Of course, long-term care insurance (LTCI) is not the only way to skin the long-term care (LTC) finance cat.
Consumers can use life insurance policies, annuities, life settlement arrangements, reverse mortgages, ordinary savings and investment accounts, relatives and friendships to protect themselves against long-term care (LTC) risk.
The other financial-services-based mechanisms on that list are not in quite the same kind of regulatory doghouse as LTCI. But, in one way or another, they all face the problem that interest rates are in the basement. Low interest rates are cruel to any kind of saving or insurance arrangement that helps people prepare for post-retirement costs.
Meanwhile, even today, when the percentage of Americans over age 85 is still low, the percentage of older people with three or more adult children is still high. As Medicare, Social Security and Medicaid are still creaking along, many older adults have an unmet need for care.
Rebecca Glauber, a sociologist at the University of New Hampshire, reported in a recent survey data analysis that about 47 percent of U.S. adults ages 65 and older who needed care in 2012 and lived alone failed to get the care they needed.
About 36 percent of all older adults who needed care had an unmet need for care.
Glauber defined people as having an unmet need for care only if they were frail and also needed help with an activity of daily living (ADL) or an instrumental activity of daily living, such as shopping for groceries.
A committee at the Area Agency on Aging in Southfield, Mich., listed strategies public LTC programs have for skimping on care in a 2014 report.
Rationing topped the list.
Some of the other strategies include:
- “Prioritizing,” or providing only what an agency classifies as the most urgent types of care;
- Intentionally providing services that are unsuitable for many of the people who are supposed to be getting the care; Creating waiting lists;
- And, requiring the clients asking for care to supply goods, services or payments that they can’t provide.
These, again, are the good times.
For people who are depending entirely on government programs to pay for LTC services, the future could look worse.
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