Long-Term Care Planning in Maryland (2026): What It Costs, What Medicare Won't Pay, and What to Do While FLTCIP Is Suspended
Last reviewed: September 2026 · Educational, not individual advice
Someone turning 65 today has almost a 70% chance of needing some long-term care, and in Maryland a home health aide now runs about $80,000 a year, a private nursing-home room about $173,000. Medicare pays for almost none of it, and the federal program most of our clients assumed they would use, FLTCIP, has not accepted new applicants since December 2022. Here is how I walk a household through the decision.
If you are a Maryland, DC, or Virginia pre-retiree, especially a federal employee who planned to "get the government long-term care plan later," this guide covers what long-term care planning actually involves: how likely you are to need care and for how long, the 2025 Maryland cost survey, what Medicare, FEHB, and Medicaid really cover, the four ways to pay, the tax breaks that help, and what to do at each age. I use one hypothetical couple throughout so the numbers have a shape.
Educational only, not insurance, tax, or legal advice. Policy terms vary by carrier and state; confirm with the policy contract, your tax professional, and an elder-law attorney where noted.
What long-term care is (and is not)
Long-term care is help with the basic tasks of daily life when age, illness, or injury makes them hard. It is mostly non-medical. The standard measure is the six Activities of Daily Living (ADLs): bathing, dressing, using the toilet, transferring (bed to chair), continence, and eating. Most insurance policies pay when you cannot do two of the six without help, or when you have a cognitive impairment such as dementia. That "two-of-six" trigger comes from federal tax law (IRC section 7702B) and is the same test in a traditional policy, a hybrid policy, or a rider.
Care can be delivered at home by an aide, at an adult day center, in an assisted-living community, or in a nursing home. Most people start at home and move up the ladder as needs grow, which is why the cost of home care matters more than the nursing-home headline for the first years.
How likely are you to need long-term care, and for how long?
The federal Administration for Community Living publishes the numbers most planners use:
- About 70% of people turning 65 today will need some long-term care services in their remaining years.
- About one-third may never need it.
- 20% will need it for more than five years.
- Women need care for an average of 3.7 years; men for 2.2 years, because women tend to outlive their husbands and spend the last stretch without a spouse to help at home.
Two things follow. First, this is not a rare event you can dismiss. Second, the range is enormous: many people need a year of home help; a minority need a decade of full-time care. Planning for the average is not enough, because the average hides the cases that empty an estate.
What long-term care costs in Maryland (2025 survey)
The Genworth/CareScout Cost of Care Survey is the standard source. The 2025 survey (collected July–November 2025, released March 2026) gives these Maryland medians:
| Type of care | Maryland median (annual) | Maryland median (monthly) | National median (annual) |
|---|---|---|---|
| In-home caregiver (non-medical, $35/hour) | $80,080 | $6,673 | $80,080 |
| Adult day health care | $30,313 | $2,526 | $24,700 |
| Assisted living (private one-bedroom) | $85,980 | $7,165 | $74,400 |
| Nursing home, semi-private room | $155,125 | $12,927 | $114,975 |
| Nursing home, private room | $173,375 | $14,448 | $129,575 |
Maryland nursing-home costs run about 35% above the national median. Montgomery County and the Baltimore suburbs sit above the statewide figure; the Eastern Shore and Western Maryland below it. Costs have risen roughly 2%–5% a year, and the aide shortage keeps pressure on home-care rates.
What a full episode of care could cost
Multiply the average duration by today's Maryland medians and you get the numbers that belong in a retirement plan. These are current-dollar figures; a couple who is 60 now should assume 20 more years of inflation on top.
| Setting | Woman, 3.7 years | Man, 2.2 years |
|---|---|---|
| In-home caregiver | ≈ $296,000 | ≈ $176,000 |
| Assisted living | ≈ $318,000 | ≈ $189,000 |
| Nursing home, private room | ≈ $641,000 | ≈ $381,000 |
For a couple, the realistic planning case is not two nursing-home stays. It is one spouse cared for at home by the other for a year or two (cheap in dollars, expensive in health), then the surviving spouse, usually the wife, needing paid care for several years with no one at home to help. That second episode is the one that drains a portfolio.
What Medicare, FEHB, and Medicaid actually cover
Medicare does not pay for long-term care. It covers a skilled nursing facility only after a qualifying inpatient hospital stay of at least three days (observation status does not count), for up to 100 days per benefit period, and only while you need daily skilled care. In 2026 days 1–20 are covered in full after the Part A deductible, and days 21–100 carry a coinsurance of $217 a day. Custodial care, the help with bathing and dressing that makes up most long-term care, is excluded. Home health under Medicare is intermittent skilled care, not a daily aide. Our guide to what Medicare doesn't cover has the full list.
FEHB does not fill the gap. Federal health plans follow the same skilled-versus-custodial line. Keeping FEHB into retirement is valuable for many reasons, but it is not a long-term care plan.
