Long-Term Care: A Discrepancy between Perception and Reality
A few statistics go a long way in revealing the mindset of Americans toward long-term care. According to The American Health Care Association, 76 percent of Americans do not expect to need long-term care. This belief can be affected by a variety of factors, including a feeling of immortality or the assumption that family will take the responsibility of caring for an elderly adult.
However, The New England Journal of Medicine estimates that 43 percent of people who turned 65 in 1990 could expect to spend time in a nursing home during their lifetime. Of that number, 21 percent will spend five or more years in a nursing home. As another way of looking at it, seven out of 10 couples will see one partner go into a nursing home. Of course, these numbers stand in marked contrast to the vast majority who believes it will never live with the assistance of a nursing facility.
Now let’s look at the financial impact of a nursing home stay. In 1997, $82.8 billion was spent on nursing home care. Medicare paid 12 percent of that total, while 31 percent was paid out-of-pocket by patients. With the current average annual cost of nursing home care now standing at $40,000, that would mean that the patient and his or her family would pick up a bill of $3,333 per month for long-term care expenses. Since many people do not prepare for the expenses, it’s not hard to see why more than half the couples who see one spouse go into a nursing home are reduced to the poverty level. The harsh reality of long-term care expenses, coupled with the fact that the 65-and-up age group is the fastest-growing segment of the population, means that the need for long-term care insurance is increasing. Long-term care insurance is not always appropriate for everyone, but generally those 65 and older are well served by having a policy in place that would prevent adverse economic effects from being visited on your family or other loved ones.
Certain groups of people should give special consideration to obtaining long-term care coverage. The first is women, who currently make up 75 percent of the over-65 nursing home population. Since women live an average of 5 to 7 years longer than men, they are more likely to require long-term care for an extended period of time.
Another group who may want to consider the benefits of long-term care insurance is the children of aging parents. If nursing home care is ever needed, children can ensure quality care for their parents, and avoid the time, money and emotional demands of caring for an aging parent themselves.
Those with a family history of debilitating illnesses such as Alzheimer’s or strokes should also consider purchasing a long-term care policy, for obvious reasons. As the Baby Boom generation nears retirement and improving health care leads to lengthening life expectancies, long-term care will continue to be a topic on many people’s minds. To ensure quality care for you, your spouse or family members during the twilight years without incurring a financial burden, long-term care insurance offers an attractive solution.
Check out our reports on:
Long Term Care information from Insurance Marketplace Standards Association