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The 1715 Podcast | Comprehensive Guide

Long-Term Care Planning: A Complete Guide for Treasure Coast Retirees

One of the most significant — and most overlooked — financial risks in retirement is the cost of long-term care. This guide explains what long-term care is, who needs it, how it’s paid for, and the planning options available to you, so you can make informed decisions before a health crisis forces your hand.

What You’ll Learn in This Guide

  • What long-term care actually means — and what it doesn’t
  • Who statistically needs care and for how long
  • Why Medicare covers far less than most people assume
  • The five main planning options, explained side by side
  • Florida-specific considerations for Treasure Coast families
  • How to start the planning conversation with your family
  • Frequently asked questions answered plainly

What Is Long-Term Care — and What Does It Actually Include?

Long-term care (LTC) refers to a range of services that help people live as independently and safely as possible when they can no longer perform everyday activities on their own due to aging, illness, or disability. The key distinction: long-term care is custodial care, not medical care. It’s about assistance with daily living — not treatment of a disease.

Professionals and insurers typically assess care needs using two frameworks:

Activities of Daily Living (ADLs)

Bathing, dressing, eating, continence, toileting, and transferring (moving from a bed to a chair, for example). Most long-term care insurance policies begin paying benefits when a person cannot perform two or more of these six activities independently.

Cognitive Impairment

A diagnosis of Alzheimer’s disease, dementia, or a similar condition that requires substantial supervision to protect the individual from harm also typically triggers long-term care benefits — even if the person can still physically perform ADLs.

Care can be provided in a variety of settings: in your own home (home health aides), in an assisted living facility, in a memory care unit, or in a skilled nursing facility (nursing home). The setting matters greatly for both quality of life and cost.

Who Needs Long-Term Care — and for How Long?

According to the U.S. Department of Health and Human Services, roughly 70% of people turning 65 today will need some form of long-term care during their remaining years. That’s not a fringe risk — it’s a majority outcome. The question is not so much if as when, what kind, and for how long.

Average care durations vary by type and individual circumstance, but general benchmarks suggest:

  • About one-third of people who need care require it for less than two years
  • Approximately 20% need care for more than five years
  • Women, on average, need care for longer periods than men — largely because they live longer
  • Alzheimer’s disease alone affects more than 6 million Americans, and the average time from diagnosis to death is 4 to 8 years

On the Treasure Coast — in Martin, St. Lucie, and Indian River Counties — Florida’s retirement-heavy population means local care facilities and home health agencies are plentiful, but demand is high and costs continue to rise. Planning with Florida’s market in mind is important.

The Real Cost of Care in Florida — and Why It Matters for Your Plan

Long-term care is expensive — and Florida is no exception to national trends of rising costs. Based on widely cited industry surveys, here are approximate annual costs you might expect in Florida:

Home Health Aide (44 hours/week)

Approximately $55,000–$65,000 per year in Florida

Assisted Living Facility (private room)

Approximately $42,000–$56,000 per year in Florida

Skilled Nursing Facility (semi-private room)

Approximately $95,000–$115,000 per year in Florida

Memory Care Unit

Approximately $60,000–$90,000 per year in Florida, often more in South Florida markets

These figures are estimates only and vary by provider, location, and level of care needed. What they illustrate is that even a two-year care event could represent $100,000–$200,000 or more in expenses — and a longer event could be far more significant.

Equally important: these costs are almost never fully covered by Medicare. That misconception alone is responsible for a great deal of financial hardship in retirement.

What Medicare Covers (and What It Doesn’t) — The Most Common Misconception in Retirement

Many people approaching retirement believe that Medicare will cover long-term care needs. This is one of the most consequential misunderstandings in personal finance. Here is what Medicare actually covers regarding long-term care:

Medicare’s Skilled Nursing Facility Coverage (Part A)

  • Days 1–20: Medicare covers 100% — but only after a qualifying 3-day hospital stay
  • Days 21–100: You pay a daily coinsurance amount (over $190/day in 2024)
  • Day 101 and beyond: Medicare pays nothing
  • This coverage is for skilled rehabilitation care — not indefinite custodial care

Medicare does not pay for custodial care — meaning help with bathing, dressing, eating, or supervision for dementia — if that is the primary need. Once you no longer require skilled medical or rehabilitative services, Medicare coverage ends, regardless of whether you still need daily assistance.

