Long-Term Care Insurance, New Jersey Elder Law

Most New Jersey families underestimate the financial impact of long-term care until the moment it becomes unavoidable. Nursing home care in New Jersey now costs upward of $12,000 per month at many facilities, and Medicare covers almost none of it. Without a plan, those costs come directly from savings, retirement accounts, and the family home, often within a few years.

Long-term care insurance is one of the most effective tools available to protect against that outcome. But it only works if it’s purchased while you’re still healthy enough to qualify, and it works best when it’s coordinated with your broader estate plan, including your Medicaid planning and trust structure. Benjamin D. Eckman, Esq. has focused his practice entirely on elder law and estate planning in New Jersey for more than 25 years, helping Union, Hackensack, and Wayne-area families make these decisions before a crisis forces them. Call the Law Firm of Benjamin Eckman at (908) 206-1000 to discuss your options today.

Who Should Be Thinking About Long-Term Care Insurance?

You should be evaluating long-term care insurance if you are between 50 and 70 years old, still in reasonably good health, and want to protect your assets and your family from the financial impact of a future nursing home or assisted living admission. This service is for New Jersey families across Union, Bergen, and Passaic Counties, including residents of Union, Hackensack, Wayne, Westfield, Ridgewood, and Paramus, who want to build a long-term care plan before a health crisis removes the option. It is also for families reviewing an existing policy to confirm it still provides adequate coverage, and for couples who want to understand how long-term care insurance interacts with Medicaid eligibility and the five-year look-back period.

What Long-Term Care Insurance Covers

Long-term care insurance pays for services that help you with daily living activities when illness, injury, or cognitive decline makes it difficult to manage on your own. A well-structured policy can cover:

• Nursing home care, skilled nursing facility costs, which in New Jersey exceed $500 per day at many facilities
• Assisted living, residential care that provides support with daily activities without full nursing home admission
• Memory care, specialized care for Alzheimer’s disease and other forms of dementia
• Home health care, licensed aides and therapists who provide care in your own home
• Adult day services, structured programs that provide care and supervision during daytime hours

The scope of coverage depends on the specific policy. Daily or monthly benefit amounts, the elimination period before benefits begin, the length of the benefit period, and whether the policy includes an inflation protection rider all affect what the policy pays and for how long.

How Long-Term Care Insurance Works With Medicaid

Long-term care insurance and Medicaid are not competing options, for most New Jersey families, they work together. Understanding how they connect changes the way you should think about both.

The Medicaid spend-down problem

New Jersey Medicaid covers long-term nursing home care for people who meet strict income and asset limits. In 2025, an individual applicant must reduce countable assets to $2,000 or less before Medicaid begins paying. For a married couple, the community spouse may keep between $31,584 and $157,920 under the Community Spouse Resource Allowance. Everything above those limits must be spent on care before Medicaid steps in.

Long-term care insurance reduces or eliminates that spend-down. When a policy is paying $200 or $300 per day toward nursing home costs, the family’s own assets are depleted far more slowly, or not at all. For couples, that means the community spouse keeps more. For single individuals, it can mean the difference between preserving an inheritance for children and spending everything before Medicaid eligibility is reached.

The five-year look-back and why timing matters

New Jersey Medicaid reviews all financial transactions for the 60 months before an application date. Any asset transferred for less than fair market value within that window may trigger a penalty period, calculated at $402.74 per day as of April 1, 2025. A family that waits until a health crisis to start planning may find that their options are severely limited.

Long-term care insurance bought years in advance creates a different planning environment. When adequate coverage is in place, the urgency to transfer assets before the look-back window closes is reduced. The policy is paying the bills, the family’s assets remain intact, and the five-year clock can run without the pressure of a simultaneous spend-down.

How long-term care insurance interacts with irrevocable trusts

A Medicaid Asset Protection Trust removes assets from the Medicaid count, but only after five years have passed since the transfer. During that five-year window, those assets are still exposed if a nursing home admission occurs. Long-term care insurance effectively covers that exposure period. A family that funds a Medicaid Asset Protection Trust and simultaneously holds a long-term care insurance policy has addressed both the short-term and long-term risk. The trust protects assets after five years; the insurance protects against a crisis before those five years are up.

