Americans clueless about paying for long-term care

Even as long-term care costs skyrocket, many Americans have unrealistic plans for how they expect to pay for those services, according to a new survey from the LIFE Foundation.
DEC 02, 2009
Even as long-term care costs skyrocket, many Americans have unrealistic plans for how they expect to pay for those services, according to a new survey from the LIFE Foundation. An online poll of 1,000 American adults revealed that only 10% of those surveyed would turn to long-term-care insurance if they needed help paying for assistance with the basic activities of daily living, including bathing, eating and dressing. The study, performed between Oct. 28 and Nov. 3, coincided with LIFE's Long-Term Care Awareness Month in November. Nearly a quarter of those polled said they would look to family and friends to help chip in for those costs, while another 13% said they'd use their savings. Eleven percent of the individuals polled indicated they'd use their Social Security benefits. Many Americans also have misconceptions on which entitlement programs cover long-term care needs. For instance, 16% of those polled thought they could use Medicare to help pay for long-term care services, while another 7% thought Medicaid would give them some coverage. Medicare, however, only covers certain conditions. It covers the first 20 days in a skilled nursing facility after a hospital stay of at least three-days. It will also cover patients who are homebound under a doctor's care or those who are terminally ill and under hospice care. Medicaid, for lower-income individuals, pays for long-term care, but users whose assets exceed the requirements need to deplete their holdings — the so-called Medicaid spend-down–—so that they're poor enough to qualify. Another 20% of those surveyed mistakenly thought that health insurance would pay for long-term-care needs. That coverage only pays for medical services. The median annual rate of a private room in a nursing home is $74,208, according to Genworth Financial Inc.'s “Cost of Care” survey. Meanwhile the median annual cost of home care with a Medicare-certified home health aide hit $105,751. Homemaker services, which provide non-medical help with basic tasks, was the least expensive of all the services, coming in at an average median annual expense of $38,896.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.