Private insurance currently plays a small, but potentially important role in financing the long-term care of the elderly in the United States, and some believe it can be a significant element in a restructured long-term care financing system, according to a new report. The report, from the Center for Retirement Research at Boston College, examined the long-term care insurance industry and found major benefits but also major problems.
According to the report, the benefits of long-term care insurance include a greater choice of care settings and providers than under Medicaid and the potential to reduce Medicaid spending by states. However, despite the benefits, sales of long-term care policies have not been increasing in recent years.
The report identified several reasons for people’s reluctance to purchase long-term care insurance. One reason could be that long-term care insurance is perceived by many to be expensive. The average premium for a 65-year-old is $2,000 a year, though premiums for younger adults are much more affordable; as many as 76 percent of those aged 35-59 could afford coverage according to the report. Another reason policies aren’t more popular is the confusion over what Medicare covers. Many people incorrectly believe that Medicare will cover long-term care in a nursing home.
The report talks about the fact that the government is attempting to develop the market for long-term care insurance through the Long-Term Care Partnership Program, which I reported on in a recent newsletter .
To read the full report, click here .
For more information on long-term care insurance, click here.