The Hidden Costs of Long-Term Care — and How MassHealth Helps

Planning for long-term care isn’t something anyone looks forward to, but it’s one of the smartest steps you can take to protect your family’s financial security. As care costs rise faster than inflation, families often discover too late that savings, retirement accounts, or home equity can vanish in just a few years of care.

In Massachusetts, MassHealth provides critical support for eligible residents who need long-term care. The key is early long term care planning before a medical crisis hits.

The Rising Cost of Long-Term Care

The cost of care has continued to climb. In 2024, the national median annual cost of a private nursing home room reached $127,750, while a semi-private room averaged around $111,325. Assisted living facilities averaged about $70,800 per year, and home health aide services cost nearly $70,000 annually.

For families managing Alzheimer’s or dementia care, total annual costs can be even higher, adding $56,000 to $72,000 more per year due to specialized supervision and support.

Note: Costs vary by region and facility type. Massachusetts averages are often higher than national medians.

At the same time, long-term care insurance premiums have climbed steadily, catching many policyholders by surprise. Rising claims, longer lifespans, and economic factors have led major insurers to seek regular rate increases, leaving some older adults struggling to keep their coverage affordable.

Why the Costs Keep Rising

• People are living longer. Extended life expectancy often means more years requiring assistance.
• Labor shortages drive costs up. The demand for skilled caregivers far exceeds supply.
• Low investment returns. Insurance companies struggle to maintain reserves, leading to higher premiums.

Strategies to Make Coverage More Affordable

For those who already have long-term care insurance, there are ways to make coverage more manageable without losing essential protection:

• Lower the daily benefit. Reducing the daily coverage amount can decrease annual premiums.
• Adjust the benefit period. Switching from lifetime coverage to a 5- or 10-year benefit can lower costs substantially.
• Review inflation riders. Older policyholders may consider adjusting inflation protection to keep premiums stable.
• Change the waiting period. Extending the period before benefits start may reduce costs.

If you receive a notice about a rate increase, don’t ignore it. Contact your insurance company or speak with your attorney to explore your options. Sometimes, small adjustments can make a big difference.

When Insurance Isn’t Enough: How MassHealth Helps

Even with insurance, long-term care expenses can easily outpace coverage. That’s when MassHealth becomes a vital lifeline. MassHealth helps cover nursing home and in-home care costs for qualified Massachusetts residents, but the eligibility rules are complex and must be carefully planned for.

Without advance long-term care planning, families may be required to spend down countable assets to meet eligibility thresholds, unintentionally sacrificing financial stability for a surviving spouse or heirs.

Legal Tools That Support MassHealth and Care Planning

• Irrevocable Trusts to help protect certain assets while maintaining eligibility for benefits.
• Durable Powers of Attorney so a trusted person can manage financial affairs if you’re unable.
• Healthcare Proxies and HIPAA Releases to ensure your loved ones can communicate with your doctors.
• Advance Directives (Living Wills) to express your healthcare wishes clearly before a crisis.

The earlier you begin this planning, the more options you’ll have. An experienced elder law attorney can help you navigate the process and protect what matters most. 

The Emotional and Financial Toll of Waiting

When long-term care planning is delayed, families face not just financial stress but emotional strain:

• Delays in care placement while finances and paperwork are sorted.
• Disagreements among family members about medical or financial decisions.
• Increased vulnerability to financial exploitation or caregiver fraud.

As Forbes notes, families without estate plans often experience chaos and conflict during medical or financial emergencies. Having clear documents in place and a plan for long-term care spares loved ones from confusion and protects everyone involved. Contact Kristine Romano Law today to take the next step.

Key Takeaways

• The average annual cost of a private nursing home room is now over $125,000.
• Long-term care insurance premiums continue to rise, with some policies increasing more than 40%.
• MassHealth can cover long-term care, but eligibility planning should start years in advance.
• Key documents including trusts, powers of attorney, and healthcare proxies are essential parts of long term care planning.
• Planning early ensures that your wishes are honored and your family’s financial foundation is secure. 

References: CareScout 2024 Cost of Care Survey and CNBC (September 8, 2019). Long-term care insurance costs are way up. How advisors can help clients cope.