This is one of the most important planning combinations available to New Jersey families, and it’s one that requires coordinating the insurance decision with the estate plan, not treating them as separate decisions made at different times.

How Long-Term Care Insurance Fits Into Your Estate Plan

Long-term care insurance is not just a financial product, it’s a legal and estate planning tool. How it’s structured, when it’s purchased, and how it interacts with your trust documents and beneficiary designations affects your overall plan in ways that a standalone insurance agent may not address.

Trusts and taxes

For families using irrevocable trusts as part of their Medicaid planning, the trust document should account for the existence of long-term care insurance proceeds. In some structures, the trust holds assets while the insurance policy covers care costs directly, keeping the trust intact for its intended purpose. In others, the coordination is less explicit and can create gaps.

New Jersey still imposes an inheritance tax on certain beneficiaries. Class A beneficiaries, spouses, children, grandchildren, and parents, are fully exempt. Under regulation amendments effective December 15, 2025, the Class A category now expressly includes non-biological children conceived through assisted reproductive technology. For families coordinating long-term care insurance with a broader estate plan, understanding how policy proceeds and remaining assets will be taxed at death is part of getting the full picture right. For more detail, see the firm’s article on New Jersey inheritance tax.

Revocable vs. irrevocable trusts

A revocable living trust handles probate avoidance and incapacity planning but offers no Medicaid protection. An irrevocable Medicaid Asset Protection Trust removes assets from the Medicaid count after five years but requires giving up direct control. Long-term care insurance makes the irrevocable trust strategy more viable by covering the gap period, the five years between when the trust is funded and when those assets are fully protected from Medicaid.

For families who haven’t yet made trust decisions, the long-term care insurance conversation and the trust conversation should happen together. The right combination depends on your assets, your health, your age, and how much risk you’re willing to carry during the look-back window.

What Affects the Cost of Long-Term Care Insurance

The premium you’ll pay for long-term care insurance depends on several factors. Understanding them helps you evaluate policies accurately and make decisions that hold up over time.

Age at purchase. Premiums are significantly lower when a policy is purchased in your fifties than in your late sixties. Waiting until a health issue arises may mean being declined coverage entirely. The earlier a policy is purchased, the lower the lifetime cost.

Health at application. Underwriting for long-term care insurance is medical. Pre-existing conditions, including diabetes, heart disease, certain cancers, and cognitive impairment, can result in higher premiums, modified coverage, or denial. A policy cannot be purchased after a diagnosis of dementia or Alzheimer’s disease.

Daily or monthly benefit amount. The higher the daily benefit, the higher the premium. New Jersey nursing home costs vary significantly, a policy that covers $200 per day may leave a meaningful gap at facilities charging $450 or more.

Benefit period. Policies typically offer benefit periods of two, three, or five years, or unlimited coverage. The average long-term care stay in the United States is approximately three years, but individual situations vary widely.

Elimination period. This is the waiting period before benefits begin, typically 30, 60, or 90 days. A longer elimination period lowers the premium but means more out-of-pocket costs at the start of a claim.

Inflation protection. A policy purchased today at $200 per day will cover far less in 15 years without an inflation rider. Compound inflation protection increases the benefit amount annually and is an important feature for younger buyers.

Important Rules and Decisions

Buy before a health event. Long-term care insurance cannot be purchased after a diagnosis of dementia, Alzheimer’s disease, or many other serious conditions. Once a significant health event occurs, the window to qualify may close entirely. Acting while healthy is the only way to preserve the option.

Coordinate with Medicaid planning before purchasing. The benefit amount, elimination period, and benefit period you choose should reflect your overall Medicaid plan, not just your insurance budget. A policy with a 90-day elimination period means 90 days of private pay before benefits begin; if your assets are already in an irrevocable trust, that gap needs to be covered from somewhere.

Review existing policies. If you already hold a long-term care insurance policy, confirm that the benefit amount still reflects current New Jersey nursing home costs. A policy purchased 15 years ago at $150 per day may cover less than half of today’s daily rates at Union County or Bergen County facilities without an adequate inflation rider.

New Jersey Partnership Program. New Jersey participates in the Long-Term Care Partnership Program, which allows policyholders who exhaust qualified partnership policies to apply for Medicaid while keeping additional assets equal to the amount the policy paid out. This is a meaningful benefit that changes the Medicaid calculation for families with qualifying policies.

