Key Takeaways

• Medicare does not cover long-term custodial care, which can leave your clients financially exposed in their most vulnerable years.

• As an independent agent, your ability to clearly explain this gap—and help clients explore alternative options—is critical to their long-term security and your credibility.

What Medicare Covers—and What It Doesn’t

Many clients believe Medicare offers comprehensive protection in retirement, but that belief begins to crumble when long-term care becomes necessary. Medicare Part A and Part B cover hospital stays, doctor visits, skilled nursing care, and rehabilitative services—but only under specific, short-term conditions.

Here’s what clients get wrong: they often assume that Medicare will pay for long-term stays in a nursing home or for in-home custodial care. In reality, Medicare does not cover:

• Extended nursing home stays beyond 100 days

• Help with activities of daily living (ADLs) like bathing, dressing, or eating

• Full-time home health aides for non-medical support

• Assisted living facility costs

Medicare only covers up to 100 days of skilled nursing facility (SNF) care following a qualifying hospital stay of at least three days—and only when the patient shows signs of improvement. Once improvement stops or the 100 days are used, coverage ends.

The Real Cost of Long-Term Care in 2025

In 2025, long-term care costs remain staggeringly high:

• Nursing home care (private room): around $120,000 annually

• Assisted living: $60,000 per year, on average

• Home health aide: $35–$40 per hour for non-medical assistance

That means a single year of needing custodial care can devastate a retiree’s savings. Multiply that across a 2–3 year period—common for many individuals needing dementia or mobility care—and the numbers become unsustainable for most households.

Why Clients Misunderstand the Coverage Gap

Part of the confusion stems from how similar terms are used in healthcare:

• Skilled care is medical (covered by Medicare)

• Custodial care is non-medical (not covered)

You’re in a unique position to clarify that distinction. Even clients who have read Medicare materials often overlook the fine print or misinterpret terms like “rehabilitation,” assuming it extends to long-term support. As their agent, you can preempt this confusion by addressing it during plan reviews or annual consultations.

Medicaid Isn’t a Catch-All Either

Some clients assume Medicaid will take over when Medicare stops. But Medicaid has strict income and asset eligibility limits. To qualify, clients must “spend down” their assets to levels that often leave little financial security for their spouse or heirs.

• In most states, the asset threshold for Medicaid is $2,000 for individuals.

• Income limits vary by state but are typically low.

Clients who want to preserve their independence or legacy may find the idea of relying on Medicaid unacceptable. Explaining this upfront allows you to present smarter, earlier planning options.

Why Timing Matters for Long-Term Care Planning

The ideal time for clients to consider long-term care solutions is between ages 55 and 65, when they are more likely to:

• Be healthy enough to qualify for alternative insurance-based solutions

• Have time to shift financial strategies

• Understand their family health history and prepare accordingly

Waiting until a diagnosis or a functional decline has already occurred will eliminate many of the most flexible options. Emphasize this timeline in your conversations to avoid difficult last-minute decisions later.

How to Communicate the Gap Clearly

You don’t need to overwhelm clients with actuarial tables. Instead, frame the long-term care gap as a critical missing piece of retirement planning. Here are some strategies:

• Start with a question: “If you needed help with bathing or dressing for two years, how would you pay for it?”

• Clarify Medicare’s role: Emphasize that Medicare is acute-care focused, not custodial.

• Use general cost figures: Show what one year of nursing home care could do to their nest egg.

• Walk through possible consequences: Depleting assets, relying on children, or Medicaid spend-down.

Key Planning Options You Can Discuss

While you can’t provide legal or tax advice, you can explain the existence of planning options your clients can explore with other professionals. Some of these include:

• Long-term care insurance (LTCi)

• Hybrid life insurance with LTC riders

• Annuities with care provisions

• Health Savings Accounts (HSAs) for those still eligible

• Asset protection strategies through estate planning

Not every client will pursue a formal insurance product. But they should all understand that a gap exists—and that ignoring it invites serious risk.

Long-Term Care as a Key to Client Trust

When you’re the one who points out what other agents overlook, you build real trust. Even if your client doesn’t act on the information today, they’ll remember that you were transparent and thorough.

Some benefits of taking the lead on this conversation:

• You demonstrate expertise in retirement planning, not just plan selection

• You reduce the chance of future dissatisfaction or blame

• You increase the likelihood of client referrals for your honesty and foresight

When to Bring Up Long-Term Care in Your Workflow

You don’t need to save this conversation for an annual review. There are better, earlier opportunities to introduce it:

• Initial plan enrollment: When discussing Medicare limits, highlight what’s excluded.

• Turning 65 clients: As they enter retirement, frame long-term care as a future-stage issue.

• Post-hospitalization: Clients recovering from illness often realize how vulnerable they are.

• Life events: Encourage a discussion if a client’s spouse, friend, or sibling enters a facility.

Having a structured workflow helps you avoid skipping this vital topic due to time or discomfort.

Don’t Skip Over the Reality—Even if It’s Uncomfortable

Yes, long-term care discussions can be emotionally charged. But skipping them only pushes risk further down the road. Use a tone of concern, not fear—and help clients feel empowered, not pressured.

You’re not just a Medicare agent. You’re a strategist, a confidante, and a reality-check when others sugarcoat. Your role isn’t to sell a product. It’s to protect a plan.

Preparing Clients Now Prevents Crisis Later

Long-term care may not be part of Medicare, but it is absolutely part of a successful retirement plan. And your clients will be better off when they know this in advance, rather than learning it through a financial or medical crisis.

Some parting reminders to reinforce:

• Medicare does not cover long-term custodial care—period.

• Medicaid has strict eligibility that may require asset depletion.

• Waiting until care is needed dramatically narrows options.

• Addressing the gap early gives clients more choice and control.

You Deserve Better Tools to Serve Your Clients

We created BedrockMD to give independent agents like you the clarity, tools, and support needed to thrive in a complex healthcare market. When you sign up with us, you gain access to resources that make client conversations easier, more effective, and more rewarding.

Let us help you elevate the quality of your service—and the trust your clients place in you.