Bedrock Investment Advisors understands your benefits and can help you with your goals.

Without FLTCIP, You’ll Need a New Plan for Long-Term Care—Or Risk Large Out-of-Pocket Expenses Later

Missy E
November 14, 2025

Key Takeaways

With the Federal Long Term Care Insurance Program (FLTCIP) frozen for new enrollees as of 2022 and still unavailable in 2025, you need to consider other ways to protect yourself from potentially devastating long-term care costs.
Planning now—whether through financial strategies, hybrid insurance products, or family arrangements—can help you avoid a major financial burden during retirement.

Why Long-Term Care Planning Matters More Than Ever

You may have spent decades building a retirement nest egg

. But all it takes is a few years of needing long-term care—either in a nursing home, assisted living, or at home—to unravel your financial stability. In 2025, long-term care costs continue to rise faster than inflation:

Nursing home care now often exceeds $100,000 annually.
Assisted living facilities can cost over $50,000 per year.
In-home care averages $25 to $35 per hour, depending on the level of assistance.

As a government employee or retiree, you may have relied on FLTCIP as a long-term care insurance option. But with the program suspended for new applicants since December 2022, you need to reevaluate your risk exposure and develop a new plan now.

FLTCIP’s Frozen Status in 2025

The U.S. Office of Personnel Management (OPM) suspended FLTCIP enrollment starting in 2022 due to concerns about sustainability and premium volatility. As of mid-2025, this freeze remains in effect:

No new applications are accepted.
Current enrollees continue to be covered.
No reopen date has been announced, and OPM has not indicated whether a revised version will return.

If you missed your chance to enroll before the freeze, you must look elsewhere to protect your retirement savings from long-term care expenses.

Understanding What Medicare and FEHB Don’t Cover

A common misconception is that Medicare or your Federal Employees Health Benefits (FEHB) plan will pay for long-term care. In reality:

Medicare only covers short-term skilled nursing care, typically up to 100 days after a qualifying hospital stay.
FEHB plans may cover limited home health services, but not ongoing custodial care.

That means if you need help with daily living activities—like bathing, dressing, eating, or using the restroom—you’ll be paying out of pocket unless you have a long-term care plan in place.

Who Needs Long-Term Care Planning?

You might think long-term care is only something to worry about in your 80s. But the truth is:

70% of people turning 65 today will require long-term care services at some point.
Women typically need care longer due to greater life expectancy.
Chronic illnesses, injuries, and cognitive decline can affect anyone, regardless of age.

The earlier you start planning, the more options you’ll have.

Alternative Strategies for Government Employees in 2025

While FLTCIP is closed to new enrollees, other financial and planning strategies can help you prepare:

1. Self-Funding with a Long-Term Care Reserve

You may choose to earmark part of your Thrift Savings Plan (TSP), IRA, or other retirement funds to cover future care costs. This strategy requires disciplined savings and realistic cost forecasting.

Build a dedicated fund just for long-term care, separate from your general retirement budget.
Adjust for inflation and potential longevity.
Estimate $250,000 or more as a benchmark if planning for multiple years of care.

2. Hybrid Life Insurance with LTC Benefits

While traditional long-term care insurance has become harder to access and more expensive, some hybrid life insurance policies offer long-term care benefits if needed, or a death benefit if not used.

These plans typically require upfront or structured premiums and may have underwriting requirements. However, they are not part of FLTCIP and may be offered through private agents.

3. Health Savings Accounts (HSAs)

If you’re still employed and enrolled in a high-deductible health plan (HDHP), an HSA is one of the most tax-advantaged tools you can use. In 2025:

HSA contribution limits are $4,300 for self-only and $8,550 for family coverage, with an extra $1,000 if you’re 55+.
You can use HSA funds tax-free for qualified long-term care services and premiums (up to IRS limits).
After age 65, you can use HSA funds for any purpose—though only qualified medical expenses are tax-free.

4. Irrevocable Trusts and Medicaid Planning

For those willing to explore estate planning strategies:

Irrevocable Medicaid Asset Protection Trusts (MAPTs) can shield assets if created at least five years before you apply for Medicaid.
This option may allow you to qualify for Medicaid-covered long-term care without spending down all your assets.
It requires working with an elder law attorney and careful timing.

5. Family-Based Support Plans

Some families plan to provide care themselves or pool resources to pay for a loved one’s care. If this is your plan:

Have honest conversations early with family members.
Put legal documents in place, such as powers of attorney and care agreements.
Recognize the emotional and financial toll this can take on caregivers.

Long-Term Care Insurance Outside FLTCIP

While you cannot enroll in FLTCIP in 2025, other long-term care insurance policies still exist in the private market. These vary widely in terms of:

Eligibility and underwriting
Daily or monthly benefit limits
Benefit periods (e.g., 2 years, 5 years, lifetime)
Inflation protection options

You must carefully evaluate these products and consider how they align with your financial situation, health history, and family needs. Since prices and features vary, consulting a licensed agent listed on this website is essential.

Key Timelines and Milestones to Consider

To create a sound long-term care plan, keep these timelines in mind:

Age 50–60: Ideal time to start planning, while premiums are lower and health is better.
Age 62: Consider how Social Security claiming strategies align with care planning.
Age 65: Medicare begins, but you’ll also want to reassess your long-term care funding plan.
Within 5 years of needing care: Medicaid planning tools like trusts must be in place by now to avoid disqualification.

Mistakes to Avoid in 2025

When creating your plan, watch for these common missteps:

Waiting too long: Delaying until health issues arise can eliminate key options.
Over-relying on Medicare or FEHB: These do not provide long-term care coverage.
Underestimating costs: Inflation and regional pricing differences can lead to shortfalls.
Ignoring spousal needs: If you’re married, plan for both your care needs, not just one.

Steps You Can Take Right Now

If you haven’t started planning for long-term care, 2025 is the year to act. Here’s what you can do today:

Assess your potential risk based on family history and current health.
Calculate how much long-term care could cost in your preferred location.
Review your retirement accounts to determine what could be allocated for care.
Talk to a licensed agent to explore policy options and hybrid solutions.
Meet with an estate or elder law attorney to learn about trust-based strategies.
Discuss plans with your family to set realistic expectations.

Rethinking Long-Term Care Without FLTCIP

The freeze on new FLTCIP enrollment has left a gap in the retirement planning landscape for many public sector employees. But the absence of that program doesn’t leave you without options. Whether you self-fund, explore alternative insurance, or develop a legal and family support structure, planning now can prevent hardship later.

Long-term care planning is no longer optional—it’s essential. Talk with a licensed agent listed on this website to ensure your retirement isn’t derailed by avoidable expenses.