What Happens After You Call

Your First Conversation

The initial call covers your situation: your age, current health, the assets you want to protect, and whether you’ve done any prior Medicaid or trust planning. You leave that conversation with a clear picture of where long-term care insurance fits in your overall plan, and whether the timing is right to move forward.

Coordinating Insurance With Your Estate Plan

Attorney Eckman reviews your existing estate planning documents, will, trust, power of attorney, beneficiary designations, alongside the long-term care insurance question. The goal is to make sure these pieces work together. A long-term care policy that doesn’t account for an existing irrevocable trust, or a trust that doesn’t account for insurance proceeds, can create gaps that planning in silos misses entirely.

Medicaid Planning and Look-Back Analysis

For families who haven’t yet addressed the five-year look-back, the long-term care insurance conversation often leads directly into a broader Medicaid planning discussion. Attorney Eckman identifies where assets are exposed, whether a Medicaid Asset Protection Trust makes sense, and how long-term care insurance fits into the overall protection strategy.

Ongoing Guidance

Estate plans and insurance needs change over time. Attorney Eckman’s clients have access to ongoing guidance as family circumstances, health conditions, and New Jersey Medicaid rules evolve. When rules change, as they do every year, clients working with a dedicated elder law attorney stay current without having to track the changes themselves.

Key Takeaways

• Long-term care insurance is most effective when purchased in your fifties or early sixties, before a health event makes coverage unavailable or prohibitively expensive.
• A well-structured long-term care policy reduces or eliminates the Medicaid spend-down, protects the community spouse’s assets, and covers the five-year gap period while a Medicaid Asset Protection Trust matures.
• New Jersey’s 2025 penalty divisor is $402.74 per day, a $100,000 transfer inside the look-back window results in approximately 248 days of Medicaid ineligibility during which the family pays out of pocket.
• New Jersey participates in the Long-Term Care Partnership Program, which allows policyholders with qualifying policies to protect additional assets when applying for Medicaid.
• Long-term care insurance decisions should be coordinated with trust planning and Medicaid strategy, not made in isolation from the rest of the estate plan.

Proven Results and Client Experience

Benjamin D. Eckman has focused his legal practice on elder law and estate planning in New Jersey for more than 25 years. He has lectured on Medicaid planning and long-term care to nursing facilities, professional associations, and senior groups throughout New Jersey, and has authored articles on elder law topics published in newspapers and legal journals.

Mr. Eckman is licensed in both New Jersey and New York, and holds memberships in the New Jersey State Bar Association’s Elder Law Section and Real Property, Probate and Trust Section, the Union County Bar Association, the Passaic County Bar Association, and the Bergen County Bar Association. He earned his J.D. from Seton Hall University School of Law and his B.A. in Business and Accounting from Touro College.

Common Questions About Long-Term Care Insurance in New Jersey

When is the right time to buy long-term care insurance?

The right time is while you are still in good health, typically between ages 50 and 65. Premiums are lowest when purchased early, and underwriting requirements mean that many conditions developed later in life, including cognitive impairment, can disqualify an applicant entirely. Waiting until care is needed is not an option; coverage must be in place before a claim arises.

Does long-term care insurance affect Medicaid eligibility?

Yes, in a meaningful way. When a long-term care policy is paying benefits, the family’s own assets are spent more slowly, or preserved entirely. This reduces the amount that needs to be spent down before Medicaid eligibility is reached and can protect the community spouse’s full resource allowance. New Jersey’s Long-Term Care Partnership Program also allows qualifying policyholders to protect additional assets dollar-for-dollar equal to what the policy paid out.

Does a long-term care policy replace Medicaid planning?

No. Long-term care insurance and Medicaid planning serve complementary roles. Insurance covers costs in the near term and during the look-back window; Medicaid planning, including Medicaid Asset Protection Trusts, protects assets over the long term. Families with substantial assets typically benefit from coordinating both rather than relying on either alone.

What happens if I already have a long-term care policy?

If you already hold a policy, confirm that the daily or monthly benefit still reflects current New Jersey nursing home costs, which exceed $500 per day at many facilities. A policy purchased more than a decade ago without an adequate inflation rider may cover a fraction of today’s actual costs. Attorney Eckman can review your existing policy alongside your current estate plan to identify any gaps.

