Is long-term care insurance worth it if you have Medicare?
Medicare was never going to pay for this, and most people in north Peoria find that out from a parent before they find it out for themselves. Here is what the care actually costs in Arizona, the three ways a household with real assets can cover it, and the one Arizona program that changes the arithmetic for a policy bought here.
It is worth it when several years of care would do real damage to your retirement, your spouse’s retirement or what you meant to leave behind, and when you are still young enough and well enough to be insured on reasonable terms. It is not worth it if you can absorb that cost without flinching, and it is not available at any price once your health has turned. Medicare does not pay for this care, Medicare Supplement plans do not either, and in Arizona the median cost of a semi-private nursing home room is $8,365 a month.
That is the honest answer, and the rest of this is how to work out which side of it you are on. I write it from the north Valley because the question comes up here constantly. Vistancia and Trilogy are full of households in their sixties who sold a house somewhere colder, arrived with a solid balance sheet, and watched a parent spend the last of theirs on care. The fall, when you are already reviewing your Medicare for 2027, is the right time to settle this one too, because the rules that decide it have nothing to do with December 7 and everything to do with your next birthday.
What Medicare actually pays for
Medicare pays for care that is skilled and expected to make you better. It does not pay for care that keeps you going.
In practice that means Part A covers up to 100 days in a skilled nursing facility per benefit period, after a qualifying hospital stay of at least three days as an inpatient. Days 1 through 20 are paid in full. Days 21 through 100 carry a daily coinsurance of $217 in 2026, which comes to $17,360 if you use all 80 of them. From day 101 Medicare pays nothing. I went through that clock day by day in How long does Medicare pay for rehab after a hospital stay?
Medicare.gov puts the rest of it in one sentence: Medicare and most health insurance, including Medicare Supplement Insurance, do not pay for long-term care services, including care in a nursing home or in the community. Long-term care in that sentence means help with bathing, dressing, using the bathroom, eating and moving around, plus meals and adult day care. It is what most people who need care for years actually need, and the federal government’s own estimate is that someone turning 65 today has almost a 70 percent chance of needing some of it.
Two things people hope will fill the gap do not:
- A Medicare Supplement pays its share only when Medicare pays first. If Medicare denies a day of care as custodial, Plan G pays nothing on that day either.
- A Medicare Advantage plan’s extra benefits can add some in-home support hours after a hospital stay, meal delivery or transportation. Those are real and worth reading in the plan documents, but they are measured in hours and weeks, not years.
What the care costs in Arizona
These are the 2025 Arizona medians from the CareScout Cost of Care Survey, which is the same data the cost of care estimator on this site runs on. They are medians, not quotes. Prices in the Phoenix metro vary more within a single ZIP than almost any other figure I deal with, and a newer community in north Peoria will often sit above the state median.
| Setting | Arizona median (2025) | What Medicare pays |
|---|---|---|
| In-home caregiver, non-medical | $38 an hour | Nothing for custodial help. Part-time skilled nursing or therapy at home is covered when you are homebound and a doctor orders it. |
| Assisted living community | $6,250 a month | Nothing toward rent, meals or daily help. Your Part B care continues as usual. |
| Memory care | $7,800 a month | Nothing toward the residence or supervision. |
| Nursing home, semi-private room | $8,365 a month | Up to 100 skilled days per benefit period after a 3-day inpatient stay. Nothing for long-term custodial residence. |
| Nursing home, private room | $11,437 a month | Same 100-day limit, and Medicare does not pay the private-room difference. |
Source: CareScout Cost of Care Survey, 2025 edition, Arizona medians; Medicare.gov, "Long-term care" and "Skilled nursing facility (SNF) care".
The duration is what turns those monthly figures into a planning problem. The Administration for Community Living’s figures are that women who need care need it for about 3.7 years and men for about 2.2, and one person in five needs it for more than five years. At the state median, three years in a semi-private nursing home room is $8,365 a month for 36 months, which lands near the price of a house in Westbrook Village. Four years of assisted living is roughly $75,000 a year for four years. And there are usually two of you.
