What's the Cost?
How much does a long-term care policy cost?
Each company sets its own rates. You should talk to your agent or the company to get specific rates. Premiums can vary greatly across companies and within companies depending on what features are included in your policy. The following factors will have a direct impact on the amount of premium you will pay:
- Age: The single most important factor - the older you are, the more expensive your premium will be.
- Elimination Period (deductible): The shorter the elimination period, the more expensive your premium will be.
- Daily and Lifetime Benefit: The greater the benefit purchased, the more expensive the premium will be.
- Riders or Options: Additional features, such as a non-forfeiture benefit, will increase the premium.
- Spousal Discounts: Most companies will provide for some discount if both spouses purchase a policy from the same company.
- Group Discounts: Purchasing a policy through a group offering such as through your employer or an association could decrease the premium.
- Paid Up Options: Premiums can also be paid within a specified period (e.g. 10 or 20 years) as opposed to the lifetime payment option where you pay premiums until you need long-term care.
- Health Factors: Some companies offer lower premiums for applicants in very good health and higher premiums for applicants with particular health conditions.
General Questions
What is long-term care? Where is it provided?
Long-term care includes a wide range of services provided to people who need continued help with Activities of Daily Living (bathing, dressing, eating, using the toilet, continence, transferring from a bed to a chair) due to a chronic condition or limited ability to function; or continued supervision due to a deterioration in mental capacity (such as, Alzheimer's Disease and other forms of dementia). Long-term care can be provided in a variety of places, including: a person's home; a nursing facility; through community-based services (i.e., Adult Day Care) and in a variety of assisted living settings (i.e., Continuing Care Retirement Communities, Residential Care Homes, Assisted Living Facilities).
What is the risk of needing long-term care?
Everyone is potentially at risk. A 2016 study1 found that 52%% of people turning 65 years of age will need some long-term care before they die. Women are at a higher risk than men with 58% of women turning 65 years of age needing some long-term care and 47% of men turning 65 needing some long-term care.21 Favreault, Melissa & Judith Dey. 2016. "Long-Term Services and Supports for Older Americans: Risks and Financing." USDHHS Assistant Secretary for Planning & Evaluation (ASPE) Issue Brief. Revised February 2016.
2 Ibid.
What is the cost of long-term care?
The average private pay rate for a semi-private room in a Connecticut nursing facility in 2022 was $477 a day, or over $174,200 per year. The cost for a day in a Connecticut nursing facility has increased approximately 4.6% a year since 1988. The average annual inflation rate for nursing homes in Connecticut over the last 5 years has been 2.6%. The average length of stay in a nursing facility is 2 ½ years, bringing the cost of an average stay to more than $435,000.
Home Care can be just as expensive, depending on the frequency and type of services required.
Who pays the bill?
Many people assume Medicare will pay for their long-term care expenses. In fact, Medicare covers only a small portion of the country's long-term care bill.3 Medicare will pay only when certain conditions are met for both nursing facility and home care, and even then, for nursing facility care Medicare covers on average 20 days and never more than 100 days. Medicaid covers close to half of the nation's long-term care bill,4 but will pay only after someone is impoverished (spending down their assets to $1,600 for a single person in Connecticut). Out-of-pocket expenditures account for about 20% of the nation's long-term care bill, while private insurance and other government programs combined account for less than 10%.5 The majority of home care is still provided by friends and family.
3 Karen Tritz et al, Long-Term Care: Trends in Public and Private Spending, Congressional Research Service, April 11, 2006.
4 Ibid.
5 Ibid.
Why should anyone consider purchasing long-term care insurance?
- MediCARE covers a very small portion of nursing facility costs.
- The average annual cost of a nursing facility in Connecticut is more than $168,000.
- MedicAID requires individuals to spend down almost all their assets.
- There are strict rules and penalties for transferring assets to qualify for MedicAID, and these rules keep getting tighter.
- About one in three (31%) people entering Connecticut nursing facilities as private pay will eventually spend down their assets and qualify for Medicaid.6
- Everyone is at risk for needing long-term care and the risk is high.
6 C. Gruman and L. Curry, Spend-Down Patterns of Individuals Admitted to Nursing Homes in Connecticut, Discussion Paper #11-1999, Office of Policy and Management, February 1999.
What is the Connecticut Partnership for Long-Term Care?
The Partnership is a unique alliance between State government and the private insurance industry developed to: provide individuals with a way to plan for their long-term care needs without the risk of impoverishment; enhance the standards of private long-term care insurance; provide public education about long-term care; and conserve State Medicaid funds. Connecticut was the first state to implement a Partnership. Since 1992, when the Partnership was first launched, New York, Indiana and California have developed similar Partnership programs. Recently, the federal government has allowed additional states to develop Partnership programs and 41 states have taken advantage of this opportunity and have received approval to implement a Partnership program. Please call the Partnership at 1-800-547-3443 (toll-free in Connecticut - from outside Connecticut, call 860-418-6318 for the most up-to-date list of states implementing Partnership programs.
How does Medicaid Asset Protection work?
The most unique aspect of a Connecticut Partnership policy is the Medicaid Asset Protection feature. This feature provides dollar for dollar asset protection: for every dollar that a Partnership policy pays out in benefits, a dollar of assets can be protected from Medicaid spend down rules. When determining Medicaid eligibility, any assets you have up to the amount the Partnership insurance policy paid in benefits will be disregarded. Therefore, if you receive $200,000 in benefits, you may then apply to Connecticut's Medicaid program for assistance and still keep $200,000 in assets (in addition to the $1,600 everyone is allowed to keep and any other asset allowances under Medicaid, including any assets your spouse may be allowed to keep). The Partnership Medicaid Asset Protection feature is not available under non-Partnership policies.
Connecticut Partnership policyholders who relocate to another state may be eligible to receive dollar-for-dollar Medicaid Asset Protection just as they would when they apply to
Who is appropriate to purchase a Partnership policy?
A purchaser must be a Connecticut resident; be generally healthy; meet the age requirements set forth in the policy; be able to afford the cost of the insurance; and should have at least $80,000 in assets.
How are Partnership policies different from other long-term care insurance?
Each Partnership policy must include the following features, which are not required of other long-term care insurance policies:
- Must offer the option to purchase a wide array of home and community-based services.
- Must provide, as part of a home care benefit, care management services which include: an individualized assessment and development of a plan of care; coordination of service providers; and monitoring the quality of services provided.
- Must provide automatic inflation protection on an annual basis at a rate of no less than 3.0% per year.
- Adhere to minimum daily rates established for Nursing Facility and Home and Community-Based benefits, which increase 3.0% annually.
- Must offer the policyholder, in the event they are about to drop their policy, the option to switch their coverage to a shorter benefit period than originally purchased, thereby reducing their premium.
- Agents who wish to sell Partnership policies are required to complete a certification training program, not required of those who sell only non-Partnership long-term care insurance.
- Only Partnership policies provide Medicaid Asset Protection.
- Only Partnership policyholders are guaranteed by law a 5% discount on private pay nursing facility rates in Connecticut.
Download Printed Report
If you would like to download a printed copy of the Frequently Asked Questions' report, please click on the following https://portal.ct.gov/PDPD-HHS-Long-Term-Care/Advisor/Partnership-Advisor-Publications and choose the selection for "Frequently Asked Questions".
For more information contact:
OPM.CTPartnership@ct.gov
(860) 418-6318