Long-Term Care Insurance California Partnership Costs & Quotes
California Long-Term Care Planning
Planning ahead for future long term care needs is key to protecting your retirement assets. Many have had a first-hand experience with a loved one who needed long term care. These personal experiences stress the reality of the financial and emotional stress when someone needs long term care.
Long term care insurance also gives you the peace of mind, knowing you can cover the cost of long term care if you need it in the future. A long term care plan also protects your family from having to be caregivers. Plus it enables you to choose where you’ll receive any care needed in later years.
Who Needs Long Term Care Insurance
Those turning age 65 today have about a 70 percent chance of needing some type of long term care in their lifetime. One-third may never need long term care, but 20 percent will need it for longer than 5 years. The average length of time people need long term care services is 3 years.1
As of 2021, the average cost for 3 years of long term care in California is $438,000 ($146,000 per year). That cost is projected to be $791,076 ($263,692 per year) in 2041.2
And it’s not only seniors that need long term care. Over 35 percent of people currently receiving long term care services are between 18 and 64.3
Does Medicare Cover Long Term Care?
Medicare is the federal health insurance program for those over 65 and some younger people with disabilities. But Medicare does not pay for Custodial Care which makes up more than 90% of all long term care services.
An example of Custodial Care is when you need help with walking, bathing, eating, dressing or using the toilet. Custodial Care is what people need most when they have a physical impairment from a stroke. Or, due to cognitive impairment from dementia or Alzheimer’s disease. Don’t make the mistake of thinking Medicare covers long term care costs. It doesn’t.
When To Buy Long Term Care Insurance
Like most advisers, we recommend buying long term care insurance in your fifties or early sixties. The primary reasons are:
- The younger you are when you buy a policy, the lower the annual premiums.
- By the time you reach your mid sixties, you’re more likely to have a medical condition that makes you ineligible for a preferred-health discount, or makes it tough to get coverage at all.
- Even though you pay premiums a longer period of time, you’ll typically pay less overall than someone buying at an older age.
So it almost never pays to wait. And, while you’re waiting, you’re uninsured. If an accident or illness happens causing you to need long-term care, you’ll have to pay out of pocket.
California Long Term Care Insurance Options
There are two types of insurance in California to protect you from long-term care costs. Each type has its advantages depending on your situation. Our licensed professionals give you details so you can decide which is best for you.
Traditional Long Term Care Insurance
You pay an annual premium, and if you need long term care due to a cognitive or physical impairment, the policy pays for your care. Traditional LTC insurance policies make up about half of all long term care policies sold.
Hybrid Long Term Care Insurance
A hybrid long term care insurance policy combines the benefits of Life Insurance, or an Annuity, with long-term care benefits. You can buy a hybrid long term care insurance policy by paying a one-time lump sum premium, or over a set period of time.
If long term care is never needed, the policy works much like a traditional Life Insurance policy by paying a death benefit to your beneficiary when you die. And the death benefit is often similar to the amount paid for the policy. But if you need long-term care, the amount of money available can exceed the death benefit or long term care annuity value, often several times over. This gives you tremendous leverage of your premium dollars.
Cost of Long Term Care in California
The cost of long term care in California can help you decide how much LTC insurance you need. Here is the 2021 average cost for Nursing Facility, Assisted Living and Home Care in California.
Cost of Long-Term Care in California – 2021 (annual)
|Region||Nursing Home (private room)||Nursing Home (semi-private)||Assisted Living
|Home Health Aide (44 Hrs/wk)|
|Los Angeles Area||$135,233||$109,500||$63,000||$70,928|
|San Diego Area||$146,000||$112,603||$65,700||$77,678|
|San Francisco Area||$168,813||$138,791||$75,825||$85,800|
|San Jose Area||$187,063||$142,350||$72,000||$85,228|
|San Luis Obispo Area||$146,000||$120,450||$63,600||$85,800|
|Santa Cruz Area||$144,175||$127,750||$66,600||$84,084|
|Santa Maria Area||$187,975||$128,845||$63,600||$80,080|
California Partnership for Long Term Care
The California Partnership for Long Term Care (CPLTC) is a special California program combining private long term care insurance with special access to Medi-Cal. The California Partnership for Long Term Care was created to help you prepare for the possibility of needing nursing home care, assisted living care or home care.
A California Partnership for Long Term Care (Partnership) policy allows you to keep all, or part of your assets under the Medi-Cal program, if your long term care needs last longer than the benefits of your insurance policy. The California Partnership for Long Term Care is a California Department of Health program.
Note that Hybrid Long-Term Care Insurance options are not available under the California Partnership for Long-Term Care. Your LTC Specialist will explain the differences to help you decide which is best for your situation.
California Partnership for Long Term Care Reciprocity
Reciprocity applies if you purchase Partnership coverage in one state and later move to another state with a Partnership program. But, the California Partnership for Long Term Care does not have reciprocity with other states.
Here’s an example of how LTC Partnership reciprocity works. With reciprocity, you would not lose your Medicaid (Medi-Cal) asset protection if you move to a state with reciprocity. A State with reciprocity also recognizes accumulated asset protection for Medicaid qualification. This applies when you are already receiving benefits from your LTC Partnership Policy before moving to the new State.
How Much Does LTC Insurance Cost in California?
The average cost of long term care insurance in California depends on your age and health history at the time you buy the insurance. Generally, the younger and healthier you are the lower the cost. Your long term care insurance cost also depends on the following benefits you select:
- Benefit Period
- Daily Benefit
- Elimination Period (a deductible in days)
- Inflation Protection (if chosen)
Long Term Care Insurance Companies in California
California long term care insurance is available from several well respected insurance companies. We compare these companies to find you the best protection at the lowest cost. Here is a list of the best long term care insurance companies in California:
CA Long Term Care Insurance Quotes
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1. 2021 U.S. Department of Health and Human Services (www.longtermcare.acl.gov), site accessed 10/27/2022
2. Cost of Care Survey 2021 (Genworth.com), site accessed 10/27/2022
3. Family Caregiver Alliance (www.caregiver.org), site accessed 10/27/2022