If your parents are living in the US and are over 60 years old, there is one type of insurance you will hear mentioned increasingly often: long-term care insurance. This article explains what that type of insurance is, how much it costs, who really needs it, and special considerations that Vietnamese families need to think about before deciding.
You have to become 'poor' before Medicaid steps in, which is exactly why long-term care insurance exists to protect the assets your parents built.
What is long-term care — and why is it so expensive?
Imagine your father has a stroke. He survives, but needs help bathing, eating, and getting around every day. Or your mother has advanced-stage Alzheimer's and cannot be left alone.
These are situations that require long-term care — meaning assistance with daily living activities lasting months, sometimes even years. Not hospital treatment, but actual care at home or at a nursing facility.
And in the US, this cost is very frightening. According to Genworth Financial (2024 report), average costs nationwide are as follows:
| Type of service | Average cost per month |
|---|---|
| Home health aide | $6,300 to $7,000 |
| Assisted living facility | $5,500 to $6,000 |
| Nursing home, shared room | $8,700 to $9,500 |
| Nursing home, private room | $9,900 to $11,000 |
A person typically needs care for an average of 3 years (according to the U.S. Department of Health and Human Services). Calculated out, the total cost could exceed $300,000 to $400,000 for one person.
How does long-term care insurance work?
Long-term care insurance is the type of insurance you buy before you need it — like car insurance, you buy it when the car is still running well, not after you've already crashed it.
When the insured person can no longer perform certain basic activities — what professionals call ADL (activities of daily living), meaning daily activities such as bathing, eating, dressing, and using the toilet — then the insurance begins to pay.
Each policy typically includes:
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Daily benefit amount (for example: $150 to $300 per day)
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Waiting period (elimination period — the time you pay out of pocket before insurance kicks in, usually 30 to 90 days)
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Maximum benefit pool (total amount the insurance will pay out during the entire period of use)
Will Medicare and Medicaid cover it?
This is where many Vietnamese families get confused.
Medicare — federal health insurance for people 65 and older — only pays for long-term care for a very short period (maximum 100 days at a rehabilitation facility, with strict conditions). After that, Medicare stops paying.
Medicaid — the program for low-income people — does pay, but only when the patient has almost no assets left. According to federal law, to qualify for Medicaid for long-term care, seniors can typically keep assets below $2,000 (this threshold varies by state). To put it bluntly: you have to become "poor" before Medicaid steps in.
Therefore, if your parents have a home, savings, and assets — that large gap is exactly why long-term care insurance exists.
A special perspective for Vietnamese-American families
Many Vietnamese-American families have a tradition of adult children caring for parents at home. This is something beautiful about the culture, but reality must be considered:
- First, caring for a seriously ill person is not just an emotional matter — it affects the caregiver's job, health, and marriage. According to an AARP 2023 study, unpaid caregivers in America lose an average of over $300,000 in lifetime earnings due to having to leave work or reduce hours.
- Second, many Vietnamese parents came to America late under family sponsorship. If they arrived in America after age 65, they may not qualify for full Medicare because they did not pay enough taxes for 10 years (40 quarters, according to Social Security Administration rules). This makes the insurance gap even larger.
Third, language barriers make it very difficult to search for and compare insurance contracts. If you need help, you can contact nonprofit organizations like Vietnamese American Community Centers or ask for assistance from an insurance specialist who speaks Vietnamese in major communities such as Little Saigon (Orange County), Houston, or San Jose.
Who should — and who should not — buy this type of insurance?
Not everyone needs it. Here is a simple way to think about it:
- Should consider buying if:
- Your parents or you are between 50 and 65 years old and in relatively good health (because after 70 it is very difficult to be approved for insurance or premiums are very high).
- You have average assets — around $200,000 to $1,500,000 — that need protection from being depleted by care costs.
- You do not want to become a financial burden on your children.
- Less likely to need if:
- You have very large assets (over $2,000,000 to $3,000,000) — you can pay out of pocket without significantly affecting your lifestyle.
- You have very little in assets — you will qualify for Medicaid once your assets are depleted, although this is not the ideal choice.
- You have serious health issues already — you will be denied or charged very high premiums.
How much does the insurance cost?
Insurance premiums vary greatly depending on age, health, coverage level, and state. But for reference numbers, according to the American Association for Long-Term Care Insurance (AALTCI) in 2024:
| Age of purchase | Average annual premium (individual) |
|---|---|
| Age 55 | $950 to $1,700 |
| Age 60 | $1,200 to $2,100 |
| Age 65 | $1,700 to $3,200 |
| Age 70 | $2,700 to $5,500 |
The earlier you buy, the cheaper the premium. This is why financial experts often recommend considering this type of insurance when you are in your 50s to 60s, not waiting until you are old and frail.
Are there other options?
Yes. Beyond traditional insurance contracts, you can explore:
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Hybrid life insurance with LTC rider: If you do not use the long-term care benefit, the money is paid to beneficiaries. Premiums are higher but you do not "lose" money if you do not use it.
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Short-term care insurance: Insurance for under 1 year, lower premiums, easier approval for seniors.
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Life Settlement: If your parents have an old life insurance policy, you can sell it to get cash to pay for care.
Where should you start?
The first step is not to call an insurance company. It is to sit down with family and have a real conversation about your parents' health and finances.
After that, if you want to explore seriously, work with an independent insurance broker — someone not tied to a single insurance company, so they can compare multiple options for you. Avoid buying insurance only by phone or social media ads without carefully reading the contract.
The U.S. Department of Health and Human Services also has a website at longtermcare.acl.gov that provides free and neutral information in English.
This type of insurance is not for everyone — but for many Vietnamese-American families trying to protect the assets their parents have built throughout their lives, this is a tool worth sitting down to calculate seriously.