Medicaid is different. Medicaid (known as Florida Medicaid in our state) does cover long-term custodial care — but it is a means-tested program. To qualify, your income and assets must fall below certain thresholds. For many middle-income retirees, reaching Medicaid eligibility means spending down most of their assets first. Florida’s rules are complex, and planning around Medicaid requires careful, licensed guidance well in advance.

The gap between what Medicare covers and what long-term care actually costs is precisely why proactive planning — not assumption — is essential.

Five Planning Options for Long-Term Care — Explained Side by Side

There is no single “right” strategy for long-term care planning. The best approach depends on your health, assets, family situation, and risk tolerance. Here are the five primary options most financial planners discuss:

1. Self-Funding (Self-Insurance)

You plan to pay for care from your own savings, investments, or home equity if needed. This is a legitimate strategy for people with substantial assets — typically those with $2 million or more in liquid retirement assets — who can absorb a significant care event without depleting their legacy or spousal income.

Key consideration: The risk is a catastrophic or very long-duration care event. A spouse who lives at home while the other needs nursing home care can face severe financial strain if assets are consumed rapidly.

2. Traditional Long-Term Care Insurance (LTCI)

Standalone LTCI policies pay a daily or monthly benefit — typically $150–$300 or more per day — when you can no longer perform ADLs or have a cognitive impairment. You select a benefit amount, benefit period (often 2, 3, or 5 years), elimination period (how long you wait before benefits begin), and optional inflation protection.

Key consideration: Premiums can increase over time, and many traditional carriers have exited the market or raised rates significantly over the past two decades. That said, policies purchased with inflation protection in your 50s or early 60s can provide meaningful coverage at a fraction of the cost of care. Health underwriting applies — you must qualify medically.

3. Hybrid (Linked-Benefit) Policies

Hybrid policies combine life insurance or an annuity with a long-term care rider. If you need care, the policy pays out a long-term care benefit. If you die without using the benefit, your heirs receive a death benefit. If you change your mind, many hybrid policies offer a return-of-premium feature.

Key consideration: Hybrid policies are typically funded with a single premium or limited-pay structure, which means no ongoing premium increases. They’ve become popular as an alternative to “use it or lose it” concerns with traditional LTCI. However, the long-term care benefit pool is often smaller relative to what a traditional policy might provide for the same premium outlay.

4. Annuities with Long-Term Care Riders

Some annuity products offer optional long-term care or “care doubler” riders that increase your income or provide an acceleration of benefits if you need qualifying care. These are not the same as standalone LTCI policies, and the benefits are typically more limited — but they can be a useful component of a broader strategy.

Key consideration: These riders vary widely by carrier. Understanding exactly what triggers the benefit, how it’s calculated, and for how long it pays is critical before relying on this approach.

5. Medicaid Planning (Asset Protection Strategies)

For individuals who may eventually need to qualify for Medicaid’s long-term care coverage, there are legal planning strategies — often involving trusts, gift planning, and asset restructuring — designed to protect a portion of assets while moving toward eligibility. In Florida, the “look-back period” for most asset transfers is five years, meaning planning needs to begin well before care is needed.

Key consideration: Medicaid planning is complex and state-specific. Florida Elder Law attorneys specialize in this area. It requires careful coordination with financial planning and estate planning, and it may not be appropriate for everyone.

Florida-Specific Considerations for Treasure Coast Residents

Florida has several characteristics that make long-term care planning both more accessible and more nuanced:

  • No state income tax: Florida’s tax-friendly environment can free up more resources for premium payments or self-funding reserves during working and retirement years.
  • Florida Medicaid rules: Florida has a “spousal protection” provision that allows a community spouse (the one not in a nursing home) to retain a portion of the couple’s assets and a minimum monthly income. These rules are updated regularly and require professional guidance.
  • Florida Partnership Program: Florida participates in the Long-Term Care Partnership Program, which allows purchasers of qualified LTCI policies to protect assets dollar-for-dollar equal to the benefits they receive from the policy if they later apply for Medicaid.
  • Homestead protection: Florida’s homestead laws offer significant creditor protection for your primary residence, which has implications for Medicaid estate recovery and asset protection planning.
  • Active market of care providers: The Treasure Coast — Stuart,

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