American adults fear long-term care costs, but not enough to save money to pay for them, according to the results of a survey by insurance company Genworth.
The survey of 1,200 adults, conducted between July and September, found that only 20% of adults have taken any action toward financing their long-term care expenses, and only half plan to take personal financial responsibility for their own care as they age.
Some of the inaction can be explained by additional survey findings, Genworth said. For instance, two out of three adults expect government programs to partially or fully cover the costs of their long-term care services (which will not necessarily be the case), and yet 45% of respondents either confused Medicare for Medicaid or said they didn’t know the difference between the two programs.
“Operators of assisted living and memory care communities are in a unique position to help educate future residents about what long-term care services Medicare and Medicaid cover and under what circumstances, as well as impress upon their families the importance of sitting down with a financial professional and developing a plan to pay for their care, should they need it,” Genworth spokesperson Julie Westermann told McKnight’s Senior Living. “With all of the pressure on funding for government programs, it’s important for consumers not to assume those benefits will be there for them when they need care.”
Frightening for senior living operators may be that baby boomers, the oldest of whom are 71, were the least likely of those surveyed to think they will need long-term care services at some point (52% compared with 64% for millennials and 65% for members of Generation X). And members of Gen X, the oldest of whom are 52, were the mostly likely not to have taken any action toward paying for future long-term care expenses.
The good news, however, is that millennials appear to be the most likely to have taken such action, and they were the most likely not to expect the government to cover any part of their long-term care services of any generation surveyed.
“Operators … may want to consider targeting millennials to encourage them to start the conversation with their parents about how they will pay for care,” Westermann said. “After all, the burden of caring for their parents is likely to fall on their shoulders at some point in the future.”
Financial solutions, she added, include traditional long-term care insurance and combination products such as life insurance policies with accelerated benefits riders that can be used to pay for care.
“For older, less healthy people who do not have long-term care insurance and find themselves in immediate need of care, several carriers also offer a medically underwritten, single premium immediate annuity that they or their children can purchase to convert the care recipient’s assets into guaranteed, monthly income that begins immediately and is paid for the rest of the care recipient’s life,” she said. “The income can be used for any purpose, including care, medical or living expenses.”
