Where will they live? Does insurance cover it? Do I have to pay for it? What happens if we can’t afford it?
These aren’t questions you really want to ask about your loved ones but most of us will be expected to help with the answers at some point. In the blink of an unexpected phone call–your mom had a fall, or maybe dad’s memory has been failing more often–comes a stark realization: your parent–or aunt, or grandparent, or sibling—can no longer live safely on their own.
The US Department of Health and Human Services estimates that around 70% of adults over the age of 65 will need long-term care at some point.
This means somewhere around 50 million Baby Boomers are expected to need some amount of daily living support and medical care, and/or will require supervision during their lifetime. Considering everyone from that generation will be over the age of 65 in the next five years, many will need help within the next 10-15 years. Ready or not, the time to understand what happens next is probably closer than you think.
What is Long-Term Care?
Generally, long-term care is about helping someone who cannot perform all of the tasks necessary for daily living, whether related to natural aging, a permanent disability, or chronic illness. Needs vary but long-term care can range anywhere from occasional help with basic tasks to 24/7 supervision. For some, it’s assistance a few times a week with cooking or appointments while others will need more frequent help with personal care such as hygiene, using the bathroom, and managing medications.
The most extensive needs often require full-time support in a nursing and/or memory-care facility, with trained staff to provide medical support, monitor safety, and manage conditions like dementia or Parkinson’s.
Who provides long-term care?
Choices for long-term care vary significantly based on the care a person needs and their geographic location. Many people prefer to remain in their homes, in which case they might seek help, as needed, from a friend or family member or a professional in-home aide.
Other possibilities include nursing homes, skilled nursing facilities and rehabilitation centers, assisted living facilities and/or communities, memory-care homes, or secure memory-care units within a nursing home or assisted living facility.
There are about 25 nursing homes and skilled nursing facilities located in Washtenaw County along with many assisted living facilities and communities, according to the Washtenaw County Health Department. Within the same area, about 50 residential facilities are licensed to provide specialized memory-care services, ranging from secure units within a nursing facility to small, group residences.
How much does long-term care cost?
Brace yourself. These rough estimates for various long-term care options in and around Washtenaw County in 2025 are staggering:
- Nursing/retirement home: between $120,000 and $130,000 per year
- Assisted living: Around $6,500 per month
- Licensed in-home care services: $30–$35 per hour
- Memory-care services: add between $1,500-$2,000 per month to the amounts listed above
Who pays for long-term care?
You do. According to insurance industry statistics, nearly all American seniors who require long-term care pay for it out of their own pockets.
Far too many people believe Medicare covers long-term nursing care for seniors but it does not. Medicare helps with short-term needs, like the kind required for a few weeks following surgery, but it doesn’t provide coverage for ongoing, long-term care, needs, and daily living support.
Some seniors also have additional insurance coverage specifically designed to cover gaps in their Medicare–private insurance plans like Medicare Advantage or maybe a retiree health plan from a former employer. Something like that might enhance or extend Medicare’s short-term coverage for a little bit but the vast majority of those plans also do not cover long-term nursing care.
Even our veterans who served in Vietnam, Iraq, or anywhere else are not guaranteed long-term care benefits. Eligibility for VA-sponsored nursing home care or in-home support is not automatic. Determinations are made based on service-connected disability ratings (usually 70% or higher), income, clinical need, and local availability.
So, since only about 5% of Americans 50 or older have a policy that specifically covers long-term care, almost everyone who requires it will need to pay for it themselves.
Can Mom afford it?
We all hope a parent never needs full-time care but the reality is many of them will. In Washtenaw County, a person can expect to need between $8K-$12K per month to cover the cost of full-time, long-term care. For those who have that amount of additional discretionary funding every month, congratulations, you can relax.
For those who don’t have the extra funds, what happens? Every situation is different of course. Some will probably be fortunate to have a friend or family member who can take them in, or help with in-home care. For everyone else, this is when seniors are often required to access their estate. Things like savings, retirement and investment accounts, real estate in many cases, and any other assets that can be converted to cash.
But even then, not all nest eggs can handle the staggering cost of long-term care so a lifetime of savings can be drained very quickly. When that happens, does a nursing home evict a resident from care?
No, there is one more option before homelessness. It’s called Medicaid.
Nobody chooses Medicaid
Medicaid is a joint health program between the federal government and each state. Its purpose is to support and protect public health and safety by providing the most vulnerable and at-risk people with access to basic healthcare services.
- 42% of people enrolled in Medicaid programs–almost half–are children.
- Medicaid covers the cost of care for over 60% of our parents, grandparents, and other loved ones in nursing homes.
- An additional estimated 71,000 seniors in Michigan receive community and in-home long-term care services and/or support through state programs like the MI Choice Waiver Program, PACE, and the Home Help Program, all funded by Medicaid.
To be completely clear, a person can’t just choose to use Medicaid. There are strict eligibility rules in place to ensure it’s only provided to a person who has no meaningful funds or other assets. Definitions and calculations for “no meaningful funds or other assets” is a little different for each program and in each state, but not by very much. Essentially, it means this person has no other possible way to pay for the care they need. They have nothing.
Outside a few small exceptions, Social Security retirement and disability payments and VA disability payments are all counted as income. So, before qualifying for long-term care through Medicaid, a single person must have a monthly income of less than about $2900 and can have no countable assets worth a total of more than about $9900–which includes retirement accounts, investment accounts, second homes and other real estate that isn’t a primary residence, RVs, and any other major assets, if they’d ever had those things to begin with.
Finally, except for a very small amount called a personal allowance, whatever monthly income they do have is used to cover the cost of the care facility. In Michigan, a person can keep $60 of their monthly income and rest is paid to the facility.
For those who are sure the system can be gamed by hiding funds and/or transferring assets, think again. Medicaid has a five-year “look-back” rule and any transactions that indicate funds or assets were improperly transferred can trigger penalties that delay eligibility, or even deny it altogether.
The Point
70% of Americans over the age of 65 will need some form of long-term care during their lifetime but only 5% of Americans over the age of 50 have an insurance policy to cover that cost.
The majority of seniors in Michigan who need long-term care — including solidly middle-class ones — simply cannot afford the cost and many will rely on Medicaid.
Medicaid isn’t a loophole or a waste. It’s a tough, complicated, last-resort safety net that protects our most vulnerable from becoming homeless in their sunset years.
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