Recent predictions show that over half of older Americans will need these costly services.
According to the American Association for Long Term Care Insurance executive director Jesse Slome, around one in every six Americans is now older than 65 years, and the more the population ages, the shakier their financial position will be.
While living longer lives is typically desirable, the cost of those years could lead to hardships.
“Living a long life is something that many of us want and could get,” said Slome. “But when we live a long life, the chances of us needing long-term care increase exponentially. But when you need that type of care, there are limited options.”
Long term care insurance is a type of coverage intended for older adults who require services that will assist them with eating, standing, showering, and medical support such as speech and physical therapies. Predictions made by the Department of Health and Human Services indicate that over 56 percent of people turning 65 years old will require this type of service in some form.
Coverage through Medicare exists only for services over the shorter term. Medicaid will provide coverage for certain individuals who qualify. However, for people who aren’t eligible for government services, the only option can be to depend on spouses or children who will pay for these services out of their own pockets.
Long term care insurance is an option, but its high premiums mean that not everyone can afford it.
Though a long term care insurance policy used to be relatively commonplace, it has become a complex and niche market. Premiums have been sharply and steadily rising in recent years, pricing many potential customers out.
By 2020, only about 7.5 million people in the United States had an active plan. With each passing year, uptake has been dropping, according to research by the association.
Estimates from the Census Bureau are that nearly 58 million adults in the United States are aged 65 or higher. That number continues to climb. Predictions by the HHS are that about 1 in every 5 Americans will be 65 years old or older by 2040.
“The population of seniors who buy long-term care insurance constitutes a segment of the population who are healthier and their longevity is likely different than the nation as a whole,” said Slome. “They tend to be educated on what they’re buying, and they have to be able to afford it.”