Someone turning 65 today has almost a 70% chance of needing some long-term care, and Medicare doesn’t pay for most of it. A private nursing home room had a 2025 national median of $129,575 a year, and assisted living $74,400. Long-term care planning means deciding, while you’re healthy, how that bill would be paid: from savings, from insurance or a hybrid policy, or through Medicaid if you qualify. A fee-only planner can build that plan as part of a one-time plan, a median $2,000, without being paid to sell you a policy.
How likely, and for how long
For someone turning 65, averages across all types of care
Source: Administration for Community Living, LongTermCare.gov
Most care is help with daily living at home, from family or paid aides. Fewer people need years in a nursing home, but those who do face the largest bills. The plan has to cover the likely case and the expensive one. Our guide to advisors for aging parents has the full CareScout cost table, from adult day care to a private nursing home room.
What Medicare and Medicaid pay
Medicare pays for short recovery stays, not ongoing care. It covers skilled nursing facility care only after a hospital stay of at least 3 days in a row as an inpatient, and only up to 100 days per benefit period. In 2026 you pay nothing for days 1 to 20 after the $1,736 deductible, $217 a day for days 21 to 100, and everything after. Medicare doesn’t pay for custodial care.
Medicaid pays for care, after most savings are spent. You have to qualify on income and assets, and states set many of the rules. The federal figures for 2026:
| 2026 Medicaid figure | Amount |
|---|---|
| Countable assets, single person (SSI standard many states use) | $2,000 |
| Assets protected for a spouse who stays at home | $32,532 to $162,660, depending on the state |
| Home equity limit for the person applying | $752,000, or up to $1,130,000 where the state chooses |
| Look-back for gifts and transfers | 60 months |
A transfer for less than its value in the 60 months before applying can delay coverage. After death, states must seek repayment from the estates of people 55 and older for nursing home and home care costs, though not while a surviving spouse is alive or there’s a child under 21, or a blind or disabled child. Medicaid planning is legal work, and an elder law attorney should do it.
Washington State has its own program. WA Cares Fund collects 0.58% of workers’ wages, and since July 1, 2026, people who meet its contribution and care requirements can use up to $36,500 in care, rising with inflation. It helps, but it covers months, not years.
Ways to pay
| Approach | How it works | What to weigh |
|---|---|---|
| Pay from savings | Set aside part of your portfolio, or the house, for care | Works if your assets are large enough to cover a long stay and still provide for a spouse |
| Traditional long-term care insurance | Pays a daily or monthly benefit for care, after a waiting period | Must pass health underwriting; ask whether premiums can rise |
| Hybrid life or annuity policy with a care benefit | Pays for care if you need it, a death benefit if you don’t | Usually a large up-front premium; compare it with simply saving the money |
| Partnership policy | A state-approved insurance policy; assets equal to the benefits paid are ignored if you later apply for Medicaid | Ask whether your state runs a partnership program |
| Medicaid | Pays once income and assets fall below the limits | Limited choice of facility; estate recovery after death |
For most households the answer is a mix: savings for the likely case, insurance or a hybrid for the expensive one, and a plan for a spouse’s income if one of you needs care first.
The tax rules for 2026
Premiums for a tax-qualified long-term care policy count as medical expenses, up to a limit set by age:
| Age at the end of 2026 | Premium you can count |
|---|---|
| 40 or under | $500 |
| 41 to 50 | $930 |
| 51 to 60 | $1,860 |
| 61 to 70 | $4,960 |
| Over 70 | $6,200 |
You can pay those premiums tax-free from a health savings account, up to the same limits. See our guide to HSA investing and the HSA entry. Benefits from a qualified policy that pays a set daily amount are generally tax-free up to $430 a day in 2026.
Common mistakes
- Assuming Medicare will pay. It covers recovery, not long-term care.
- Waiting too long to look at insurance. Policies are underwritten on your health, and a diagnosis can rule you out.
- Giving the house or savings to children shortly before care is needed, inside the 60-month look-back.
- Buying more policy than you need, or a hybrid when the same money saved would do.
- Planning only for the person who needs care. The spouse at home still needs income for what may be many more years.
- No power of attorney. Someone has to sign for you once you can’t. See power of attorney and setting up an estate plan.
Questions to ask a planner
- How many years of care at local prices could we pay for, at home and in a facility?
- What happens to my spouse’s income if I need care first?
- Should we insure, self-fund or combine the two?
- If you recommend a policy, are you paid anything when I buy it?
- When should we bring in an elder law attorney?
The fourth question matters most. Long-term care and annuity products often pay the seller a commission. A fee-only planner is paid only by you, so they can tell you when not to buy one.
When a fee-only advisor is worth it, and what it costs
A planner earns the fee when you’re deciding whether to buy a policy, when your savings are somewhere in the middle (too much to qualify for Medicaid soon, not enough to shrug off years of care), or when one spouse has a diagnosis.
| If you want | Option | Typical cost (US median) |
|---|---|---|
| A second opinion on a policy you’ve been quoted | Hourly | $300 an hour |
| A care funding plan inside a full retirement plan | One-time plan | $2,000 |
| Ongoing planning as health and prices change | Ongoing planning fee | $4,500 a year |
These are prices fee-only firms publish on their own websites, from the Wellspent fee report. See what a one-time plan costs, and our guide to a financial advisor for retirement for the income plan around it.
Where to look
In the public graph, start with the retirement planning and estate planning specialties, or the lists of advisors for retirees, advisors for pre-retirees and retirement planning specialists. The retirees, pre-retirees and multi-generational families pages show who serves each.