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How Much Do You Really Know About Long-Term Care?

How Much Do You Really Know About Long-Term Care?
Posted on Wednesday, July 20, 2022 by Allstate Benefits

Whether it’s the live-for-now mentality, the stress of current financial situations, or the denial of the realities of aging, we are not prepared. 

Enjoy this featured content from our Pinnacle Partner™ Allstate Benefits. 


We’re all growing older.  

In fact, every day until 2030, 10,000 Baby Boomers will turn 65. Why is it that so few Americans plan for the costs associated with aging?  

The average American has less than $100,000 saved for retirement, and 21% of Americans have no retirement savings at all. We’re also living longer (life expectancy in the U.S. is roughly 79 years, according to the CDC). With these statistics, chances are you or someone you know is faced with supplementing income or caregiving for a loved one with ongoing health issues. 

While many people feel long-term care coverage is something they will never need, the truth is that 7 out of 10 Americans will require assistance at some point. Did you know that the average stay in a long-term care facility is over two years, and even longer for women? Plus, 20% of individuals will require care for longer than five years 

There are common misconceptions about long-term care, or LTC, coverage: 

  • I won’t need it. No one can predict the future; and as lifespans increase, so does the need for long-term health solutions.  
  • My family can take care of me. Retiring early to care for an aging relative can negatively impact the income, health benefits, and retirement funds of a caregiver and their other dependents.  
  • I’ll be able to pay for my long-term care out-of-pocket. Remember that average amount of $100,000 saved for retirement? The average annual cost for a private room in a nursing home is $104,408. 
  • Government aid will help cover the costs. Medicare coverage of long-term care costs maxes out at 100 days (for inpatient facility care), and one must have extremely limited financial resources to qualify for Medicaid. Additionally, most LTC facilities have limited beds available for Medicare patients.  

While there are many options outside of nursing home care (homemaker services, home health aides, adult day healthcare, assisted living), many of these are expensive and out of reach for the average family.  

Long-term care coverage is difficult to find except on an individual basis, which can be expensive and requires good health to qualify. Some carriers won’t issue policies until age 40, which is a catch-22 because premiums are higher and health conditions may be changing around this age.  

So, what options are there for employees to find coverage for extended medical attention? 

The state of Washington acted on the LTC crisis in 2019. The Washington Cares Act was passed, becoming the first state program to pay benefits for LTC services. Funded by a mandatory payroll tax on all W2 employees in the state, the program provides LTC benefits of $36,500 per lifetime. It also allowed a window for employees to qualify for exemption if they could provide proof of private LTC insurance. In essence, this program forced employees to choose between a state plan or a private plan. 

The Washington Cares Act created LTC awareness, and other states are considering similar programs.  

What do employees need to know about long-term care coverage? 

Now more than ever, it’s important to educate yourself about the products available to you and your family. Does your employer offer a group voluntary product that contains an LTC component, such as life insurance with LTC?  

If so, enrolling in it during your annual enrollment period may provide coverage on a guaranteed-issue basis (no medical underwriting required) and lower premiums. Coverage amounts, length of coverage, and waiting or elimination periods can be compared, and you can make an educated choice about what best fits your situation. If your employer doesn’t offer this, ask them why not! 

Sadly, one fall can change everything overnight in any elderly loved one’s life. While many argue that they can’t afford long-term care, we would argue, can you afford not to have it?