Medicaid pays only after you have spent down. Maryland Medical Assistance for long-term care requires countable assets of $2,500 for a single applicant ($3,000 for a couple both applying), with a 60-month look-back on gifts and transfers. When one spouse needs care and the other stays home, federal spousal-impoverishment rules let the community spouse keep half of the couple's countable assets up to $162,660 in 2026 (minimum $32,532), plus the house and one car, and a monthly income allowance of at least $2,643.75. Medicaid also limits which facilities you can use and rarely pays for assisted living or full-time home care in Maryland. It is the safety net, not the plan. Anyone considering deliberate Medicaid planning should work with a Maryland elder-law attorney; the penalties for getting the look-back wrong are measured in months of care you pay for yourself.
Four ways to pay for long-term care
| Approach | How it works | Strengths | Watch for |
|---|---|---|---|
| Self-insure | Earmark part of the portfolio (or home equity) for care | No premiums, no underwriting, money stays yours if unused | Needs roughly $300,000–$650,000 per person at current Maryland costs; the money must stay liquid and out of the travel budget; a long claim can exhaust it |
| Traditional long-term care insurance | Annual premium buys a daily or monthly benefit for a set benefit period, usually with inflation protection | Most coverage per premium dollar; premiums may be tax-deductible; qualifies for Maryland's credit | Premiums are not guaranteed and have been raised on older policies; "use it or lose it"; medical underwriting gets harder after 60 |
| Hybrid life insurance with a long-term care rider | Permanent life policy; the death benefit can be drawn down early for qualified care (IRC 7702B rider), often with an extension-of-benefits option | Premiums guaranteed by contract; a death benefit if care is never needed; some policies pay cash indemnity rather than reimbursing receipts | Less care benefit per dollar than traditional coverage; large single or 10-pay premiums; a 101(g) "chronic illness" rider is not the same as a 7702B long-term care rider (it usually has no inflation protection and a permanence requirement) |
| Annuity with a long-term care rider, or a 1035 exchange | A deferred annuity whose withdrawals double or triple for qualified care; since the Pension Protection Act, gains used for qualified care come out tax-free, and an old non-qualified annuity or life policy can be exchanged tax-free into an LTC-qualified contract | Simplified underwriting; a way to repurpose an annuity you no longer need | Less care benefit per dollar than insurance; the rider's definition of care and elimination period matter; surrender charges on the new contract |
A few honest notes from client meetings. The traditional-versus-hybrid debate is mostly a question of what you value: a traditional policy buys the most care per dollar and a hybrid buys certainty about the premium and a benefit for the heirs. Neither is "better." Cash-indemnity riders, which pay a fixed monthly amount once you qualify, without receipts, are genuinely easier to use at claim time, and I weight that heavily for a surviving spouse who will be managing care alone. And every one of these products is sold on commission; ask how the person recommending one is paid, including us.
Federal employees: FLTCIP is suspended through December 19, 2026
The Federal Long Term Care Insurance Program stopped accepting new applications on December 19, 2022. OPM extended the suspension for a further 24 months from December 19, 2024, so it runs to December 19, 2026 unless OPM issues a new notice. Existing enrollees keep their coverage; new employees, retirees, and spouses cannot apply, and current enrollees cannot increase coverage. As of this writing OPM has not said whether the program will reopen, reprice, or close.
What this means in practice:
- Do not wait for FLTCIP to reopen as your plan. If it does, expect new pricing and new underwriting.
- The private market is open to federal employees on the same terms as anyone else. Underwriting is by health, not employer.
- A federal couple's strongest asset in this decision is often the FERS survivor annuity plus Social Security, which provides lifetime income to the surviving spouse. That income can cover part of a care bill, which reduces how much insurance or self-insurance you need. Our guide on how much a federal employee needs to retire covers the survivor-election trade-off, and the federal employees hub has the rest.
- If you already hold FLTCIP coverage, keep it unless a premium increase makes it unaffordable; you cannot get back in.
Tax breaks that help pay for care (2026)
Federal deduction for qualified long-term care premiums. Premiums for tax-qualified policies count as medical expenses up to an age-based cap, so they help only if you itemize and your medical expenses exceed 7.5% of AGI, or if you are self-employed. The 2026 caps from IRS Revenue Procedure 2025-32:
| Age at end of 2026 | Deductible premium limit |
|---|---|
| 40 or under | $500 |
| 41–50 | $930 |
| 51–60 | $1,860 |
| 61–70 | $4,960 |
| Over 70 | $6,200 |
HSA dollars. You can pay qualified long-term care premiums from a Health Savings Account, tax-free, up to the same age-based limits. For a federal employee in an HDHP with a large HSA balance, this is one of the better uses of the account after 65. See our HSA guide.
Maryland long-term care insurance credit. Maryland allows a one-time, nonrefundable credit of up to $500 per insured person (up to $480 if the insured is 40 or younger) for premiums paid on a qualified policy, claimed on Form 502CR, Part E. It can be claimed only once per insured, ever, and not if the person had long-term care coverage before July 1, 2000. Small, but real.
