of skilled care after a hospital stay. Ongoing help with daily living is not covered, by Medicare or by a Medicare Supplement.
What is the best age to buy long term care insurance?
The mid fifties to mid sixties. Premiums are still reasonable and most people can qualify. Each year after that costs more and gets harder to get.
Traditional or hybrid long term care insurance?
Traditional gives more care per dollar with premiums that can rise and nothing back if unused. Hybrid locks the premium and pays a death benefit if care is never needed. Certainty costs something.
When does Medicaid pay for a nursing home?
After countable assets are spent down to about two thousand dollars, with a five year look back on any transfers. A spouse at home keeps protected amounts. An elder law attorney should handle it.
Educational content only. Not financial, tax, or legal advice. Always consult a licensed professional before acting on the information in this guide.