The question is really about your spouse
Here is the test I use with the couples I sit down with, and it is a better test than any rule of thumb about net worth.
Take your current income and assets. Subtract $8,365 a month, or $6,250 a month, for three years for one of you. Then ask whether the one of you still living at home is fine. Not surviving. Fine, in the house, with the same retirement they were promised.
If the answer is yes without hesitation, you can self-fund, and I will tell you so. Insurance is a tool for a risk you cannot absorb. If you can absorb it, paying premiums for it is paying for somebody else’s margin.
If the answer is a pause, you have found the risk the insurance exists for. The cost of care is not the problem. The cost of care for one spouse landing on the other spouse’s remaining years is the problem.
There is a second version of the same test for people who are already widowed or single. Subtract the same figure and ask whether what you meant to leave to your children, or to anything else you care about, is still there. For a lot of households in north Peoria the honest answer is that the house would be sold to pay for it, and the question becomes whether that is acceptable.
Three ways to cover it, and what each one trades
There are three routes. Each is a legitimate answer for somebody, and none of them is a Medicare product, so I am going to describe how they are built and leave the pricing to a quote done on your own age and health.
| Route | How it works | What you give up |
|---|---|---|
| Self-fund | Earmark income, savings or the house. Pay for care as it comes. | Every dollar of care is a dollar out of the estate, and the duration is the part nobody can forecast. Taking large sums out of a traditional IRA to pay for it also raises your income, which can push your Medicare premiums into an IRMAA bracket two years later. |
| Traditional long-term care insurance | Pays a daily or monthly benefit toward care once you cannot do a set number of daily activities on your own, for a chosen number of years. | If you never need care, the premiums are gone. Older blocks of policies saw rate increases, and asking a carrier about its rate history is a fair question to put to any agent. |
| Hybrid life and long-term care | A life insurance policy with a long-term care benefit. Needing care draws down the benefit. Never needing it leaves a death benefit for your beneficiaries. Often funded with a single payment or a fixed number of payments. | You pay more for the same care benefit than a traditional policy would charge, because the money is going somewhere either way. The trade removes the objection that stops most people acting at all. |
Education only. None of these is a Medicare product; premiums, benefit limits and eligibility depend on age, health and the design of the contract, and are quoted by a licensed professional.
The long-term care page on this site goes into how the traditional and limited-pay versions are structured. What I want to add here is the thing that is specific to Arizona.
The Arizona Partnership program changes the arithmetic
Arizona is a Long-Term Care Partnership state, and almost nobody who asks me the question in this headline has heard of it.
The program is a joint effort between the State of Arizona and private long-term care insurers, and it works alongside ALTCS, the Arizona Long Term Care System, which is the state’s Medicaid program for long-term care. Ordinarily ALTCS is the last resort for someone who has spent nearly everything on care. The Partnership program sets up a different ending:
- Dollar-for-dollar asset disregard. If you hold a Partnership-qualified policy and later apply to ALTCS, the total benefits the policy paid out before your application month are disregarded when ALTCS counts your assets. A policy that paid $80,000 toward your care means $80,000 of your assets are not counted. That example is AHCCCS’s own.
- The same amount is protected from estate recovery. ALTCS can ordinarily recover what it spent from a member’s estate. The disregarded amount is shielded from that, so it can pass to your heirs.
- What qualifies. The policy has to include inflation protection, meet the federal Partnership standards, and have been bought in Arizona on or after July 1, 2008. If you bought a Partnership policy in another Partnership state before you moved here, Arizona will honor it, and AHCCCS can review the policy to confirm its status.
Two cautions, both from the same AHCCCS document. A Partnership policy does not guarantee ALTCS eligibility; you still have to meet the medical, financial and program requirements. And a policy can lose Partnership status if it is changed, if you move to a state without a Partnership program, or if the law changes.
