Long-Term Care Insurance Covers 2.6 Years on Average in Assisted Living

A recent report from America’s Health Insurance Plans (AHIP) highlights key data on the use and coverage duration of long-term care insurance in assisted living and nursing home settings across the United States. Nationwide, long-term care insurance policies cover an average of 2.6 years in assisted living, where the annual cost averages $70,800. In nursing homes, the average coverage duration is shorter at 1.5 years, with costs varying from $111,325 for semi-private rooms to $127,750 for private rooms annually. The report draws from 2024 data collected from the National Association of Insurance Commissioners and CareScout’s cost of care survey. It reveals that over 6.9 million Americans have long-term care insurance, and insurance claims paid out nearly $16.9 billion last year, with an average claim amounting to $185,572. Policyholders generally pay an average monthly premium of $165 to maintain coverage. Geographically, coverage duration and costs vary significantly. For example, in New York, long-term care insurance policies cover up to 3.4 years of assisted living, with an annual cost of $75,600. South Dakota and Texas offer similar extended coverage durations but at lower average annual costs of $52,500 and $63,000, respectively. Conversely, states like Hawaii, Alaska, and Maine experience much shorter coverage durations, typically around 1.4 to 1.6 years, with Hawaii's assisted living costs exceeding $135,700 annually. The majority of insured individuals hold stand-alone long-term care policies, covering 5.8 million people. Other policy types include acceleration policies, which combine life insurance with a long-term care rider, covering about 750,000 people, and extended benefits or hybrid policies linked to annuities or life insurance, covering roughly 375,000 individuals. This comprehensive data underscores the significant financial commitment required for long-term care and the diverse insurance solutions available. It also illustrates regional disparities in coverage length and care costs, guiding insurers and policymakers in addressing gaps in long-term care funding and planning.