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Longevity is—thankfully—on the rise across the country. But a longer life often means a higher chance of needing help down the road and a need for long-term care (LTC).
Nearly 60% of adults think Medicare will pick up the tab for long-term care, according to a 2025 survey from the Nationwide Retirement Institute. That’s a costly misunderstanding.
Medicare only covers short-term skilled care after a hospital stay, and even that coverage runs out after 100 days. After just 20 days, you’re on the hook for part of the bill. For the kind of care most people end up needing in LTC, Medicare won’t cover it.
Why This Misunderstanding Is Risky
Medicaid, another program, helps low-income Americans pay for health care; many, however, don’t know it also covers long-term care. The federal government and the states fund it, so the details can vary depending on where you live. But in general, Medicaid covers things like doctor visits, hospital stays, prescription drugs, and—just as critical—nursing home care and help at home.
Nationwide’s study also reveals that 59% of respondents plan to rely on Medicaid to fund long‑term care. However, Medicaid is only available to those who have depleted nearly all assets—typically to just $2,000—and its future as a reliable payer is increasingly uncertain.
Meanwhile, care costs are staggering. A nursing home averages about $159,000 annually in New York, with home-care costing about $66,000 annually. According to the New York State Department of Labor, the average weekly wage in 2024 was about $1,834—or roughly $3,668 a month. That ends with an average annual salary of around $44,016.
The typical cost of long-term care in the state—whether nursing home or home care—can easily match or even exceed what most people make in a year. Relying only on Medicaid to cover your future care costs could leave you vulnerable down the road.
“Too many Americans are entering the most vulnerable stage of life with a false sense of security,” said Holly Snyder, president of Nationwide’s life insurance business.
“We underestimate how long we’ll live, how likely we are to need long-term care, how much that care will cost, and how we’ll pay for it, leaving a growing number of Americans — and their families — unprepared for the financial and emotional toll that often comes with aging.”
How Life Insurance Can Help
Those earning too much to qualify for Medicaid—but not enough to self-fund years of care—can end up financially strained. Rather than relying on misconceptions or public programs, consumers can proactively plan to preserve assets and comfort. This is where life insurances can come to guide.
Average cost is based on averages for ages 30, 40 and 50 for coverage amounts between $250,000 and $2 million and terms ranging from 10 to 30 years.
The Administration for Community Living says some policies pay out a small part of your policy’s value each month—around 2% if you’re in a nursing home.
When you add a long-term care rider to your life insurance, you can access part of your death benefit early to help with daily tasks like bathing or dressing under Accelerated Death Benefits (ADBs).
If you tap into your life insurance’s ADB to pay for long-term care, the money you get now will reduce what’s left for your family later. Also keep in mind that ADB payouts usually don’t go as far or last as long as a regular long-term care policy. And your life insurance might not have enough value to cover all your care needs.
Most accelerated death benefit (ADB) riders don’t increase payments to keep up with inflation, so over time, the money you get might not cover rising care costs.
Bottom Line
Nearly 6 in 10 Americans mistakenly rely on Medicare to cover long‑term care, and 6 in 10 also plan to rely on Medicaid—even though both are inadequate for most care scenarios.
With the rising cost and complexity of aging, life insurance strategies, especially those with living benefits, can offer a reliable safety net and preserve financial security for families. Start planning now, before care needs and costs force difficult decisions down the road.