Why this matters to the “is it worth it” question: a Partnership policy with a three-year benefit is not only three years of paid care. It is also a protected floor under the assets you keep if the care outlasts the policy. For a household that would otherwise be choosing between a very large policy and no policy, that floor is often what makes a moderate one make sense. Ask specifically whether a policy you are shown is Partnership-qualified. Not every policy sold in Arizona is.
Why your age matters more than the plan year
Everything in your Medicare review resets every January. This does not. Two things set the price and the availability of long-term care coverage, and both move in one direction.
Age. Premiums rise with every year you wait. That is arithmetic.
Health. A diagnosis between now and the day you apply can make you uninsurable outright. That is not arithmetic. It is a door closing. Applications are declined far more often after 70, and most carriers stop writing new traditional policies somewhere in the mid-70s.
The window where this is most solvable is roughly your late fifties to early seventies, in reasonable health. That is the age of most of the people moving into the 85383 corridor, and it is also, uncomfortably, the age at which most people have just finished helping a parent through care and are in no hurry to think about it again.
If you are on the fence, the decision does not have to be whether to buy. It can be whether to find out what you would be offered while you are still insurable, so that the choice is yours rather than an underwriter’s.
Where the money comes from, and the Medicare consequences
Three money questions come up every time, and each has a Medicare angle.
Can I pay the premium from my HSA? Yes, within a limit. IRS Publication 969 lists long-term care insurance premiums among the qualified medical expenses an HSA can pay, subject to an age-based annual limit the IRS adjusts each year. You can no longer contribute to the account once you are enrolled in any part of Medicare, which I covered in Can I contribute to an HSA while on Medicare?, but the balance you built up can keep paying those premiums tax-free. Your tax advisor can confirm the limit for your age.
Is the premium deductible? Part of it can be, for a tax-qualified policy, within the same age-based limits, and only if you itemize and your medical expenses clear the threshold. That is a question for your tax advisor, and the answer is different for almost every household.
What if I pay for a hybrid policy out of an IRA? A large withdrawal to fund a single-premium policy is ordinary income in the year you take it, and Medicare looks back two years at that income to set your Part B and Part D premiums. For 2026 the surcharge starts above $109,000 for a single filer and $218,000 for a couple filing jointly. I wrote about the same effect in Does a Roth conversion affect Medicare premiums? and the IRMAA estimator will show you where a given year’s income lands. The timing of a withdrawal, spread across tax years or not, belongs in the same conversation as the policy.
What this looks like in Peoria
Peoria stretches nearly thirty miles north to south, and this question lands differently at each end.
In Vistancia, Trilogy and the rest of the 85383 corridor, I see couples in their early sixties who arrived from another state with a paid-off house and a healthy portfolio. They are in the window. The conversation is usually about whether a Partnership-qualified policy sized to protect the surviving spouse makes more sense than carrying the whole risk themselves, and about whether an existing HSA balance should be doing the paying.
In Westbrook Village and the older 85345 core, the households I meet are more often in their mid-seventies and have already had the experience with a parent or a sibling. For many of them traditional coverage is no longer available on terms that make sense, and the realistic conversation is about self-funding well: knowing the local numbers, understanding what ALTCS does and does not do, and making sure the Medicare side is set up to pay for every skilled day it can.
Both ends of the city send people to the same place when care is actually needed. Sun City has one of the densest concentrations of Medicare-focused practices and care settings in the state, and a great many north Peoria households end up receiving care there. That is worth knowing when you size a benefit: the local price of the care you are most likely to use is the figure to plan around, not a national average.
The short version
- Medicare pays for up to 100 skilled days after a hospital stay and nothing for long-term custodial care. Medicare Supplement plans follow Medicare and pay nothing toward it either.
- In Arizona the 2025 medians run from $38 an hour for in-home help to $11,437 a month for a private nursing home room, and women who need care need it for about 3.7 years.
