Last week, I shared with you a link to a report that I found online from the from the Leonard Davis Institute for Health Economics.  Since I’m on an AI kick, I asked Copilot to summarize the information presented in the report and present it in a blog format with the intended audience being financial advisors. 

Full disclosure – I have manually edited some portions.  Those editorial adjustments will be in italics and underlined.

Here is what is says …

The Long-Term Care Crisis Is a Financial Planning Crisis — And Advisors Need to Lead the Conversation

Long-term care (LTC) isn’t just a health issue. It’s one of the most significant financial risks your clients will face in retirement — and most are dramatically underprepared.

The data is blunt: 70% of older adults will need long-term support & services of some type (more accurately 54% will meet the criteria to qualify for a policy to pay benefits), and a typical 65-year-old will incur $135,000 according to Milliman in paid LTC expenses over their lifetime. About 15% will spend more than $250,000 (according to Vanguard).  Families pay roughly one-third of these costs out of pocket (according to Department of Health & Human Services).

For financial advisors, this isn’t a peripheral planning topic. It’s central to retirement security, wealth preservation, and intergenerational planning.

And yet, most clients don’t have a strategy.  (Sounds like what I have been telling you for years.)

The Uninsured Risk That Can Derail Even Strong Plans

Long-term care is the largest uninsured expense most Americans will ever face. Traditional health insurance doesn’t cover it. Medicare doesn’t cover custodial care. Private LTC insurance has shrunk to a niche market.

Clients often assume Medicare will step in — until they learn it only covers:

• Up to 100 days of skilled nursing care after hospitalization
• Intermittent skilled home health care
• Limited supplemental benefits through Medicare Advantage

The care clients actually need — help with bathing, dressing, eating, mobility — is not covered.

This gap is where financial plans break.

The Hidden Cost: Family Caregiving

When clients don’t have a plan, their families become the plan.

About 80% of long-term care is provided by unpaid caregivers. (according to longtermcare.gov)

The financial consequences are staggering:

• Financial losses over a lifetime for caregivers who reduce work hours or leave the workforce are between $304,000 and $324,000 according the National Institute of Health.
• The economic value of unpaid caregiving in the U.S. exceeds $1.1 trillion annually, according to analyses from the National Partnership for Women & Families.

For advisors, this means LTC planning isn’t just about the client — it’s about protecting their children’s financial future too. (I would believe that it is about protecting their advisory business as well.)

Why Advisors Must Lead the LTC Conversation

Clients are uncomfortable, emotional, and complex – leading the LTC discussion generally does not start with clients asking. Advisors who avoid the topic leave clients exposed to:

• Portfolio depletion
• Forced liquidation of assets
• Family conflict
• Unplanned Medicaid spend-down
• Loss of independence and choice

Advisors who do initiate the conversation differentiate themselves immediately. LTC planning is one of the clearest ways to demonstrate holistic, fiduciary-level care.

How Advisors Can Turn LTC Risk into a Planning Opportunity

1. Start the conversation early — ideally in clients’ 50s

This is when insurance options are most affordable and underwriting is more favorable.

2. Quantify the risk (This is a debatable approach but having data to support the discussion does not hurt.)

Use real numbers:

• $78,000/year for home health aides
• $71,000/year for assisted living
• $111,000/year for nursing homes

Clients respond to specifics.

3. Evaluate all funding pathways

• Hybrid LTC policies
• Traditional LTC insurance
• Health Savings Accounts (HSAs)
• Home equity strategies
• Self-funding with guardrails
• Medicaid planning for specific cases

4. Protect caregivers

Discuss the financial impact on adult children. This reframes LTC planning as family planning.

5. Integrate LTC into retirement income planning

Sequence-of-returns risk becomes far more dangerous when LTC expenses hit during market downturns.

The Advisor’s Role Has Never Been More Important

Long-term care is not just a health issue — it’s a wealth issue, a family issue, and a longevity issue. The current system leaves middle-class families exposed, and the private market alone cannot solve the problem. (I would argue that it is an issue that we all face regardless of wealth.)

Clients need guidance. They need clarity. They need a plan.

And financial advisors are the professionals best positioned to provide it.

Now, it is time to do our job!