Education Center

Long-term care includes a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with basic personal tasks of everyday life.

• ✓Activities of Daily Living (ADLs): bathing, dressing, eating, toileting, transferring, continence
• ✓Instrumental Activities: cooking, cleaning, managing finances, transportation
• ✓Cognitive support for conditions like dementia or Alzheimer's

Long-term care can be provided in various settings, each with different costs and levels of care. Understanding your options helps you plan appropriately.

• ✓Home Care: In-home assistance with daily activities ($25-$35/hour)
• ✓Adult Day Care: Daytime supervision and activities ($75-$100/day)
• ✓Assisted Living: Residential care with some independence ($4,000-$6,000/month)
• ✓Nursing Home: 24/7 skilled nursing care ($8,000-$12,000/month)

Long-term care costs vary significantly by location and type of care. These costs are rising faster than inflation and can quickly deplete retirement savings.

• ✓National average nursing home cost: $108,405 per year
• ✓Average length of stay: 2.5 years for men, 3.7 years for women
• ✓Total lifetime LTC costs can range from $200,000 to $400,000+
• ✓Costs increase 3-5% annually, outpacing general inflation

Many people mistakenly believe Medicare will cover their long-term care needs. Understanding Medicare's limitations is crucial for proper planning.

• ✓Medicare only covers skilled nursing for up to 100 days after hospitalization
• ✓No coverage for custodial care (help with daily activities)
• ✓Home health coverage is limited to skilled medical care only
• ✓No coverage for assisted living or adult day care

Medicaid can pay for long-term care, but only after you've spent down most countable assets. That can be hard on a family's finances.

• ✓Countable assets generally must be at or below $2,000 for an individual (Texas)
• ✓Home may be exempt while you or your spouse live there, but may be subject to estate recovery
• ✓5-year look-back period for asset transfers
• ✓Income limits are set each year by Texas HHS

Educational only. Not affiliated with Medicaid or any government agency.

Understanding the likelihood and duration of needing long-term care helps put the importance of planning into perspective.

• ✓70% of people over 65 will need some form of long-term care
• ✓40% will need nursing home care at some point
• ✓Women are more likely to need care and for longer periods

Hybrid LTC annuities create a pool of long-term care benefits that may be larger than your premium, which can reduce how much of your other savings goes to care.

Key Benefits:

• ✓Benefits may exceed premium (see illustration)
• ✓Helps pay for qualified care at home or in a facility
• ✓Reduces the need to draw down other retirement savings
• ✓Ask about Texas Partnership-qualified options

Example:

Hypothetical: depending on age, health, and product, a premium might create an LTC benefit pool larger than the premium. Your carrier illustration shows real numbers.

Under the Pension Protection Act, qualified LTC benefits from properly structured annuity contracts are generally received income-tax-free under federal law.

Key Benefits:

• ✓Favorable treatment for qualified LTC expenses
• ✓Pension Protection Act rules
• ✓Consult your tax advisor

Many hybrid policies pay a death benefit or keep a contract value if you never need care, per contract terms.

Key Benefits:

• ✓Income or death benefit options (per contract)
• ✓Death benefit to heirs
• ✓No 'use it or lose it' premium structure
• ✓Access to contract value per policy terms

Hybrid LTC annuities typically feature streamlined underwriting, making coverage accessible to more people than traditional LTC insurance.

Key Benefits:

• ✓Simplified health questionnaires vs. medical exams
• ✓Often more lenient health requirements
• ✓Often faster approval
• ✓May be available with mild health conditions

Example:

Someone with controlled diabetes or high blood pressure may qualify for hybrid coverage but be declined for traditional LTC insurance.