Long Term Care Insurance Massachusetts Costs and Companies
Massachusetts Long Term Care Insurance
Planning ahead for future long term care needs is a key part of retirement planning. Many people have had first-hand experience with a loved one who needed long term care. These experiences underscore the reality of the financial and emotional stress when someone needs long term care.
Long term care insurance can protect your retirement assets. Plus it 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. And it enables you to choose where you’ll receive any care needed in later years.
Who Needs Long Term Care Insurance
Someone turning age 65 today has about a 70 percent chance of needing some type of long term care during their lifetime. While one-third may never need long term care, 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
In Massachusetts, the average cost for 3 years of long term care is $487,275 ($162,425 per year) at 2021 rates. That cost is projected to be $880,074 ($293,358 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 people over 65 and for some younger people with disabilities. But Medicare does not pay for most long term care services. Specifically, Medicare does not pay for custodial care which makes up more than 90% of long term care.
An example of custodial care is when someone needs help with walking, bathing, eating, dressing and using the toilet. Custodial care is also 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 for this recommendation 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’ll have to 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.
Massachusetts Long Term Care Insurance Options
There are two types of insurance in Massachusetts that pay for long term care costs. And each type of policy has its specific advantages. One of our licensed professionals can provide more details to help you 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. It would then pay 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, offering tremendous leverage of premium dollars.
Massachusetts Long Term Care Costs
This Massachusetts long term care cost data can help you decide how much insurance you need. And it compares nursing facility, assisted living and home care costs. Here is the 2021 cost of long term care in the State of Massachusetts.2
Massachusetts Long Term Care Costs – 2021 (annual)
|Region||Nursing Home (private room)||Nursing Home (semi-private room)||Assisted Living (private room)||Home Health Aide (44 hours/wk)|
Massachusetts Long Term Care Insurance Partnership
Many states have Long Term Care Partnership Programs. These programs combine private long term care insurance coverage with special access to Medicaid. Long Term Care Partnership Programs allow LTCi Partnership policy holders the ability to shield a portion, or all of their assets, while still being able to qualify for Medicaid. This special Medicaid qualification would be in case their long term care needs extend beyond the amount payable by their private long term care insurance policy.
Currently, Massachusetts does not have a long term care partnership program. Although Massachusetts does not have an LTC partnership program, there are Long-Term Care MassHealth Exemptions.
MassHealth Long Term Care Exemptions
If you have MassHealth and long term-care insurance, you may be exempt from some MassHealth eligibility and recovery rules. These exemption rules determine if you will have to sell your home to become eligible for MassHealth benefits. They also determine whether you or your estate will have to pay back MassHealth for the long term care costs it paid for your care.
To qualify for the MassHealth Exemptions, your long term care insurance policy must provide certain benefits. For example, when you enter a nursing home, your policy must:
- Cover at least 730 days of nursing home care;
- Pay no less than $125 a day for nursing home care; and
- Have an elimination period shorter than 365 days.
To qualify for these MassHealth long term care exemptions, a Massachusetts long term care insurance policy must also meet certain standards set by the Division of Insurance. For information on Massachusetts long term care insurance regulations see 211 CMR 65.05. Our Massachusetts long term care insurance agents can further explain the details of these rules.
How Much Does LTC Insurance Cost In Massachusetts?
How much does long term care insurance cost in Massachusetts? The answer: It depends on your age and health history at the time you buy insurance. In general, the younger and healthier you are the lower the premium. The cost will also depend 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 Massachusetts
There are several well respected long term care insurance companies in Massachusetts. 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 Massachusetts:
Compare Long Term Care Insurance Costs and Options
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Compare Massachusetts Long Term Care Insurance Companies, Quotes and Policy Costs. We’ll help you compare the companies and plan options side by side. And we also provide comparisons to the AARP LTC insurance offering.
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1. 2022 U.S. Department of Health and Human Services (www.longtermcare.acl.gov), site accessed 03/02/2022
2. Cost of Care Survey 2021 (Genworth.com), site accessed 03/02/2022
3. Family Caregiver Alliance (www.caregiver.org), site accessed 03/02/2022