Most Boomers Have Poor Understanding of Long-Term Care Insurance
The generation that prided itself on being cutting edge when it came to change seems to have fallen behind when it comes to understanding long-term care. According to a survey from America’s Health Insurance Plans (AHIP), many Baby Boomers not only have mistaken ideas about who pays for long-term care services, but they also have not thought about protecting themselves with long-term care insurance.
The survey, conducted for AHIP by the marketing firm StrategyOne, uncovered the following data:
· Most Baby Boomers have not planned for long-term care expenses. Only one in four of those polled who were nearing age 60 said they were “very familiar” with long-term care insurance, and 41% said they had not had any discussions about long-term care in the past twelve months.
· While few Baby Boomers have coverage for long-term care expenses many mistakenly think that they do. In a separate survey from AARP, 29% of respondents age 45-plus said they had purchased long-term care insurance. In contrast, the National Association of Insurance Commissioners reported in 2005 that just 5.2 million Americans had long-term care insurance. Even if all of those covered were Boomers, this would mean that only 6.6% of the Boomer population of 78,000,000 is covered. However, since many of these policies protect individuals from previous generations, the percentage of covered Boomers must be even smaller. In addition, the Index of Long-Term Care Uninsured estimates that approximately 95% of those between the ages of 45 and 64 are uninsured for long-term care, a figure in stark comparison with Baby Boomers’ own characterization of their coverage.
· The majority of Baby Boomers think Medicare or “other health insurance” will pay for long-term care. More than half (54%) of Baby Boomers believe Medicare pays for long-term care services, and 44% believe “other health insurance” will pay. Yet, generally, neither Medicare nor other health insurance offers coverage for long-term care. Medicaid may cover long-term care services, but only after requiring individuals to spend down nearly all of their assets to qualify for assistance.