By Brian Gordon, President, Gordon Associates.
Many of your clients may be surprised to learn that Medicare doesn’t cover long-term care. Once they recover from that surprise, they learn how expensive long-term care is and wonder how they’re going to pay for it. Here are some things you need to know in order to assist them:
Medicare
Medicare is designed for short-term recuperative services, usually in a rehabilitative or nursing home setting. The coverage for rehabilitation is different than that for a skilled nursing facility.
Medicare covers in-patient rehabilitation if a doctor certifies that they require intensive rehabilitation, continued medical supervision and coordinated care from doctors, other health care providers and therapists. Under original Medicare in 2025, after a person has met the $1,676 deductible, Medicare would cover the full cost for the first 60 days. After 60 days, they would have a copayment, and after 90 days the patient is responsible for the entire cost. (Coverage under Medicaid Advantage plans varies by company and service area.)
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After a qualifying three-day hospital admission, Medicare pays 100% of the first 20 days in a nursing home. Days 21-100 require a copay, which in 2026 is projected to be $214.50 per day. After that, the patient is responsible for all costs.
Medicaid
State-administered Medicaid programs cover long-term care, but the primary concerns are limited choices of facilities that accept Medicaid and having to meet spend-down requirements to qualify. Many people don’t realize just how little assets and income you are allowed to retain.
On the upside, Medicaid is available to anyone who qualifies for it.
Long-term care insurance
Long-term care insurance (LTCI) provides choices and allows families to make prudent decisions. It alleviates some of the financial burden and lets families provide care for a parent or loved one in a setting of their choosing.
Premiums can be expensive if you wait too long to obtain insurance, or health conditions are such that the insurance company considers you a poor risk.
Personal savings
With personal savings, the main question that needs to be asked is: Can the family take on $4,000 to $20,000 per month for care? A potential downside is that the individual will spend so much for their care that they will leave very little for their families to inherit.
Questions to ask
It is vital for your client to discuss with the family their intentions on how they prefer to receive care and how it should be funded.
For people hoping to qualify for Medicaid, what financial and eligibility rules should they be aware of? Each state has its own requirements and spend-down levels, so please check with an elder care attorney in your state.
How can individuals or families plan financially to avoid being caught off-guard by long-term care costs later in life? The client should again talk with their family so they understand what the plan is for care is and how they anticipate paying for it. Most families react to this issue rather than plan. You don’t want the family to make care decisions at the most emotional time.
Should you save for potential long-term care expense in the future, or buy LTCI to help cover some or large portion of the cost of care? Long-term care insurance can play a vital role for families when making long-term care planning decisions.
What are the different kinds of long-term care policies? We work with hybrid life, hybrid annuity, traditional LTCI and short-term care plans. These are not necessarily new but provide many options for clients. Health savings account (HSA) funds may be used to help fund LTCI premiums.
Does an employer offer group long-term care insurance as an option? Being able to purchase group insurance at a younger age may make the premiums more affordable.
If the client realizes that they haven’t planned adequately for long-term care, what’s the best next step to take – financially and legally – to protect the client and their family? Work with a financial adviser like yourself who can help them understand how self-funding may affect the family and/or estate plans. Most importantly, make sure they work with a reputable long-term care insurance specialist who can help them decide whether long-term care insurance, and what type of policy, would benefit them and their heirs.
Brian Gordon is president of Gordon Associates, with headquarters in suburban Chicago. Gordon Associates was founded in 1975 by Brian’s father, Murray Gordon, and is observing its 50th anniversary this year. Brian has over three decades of experience in LTCI. Contact him at galtci.com or 800- 533-6242.
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Tags: long term care, Medicaid, medical care, medical costs, medicare