Benefits are generally tax-free. Payments from a tax-qualified policy are excluded from income, subject to a per-diem cap of $430 a day in 2026 for indemnity-style payments.
Planning by age: what to do now
Under 50: build the balance sheet. Premiums are cheap but the policy you would buy now may not match the care landscape in 35 years. Save aggressively in retirement accounts and a taxable account, keep an emergency fund, and revisit at 50. If a parent's care is already straining the family, that is a reason to look earlier.
50 to 65: decide. This is the window when underwriting is still favorable and premiums for a 30-year horizon are manageable. Get quotes on both a traditional policy and a hybrid, compare the benefit per dollar, and decide how much you would self-insure versus transfer. For federal employees, this is also when the survivor-annuity election and the TSP withdrawal plan should be designed with a care episode in mind.
65 and older: use what you have. New coverage is expensive or unavailable once health declines. The work shifts to positioning: earmark assets, decide which account pays for care first (a Roth or an inherited IRA drawn for care has different tax consequences from a traditional IRA), consider whether an existing annuity or cash-value life policy can be exchanged into an LTC-qualified contract, and put the legal documents in place: durable power of attorney, health-care directive, and a conversation with the children about who does what.
One hypothetical couple
Sam and Dan are composites, not clients: 59 and 62, Montgomery County, Sam a program director at NIH retiring in about two years, Dan a logistics manager. Sam assumed FLTCIP would be there at retirement. It is not. Their plan now: Sam elects the full FERS survivor annuity so Dan keeps lifetime income if Sam dies first; they earmark $250,000 of TSP and brokerage assets as a care reserve, which they will spend down for care in a deliberate order; and they price a joint hybrid policy with a cash-indemnity rider to cover the second, longer episode. The reserve plus the survivor income handles the first few years; the policy handles the tail. If the quotes come back too high, they raise the reserve and accept the risk. Either way it is a decision, not a hope.
If you want this modeled for your household, including the survivor-annuity and TSP pieces, book a call. Long-term care planning is part of our retirement planning service, and we review policy proposals from other firms as part of it.
FAQ: long-term care planning in Maryland
How much does long-term care cost in Maryland per month? In the 2025 CareScout survey, Maryland medians were about $6,673 a month for a home caregiver at 44 hours a week, $7,165 for assisted living, $12,927 for a semi-private nursing-home room, and $14,448 for a private room. The Baltimore and Washington suburbs run higher than the statewide figures, and costs have risen 2%–5% a year.
Does Medicare cover long-term care? No. Medicare covers a skilled nursing facility for up to 100 days per benefit period after a three-day inpatient hospital stay, with a $217 daily coinsurance for days 21–100 in 2026, and only while you need daily skilled care. It does not pay for custodial care, assisted living, or a daily home aide, which is most long-term care.
Can federal employees still enroll in FLTCIP in 2026? No. OPM suspended new applications on December 19, 2022 and extended the suspension through December 19, 2026. Current enrollees keep coverage but cannot increase it. Federal employees who want coverage now use the private market, where underwriting depends on health rather than employer, or self-insure with earmarked assets.
Is a hybrid long-term care policy better than traditional insurance? Neither is better for everyone. Traditional policies buy the most care per premium dollar but premiums can rise and unused coverage is lost. Hybrid life policies guarantee the premium and pay a death benefit if care is never needed, at a higher cost per dollar of care. Compare both on benefit per dollar and on how the claim is paid.
Is long-term care insurance tax-deductible in Maryland? Federally, qualified premiums count as medical expenses up to age-based 2026 limits ($4,960 at 61–70, $6,200 over 70) and can be paid from an HSA. Maryland adds a one-time credit of up to $500 per insured on Form 502CR, Part E. Benefits from a qualified policy are generally received tax-free.
Sources
- Administration for Community Living, How much care will you need?
- Genworth/CareScout, 2025 Cost of Care Survey and national release, March 2, 2026
- Medicare.gov, Skilled nursing facility care and Long-term care; CMS, 2026 Medicare Parts A & B premiums and deductibles
- OPM / LTCFEDS, FLTCIP application suspension notice
- IRS, Revenue Procedure 2025-32 (2026 long-term care limits) and Publication 969 (HSA); Notice 2011-68 (Pension Protection Act long-term care provisions)
- Maryland Comptroller, Form 502CR and instructions (2025); Md. Tax-General §10-718
- Maryland Department of Health, Medical Assistance income and asset limits; CMS, 2026 spousal impoverishment standards
Written by Danni Shen, CFA®, Co-Founder & Chief Investment Officer of Allset Wealth. Allset Wealth is a financial planning firm in Hunt Valley and North Bethesda, Maryland, serving federal employees, tech employees, and business owners across Maryland, DC, and Virginia.
This article is for educational and informational purposes only and does not constitute investment, tax, legal, or insurance advice. Insurance guarantees are subject to the claims-paying ability of the issuing company. Sam and Dan are hypothetical composites, not clients. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities and investment advisory services offered through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial. LPLE and LPL Financial are not affiliated with Allset Wealth.
