Have you been considering long-term care insurance but heard it’s not worth the money? Many people dismiss it because of past issues with rising premiums and complicated policies. But with new data and updated policies, it’s time to take another look.
A recent industry report revealed important updates about the future of long-term care insurance. It highlighted how past mistakes led to financial struggles for policyholders, and how companies are now using better data to set fairer pricing. If you’ve ever wondered whether long-term care insurance is right for you, these updates will help you make a more informed decision.
The History of Long-Term Care Insurance: Why Premiums Have Been Unstable
Long-term care insurance has been around for over 40 years, but the industry has had its fair share of problems. In the early days, insurance companies underestimated how much care would cost and how many people would need to file claims. Because of this, they had to raise premiums—sometimes by a lot.
Traditional long-term care insurance is like auto or home insurance: if you never use it, you don’t get anything back. Many policyholders had to cancel their policies when costs became too high, losing all the money they had paid over the years.
Now, companies like Genworth—one of the biggest long-term care providers—have over 40 years of data to improve their pricing models. So instead of sudden price hikes, future policies should be more stable and predictable.
The Medicare and Medicaid Misconception: What They Actually Cover
A common mistake people make is assuming that Medicare will cover their long-term care costs. It does not. Medicare only covers the first 100 days in a skilled nursing facility, and after that, you’re on your own.
Medicaid does cover long-term care, but it comes at a high price. You must spend down almost all your assets before Medicaid will step in. That could mean selling your home in some cases, draining your savings, and giving up control of your finances. And once you qualify, you’ll likely end up in a government-run facility—not exactly the quality of care most people hope for.
If you want to maintain control over your care options, you need to have a plan in place that doesn’t rely on Medicare or Medicaid.
The Growing Demand for Long-Term Care: What the Numbers Say
As of 2025, there are about 76 million baby boomers between the ages of 61 and 79. Experts estimate that at least half of them—around 38 million people—will need long-term care at some point in their lives.
Here’s what Genworth reports about the average cost of care:
| Type of Care | Annual Cost (2023) |
| In-home care (40 hrs/week) | $75,000 |
| Skilled nursing (private room) | $110,000 |
For those diagnosed with Alzheimer’s or other long-term conditions, total costs can exceed $1 million! Without a financial plan in place, families may have to come up with this money out of pocket.
Most long-term care claims start with in-home care. While this may seem like the most affordable option, costs add up quickly.
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- In-home care (40 hours per week): $75,000 per year
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- Skilled nursing facility (private room): $110,000 per year
The best time to start planning for long-term care insurance is in your mid-50s. While you can still get coverage in your 60s and early 70s, your benefits will be lower, and your premiums will be higher.
The real challenge is that 90% of baby boomers have no long-term care coverage at all. That means millions of families will be left scrambling to find a way to pay for care when they need it.
The Coverage Gap: Why Millions of Baby Boomers Are Unprepared
If 76 million baby boomers are aging, and 38 million will need care, but only 10% have coverage, that leaves a massive gap. Even if 20% of retirees can afford to self-fund their care, that still leaves around 27 million people without a plan.
Many of these people will turn to:
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- Family members who may not be financially or physically able to provide care
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- Government programs, which are already overburdened and underfunded
The demand for care is rising, but the resources available are limited. This is why having a plan in place before you need care is so important.
Will the System Be Able to Handle the Demand?
The first wave of baby boomers will start turning 80 years old in 2026, and from that point on, about 10,000 people per day will reach their 80s for the next 20 years. This means an overwhelming demand for:
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- Skilled nursing facilities
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- In-home caregivers
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- Assisted living centers
However, the supply of care providers is not increasing at the same rate. With fewer workers and more demand, costs will continue to rise.
Traditional vs. Asset-Based Long-Term Care Insurance: What’s Changed?
Many people hesitate to buy long-term care insurance because they worry about:
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- Rising premiums that make the policy unaffordable
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- Paying for something they may never use
Traditional policies operate like auto insurance—you pay, but if you never file a claim, you don’t get anything back.
But Asset-Based Long-Term Care Insurance is different:
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- Premiums are guaranteed not to increase
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- You can use a lump sum to fund the policy
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- If you never need care, you can get the money back, or your money can go to your beneficiaries
This means you no longer face a “use-it-or-lose-it” situation.
Where to Learn More: Free Long-Term Care Insurance Resources
If you’re still unsure about long-term care insurance, there are free resources available to help answer your questions. These include:
Having the right information can help you make the best decision for your future.
Final Thoughts: Why Long-Term Care Insurance Is Essential
Even financial advisors who dislike annuities agree on the importance of long-term care insurance. The reality is that without a plan, you could end up bankrupting yourself or relying on government-run facilities that don’t provide the level of care you deserve.
The difference between a private-pay facility and a Medicaid-funded one is like staying in a Hilton versus a rundown motel. The choice is clear: prepare now, or risk losing control over the care and dignity you deserve.
If you want to explore your options, schedule a call using my online calendar. A little planning now can make all the difference in the years ahead.
All the best,
Marty Becker
Podcast Episode 65: Long-Term Care Insurance Updates For 2025
Download Episode 65: Long-Term Care Insurance Updates For 2025 on Apple Podcast