Can long-term care insurance cover home care?

Most modern long-term care policies cover home health care in addition to nursing home and assisted living costs. This is an important feature, many families prefer to remain at home for as long as possible, and home care costs in New Jersey are substantial. Confirm that any policy you’re evaluating includes home care coverage and review the benefit triggers carefully.

How does long-term care insurance work with a Medicaid Asset Protection Trust?

A Medicaid Asset Protection Trust removes assets from the Medicaid count, but only after five years have passed since funding. During that window, if a nursing home admission occurs, those assets may still be exposed. Long-term care insurance covers that gap period. Together, the trust and the policy provide more complete protection than either does alone: the insurance pays during the look-back window, and the trust protects assets once five years have passed.

What is the New Jersey Long-Term Care Partnership Program?

New Jersey’s Long-Term Care Partnership Program allows residents who purchase a qualifying long-term care insurance policy to protect assets equal to the amount the policy pays out, in addition to the standard Medicaid asset limits. For example, if a qualifying policy pays out $200,000 in benefits, the policyholder can keep an additional $200,000 in assets and still qualify for Medicaid. This is a significant benefit that changes the Medicaid planning calculation for families with qualifying policies.

What if I can’t afford long-term care insurance premiums?

If traditional long-term care insurance is cost-prohibitive, there are alternatives worth evaluating, including hybrid life insurance policies with long-term care riders and short-term care policies that cover the elimination period of a longer plan. There is also the option of coordinating Medicaid planning more aggressively through trust strategies that don’t rely on insurance. Attorney Eckman can walk through the full range of options and help identify the approach that fits your financial situation.

Areas We Serve

The Law Firm of Benjamin Eckman assists New Jersey families with long-term care insurance planning and coordination from offices in Union, Hackensack, and Wayne. The Union office on Morris Avenue serves families throughout Union County, including Westfield, Cranford, Linden, Elizabeth, and Springfield. The Hackensack office at University Plaza Drive serves Bergen County families from Ridgewood, Paramus, Teaneck, Fort Lee, and Englewood. The Wayne office near Mt. View Boulevard serves Passaic County families from Clifton, Totowa, Little Falls, and Paterson.

Schedule a Consultation About Long-Term Care Insurance in New Jersey

Long-term care insurance decisions are most valuable when they’re made early and coordinated with the rest of your estate plan. Call the Law Firm of Benjamin Eckman at (908) 206-1000 to schedule your consultation. Calls are returned within one business day. You can also book a call online.

The right time to have this conversation is before a health event makes coverage unavailable, not after.

Other Elder Law Services We Offer

• Elder Law Services in New Jersey – Overview of all elder law services for Union, Bergen, and Passaic County families.
• Medicaid Applications in New Jersey – Eligibility, asset limits, the five-year look-back, and how to build an application that gets approved.
• Medicaid Crisis Planning – Legal strategies for families facing an immediate nursing home admission without advance planning in place.
• Trust Attorney in Union, NJ – Revocable and irrevocable trust planning coordinated with your Medicaid and long-term care strategy.
• Asset Protection – Legal strategies to protect your home and savings from nursing home costs and estate recovery.
• Nursing Home Law and Litigation – Know your rights when selecting and dealing with a New Jersey nursing facility.

Most Americans will need long-term care, including a surprising 40 percent under the age of 65. Without proper planning, including the purchase of a long-term care insurance policy, these costs will devastate you and your family.  Yet most people do not prepare or plan for an event that will strike over 75 percent of people over the age of 70. Typically, people over 70 will declare bankruptcy when the long-term care exceeds six months. It’s not surprising with the average cost of nursing home care exceeding $100,000.00 and the length of stay in a nursing home averaging three years.

There are 3 primary ways to pay for long term care, Medicaid, private pay and purchasing a Long-Term Care Insurance policy. The policy must be taken out before you get sick. It may not be as expensive as you think. Your cost is based on three factors: age, health and coverage (i.e. amount per day, length of payout, and rider(s) such as inflation factors).

Contact us today about the benefits of purchasing long-term care insurance policy and how it may factor into your estate planning. I assure you will not remember how much the premiums costs, but instead you will recall how much the policy saved you and your family.