The Dangers of Not Having Long-Term Care Insurance: What You Need to Know

Buying long-term care insurance is not a decision to take lightly, and neither is going without it. Without a policy, you and your family are exposed to real financial hardship. Here are key figures and risks to weigh when deciding whether you need long-term care insurance:

1. Rising cost of care: The Genworth 2020 Cost of Care Survey put the median cost of a private room in a nursing home at $105,850 per year and a home health aide at $54,912 per year. These costs have been rising steadily and are expected to keep increasing.
2. Limited Medicare coverage: According to the U.S. Department of Health and Human Services, Medicare covers only a portion of long-term care costs, focusing mainly on short-term skilled care. As Medicare.gov explains, Medicare doesn’t pay for long-term custodial care. That leaves a significant gap for many seniors, and long-term care insurance can fill it.
3. Depleting personal savings: The Employee Benefit Research Institute estimated that a 65-year-old couple retiring in 2022 would need between $285,000 and $325,000 to cover healthcare and long-term care expenses in retirement. Without long-term care insurance, you risk exhausting your savings to pay for care.
4. Relying on Medicaid: Medicaid does cover long-term care services, but eligibility is based on strict income and asset limits. Qualifying may mean spending down your own assets first, which can strain you and your family.

Going without long-term care insurance can lead to significant financial risk and fewer care options. Understanding these risks, and the numbers behind them, is essential when deciding whether to buy a policy.

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