Ah, ok. I get it.
So...regular health insurance for most U.S. retirees is covered by Medicare. As you probably know, although many health expenses are covered by Medicare, there are several gaps in coverage. Dental is the biggest one most people deal with in early retirement. Long term care coverage is the other (Medicare pays only for a short period of care following hospitalization).
B/C long term care is staggeringly expensive, most retirees in the U.S. can't hope to pay for more than a few months of such care (e.g., at home care or nursing home care) out of pocket (after all, most Americans retire with very little in retirement savings even setting aside the potential for LTC). So for those people that require LTC and cannot pay, the options are to pay with LTC insurance (if you have it) or to pay for LTC out of pocket until you become impoverished, at which point you can qualify for MedicAID and that will pay for LTC (there are rules about qualification that allow, e.g., a remaining spouse to keep a car, remain living in the house, and keep a very small amount of cash...I think a couple thousand...the state takes the house after the remaining spouse's death).
The rough rule of thumb for who should buy LTC insurance used to be: If you have >2 million in assets at the time you are likely to need it, you can probably afford to pay out of pocket. If you have less than 2 million, AND you can reasonably afford coverage, it might be a good idea to buy it. If you are a more typical American, with less than 500K of retirement savings and not a lot extra cash to pay for insurance, you can expect to have to impoverish yourself at the end of life to get care.
For most people, the $ trade-off of when to get coverage usually fell sometime in their 50s. However, over the years LTC insurance has become harder to qualify for (I do not qualify b/c of preexisting conditions, but DH qualified in his mid-50s through work, at a cost of ~130$/mo), much more expensive, AND less generous in terms of coverage.
We bought it for my husband b/c he is the primary earner and is 10 years older than I, so I would be in trouble if he required LTC. I am younger, and uninsurable at any reasonable price, but also less healthy. I am planning on continuing to work beyond what our FI state would require to keep building savings partly to offset this risk. But if I were to require LTC after he is dead, I would presumably spend down my estate as necessary.
There have been tons of threads on this forum where people argue about it. Younger people seem inclined to poo-poo this risk (possibly b/c they haven't yet had to deal with parents or gparents in LTC). Others, like me, have seen grandparents linger for close to 10 years in LTC and think it's a very real risk. Some people have chronic debilitating illnesses or dementia in their families and don't dare wait to try to qualify for LTC for fear they will wait too long.
Unfortunately, you have to look very carefully at your family history and risk factors, the size of your expected pension (if big enough, it could disqualify you from ever being able to qualify for Medicaid), cost to you versus how long you could expect to be alternatively investing that premium money, what exactly the coverage is, etc.
It's a real challenge. Perhaps some people who have tackled this at a younger age might weigh in.
