Baby Boomers–those born between 1946 and 1964–have been slow to embrace Long Term Care Insurance. Why?
I’m a tail-end boomer, born in 1959. Of anyone, I should be more inclined to seek Long Term Care Insurance (LTCI). My husband and I cared for my father in our home until he required skilled nursing care. He did not have LTCI. With this experience and my continued involvement, speaking, advocating for, and educating caregivers of people with dementia and Alzheimer’s, you might wonder why I’m not doing more to secure my own future.
Why haven’t we embraced LTCI?
Foremost on our minds is the weakened economy. Even though we’ll recover from this down cycle; the current times have cast clouds over the rays of sunshine that had uplifted our nation during the 2003 to 2005 growth period. Today, we’re trying to hold onto our dwindling savings amidst declining portfolio values and higher costs of goods, fuel, and groceries. Who expected that fuel costs would double in less than five years?
Second, despite the current economic woes and our current struggles, we boomers are a confident bunch. We believe with smart investing, we’ll recover and have sufficient assets to cover our expenses.
Furthermore, we believe we’re taking better care of ourselves. We intend to stay healthy into old age and plan to die before we require long term care. Even my father, a member of The Greatest Generation, felt this way. At age eighty-five, when I suggested he put together an estate plan, he didn’t think it was necessary because he planned to live another fifteen years. Then again, he was young, spirited, and energetic enough to have me come into this world on his forty-ninth birthday! Healthy for most of his life, the onset of dementia in his mid-eighties compromised his independence, resulting in him moving into our California home. Soon after, he required skilled nursing care. The four years of skilled care cost approximately $200,000. (Today, and depending on where you live, the costs may hover around $65,000 a year or about $130,000 for an average stay of two years.) Be careful of the estimates you read from the LTCI industry. They’re usually quoted 50% higher to scare us into action.
When we boomers see numbers like these, we don’t believe it’ll happen to us. Even the statistics bear this out. Most people will not require skilled nursing care–the most expensive of care options. And if we do, the current estimates (extrapolated from earlier data) point to an average stay of two years.
Fourth, and the most important in my opinion, we’re uncertain as to what kind of care options will be available when we require care. Even The Greatest Generation, who does not want to be a burden to their boomer children, is taking innovative steps. Those with sufficient assets are moving into upscale continuing care communities providing them assistance when they need it, in an atmosphere of luxury. Likewise, boomers are taking control and innovating. As a tail end boomer, I am the beneficiary of innovations made by leading edge boomers who are establishing aging-in-place communities, co-housing communities, or elderhoods. (See Changing Choices–Aging in Place in the 21st Century in the Summer 2008 issue of AgingWell.) I like to think that my husband (age fifty) and I (age forty nine) live in a similar type of community. We’re remodeling with the goal of staying put for the next thirty to forty years.
Consider also that the boomer generation has been the most adept at creating families of choice by selecting friends when voids appear due to estranged birth family relations. At times, the bonds within these families of choice, is stronger.
Also, with advances in technological monitoring devices (give up privacy to be able to live in your own home) and even intelligent caregiving robots assisting us with activities of daily living (hmmm, assistance with bathing and toileting might be pushing it), we might manage to live relatively independently for a long while.
The question is, if we sign up for LTCI, what kind of coverage will be offered when certain care options have not yet been invented? Consider that some of the earlier plans did not offer benefits for in-home care, a desirable option for many. An option to squelch these concerns would be for the LTCI industry to offer a simple straight forward set benefit amount that keeps up with inflation for any act of care that provides assistance with daily living.
Finally, these tough economic times remind us that businesses are not permanent. In other words even reputable long-term businesses can go out of business. What happens to all the premiums we paid? Gone. Just like that.
Bottom Line: I think LTCI is a good idea. Still, in its infancy, the industry needs a more accessible approach. (Contact Brenda Avadian, MA if you wish to explore successful approaches.)
For more information, read: Will I Need Long Term Care Insurance?
©2008 Brenda Avadian, MA
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Brenda Avadian, MA Founder, TheCaregiversVoice.com
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