Marcos Rangel
Senior Benefit Leader
Ask your employees where they want to receive care when they can no longer live independently. More than 3 in 4 will say the same thing: "At home."
They want to stay in the house where they raised their kids, keep their morning routine, sleep in their own bed, and have Sunday dinner with family around their dining table—not in a shared cafeteria at 4:30 pm.
Now ask them where they'll actually receive that care without long-term care insurance.
The answer is often decided for them—by Medicaid, by available facility beds, or by whoever's making decisions when they can no longer do so or afford to do so.
This is the conversation we should be having about long-term care (LTC) insurance. It's not just about paying for care. It's about paying for control over the final chapter of your life.
The Medicaid reality check
Here's what happens when someone needs long-term care without insurance: They spend down their assets (retirement savings, home equity, etc.) until they qualify for Medicaid. Then Medicaid steps in.
The math can be brutal. Professional non-medical caregivers cost an average of $35 per hour. If someone needs 8 hours of daily care, that's about $8,000 per month out of pocket. Full-time care? Over $16,000 monthly. At these costs, most individuals with moderate savings deplete their assets within 1-2 years when paying privately for care.
But here's what most employees don't understand about Medicaid long-term care coverage:
Medicaid doesn't just pay for care. Medicaid controls it.
- Limited choice: You can only receive care at Medicaid-certified facilities. This also means that when your savings run out during care, you might be forced to transfer to a different facility. And you go where Medicaid has an available bed, often 30-45 minutes away from family.
- Institutional bias: Medicaid primarily covers nursing homes—not the home care 75% of people prefer.
- Medical qualification requirements: Your medical need must be severe enough to qualify for nursing home-level care. If you need substantial help but don't meet the threshold, you fall into a care gap—needing more than you can afford but not enough for Medicaid to step in.
- Privacy becomes a luxury: Shared rooms are standard.
- Reimbursement challenges: Medicaid reimbursement rates vary significantly by state and facility, with the national median at 86% of actual costs—though 15% of facilities receive less than 70% of costs, meaning facilities often lose money on Medicaid patients.
Medicaid provides essential safety-net coverage, but it comes with constraints most people don't realize until it's too late.
Two women, same diagnosis, different lives
Margaret, 78, without LTC insurance:
- Diagnosed with moderate dementia
- Needed 8 hours daily home care at $35/hour = $80,080/year
- Spent down $180,000 in savings over 18 months paying for care
- When money ran out, placed in a nursing facility 30 miles from daughter (only available Medicaid bed)
- Shared room, restricted visiting hours, couldn't bring her cat
- No choice in daily routines or care approach
Dorothy, 78, with LTC insurance:
- Same dementia diagnosis requiring 8 hours of daily care
- Insurance pays $4,000/month cash benefit
- Combined with family support and some personal funds, covers professional caregiver costs ($8,000/month)
- Lives in her home of 42 years with hired caregivers
- Kept her routines, her garden, her cat
- Family visits anytime
- Dies at home three years later, $200,000 of estate intact for grandchildren
Note: Margaret and Dorothy are composite profiles based on typical claims and industry scenarios.
Same medical condition. Completely different experiences.
The only difference? Dorothy paid $158/month for 16 years for a policy she bought through her employer at age 60. Total investment: $30,336. Benefits received: $144,000. Estate preserved: $200,000.
But more importantly, Dorothy got to choose.