- Long-term care insurance is worth it when three years of care for one spouse would damage the other spouse’s retirement, and you are still young enough and well enough to be insured on reasonable terms.
- Arizona’s Partnership program protects a dollar of assets for every dollar a qualified policy pays out, from both the ALTCS asset test and estate recovery. Ask whether a policy is Partnership-qualified.
- Age and health decide this, not the plan year. Finding out what you would be offered costs nothing and keeps the choice yours.
If you would rather talk it through
Bring a rough picture of your income, your assets and whether there is an HSA balance, and the name of anyone in your family who has needed care. It takes about half an hour to work through the spouse test with real local numbers and to see whether self-funding, a traditional policy or a hybrid fits. There is no charge for the conversation. I am not a tax advisor, and the deduction and IRA-withdrawal questions should go to yours. What I can do is show you what the care costs here, what Medicare will and will not pay toward it, and how each route is built.
I work with people across Peoria, from Vistancia to Westbrook Village. The office is in Anthem, roughly 25 minutes from north Peoria out the Carefree Highway and down Lake Pleasant Parkway, and most of this gets done by phone. Call (602) 844-6002 or book a time — and if you call or text, that is your consent for me to reply the same way.
Common questions
Does Medicare cover long-term care?
No. Medicare pays for skilled, rehabilitative care, which means up to 100 days in a skilled nursing facility after a qualifying three-day inpatient hospital stay, with a daily coinsurance from day 21. It pays nothing for custodial care, which is help with bathing, dressing, eating and getting around, whether that help happens in a nursing home, an assisted living community or your own house. Medicare Supplement plans follow Medicare, so they pay nothing toward it either, and a Medicare Advantage plan's extra benefits are a few hours of help, not a care plan.
What is the biggest drawback of long-term care insurance?
With a traditional policy, you can pay premiums for twenty years and collect nothing if you never need care. That is how insurance works, but it is the objection that stops most people. The second drawback is rate history. Traditional policies sold in the 1990s and 2000s were underpriced across the industry and policyholders saw increases they did not expect. Policies written today are priced more conservatively, and a hybrid life and long-term care policy removes the first objection entirely by paying a death benefit if the care benefit goes unused.
At what age is it too late to buy long-term care insurance?
There is no single cutoff, but both age and health move against you. Premiums rise with every year you wait, applications are declined far more often after 70, and most carriers stop issuing new traditional policies somewhere in the mid-70s. A diagnosis can close the door earlier than any birthday does. The window where this is most solvable is roughly your late fifties to early seventies while you are still in reasonable health.
How much does long-term care insurance cost per month?
It depends on your age when you apply, your health, whether the policy covers one person or a couple, the monthly benefit, how many years it pays, and whether it includes inflation protection. Those variables move the premium by a wide margin, which is why a figure in a blog post would be misleading. A licensed long-term care professional can quote your own situation, and the premium is only worth looking at alongside the cost of the care it replaces, which in Arizona runs from $38 an hour for in-home help to $11,437 a month for a private nursing home room at the 2025 medians.
What is the Arizona Long-Term Care Partnership Program?
A joint program between the State of Arizona and private long-term care insurers. If you buy a Partnership-qualified policy and later apply to ALTCS, Arizona's Medicaid long-term care program, every dollar the policy paid out is disregarded when ALTCS counts your assets, and the same amount is protected from Medicaid estate recovery so it can pass to your heirs. A policy qualifies if it includes inflation protection, meets the federal Partnership standards, and was bought in Arizona on or after July 1, 2008. Arizona also honors Partnership policies bought in other Partnership states.
Can I pay long-term care insurance premiums from my HSA?
Yes, within a limit. IRS Publication 969 lists long-term care insurance premiums as a qualified medical expense you can pay from a Health Savings Account, subject to an age-based annual limit that the IRS adjusts each year. You cannot add money to an HSA once you are enrolled in Medicare, but the balance you already have can keep paying those premiums tax-free for as long as it lasts. Your tax advisor can confirm the limit for your age.