The gap in long term care insurance is widening as Baby Boomers age

Long Term Care Insurance

Long Term Care Insurance

As the largest generation heads for retirement what coverage do they have?

Long term care insurance is currently facing a notable gap in the coverage that it is providing, and as a growing number of Baby Boomers begin to rely on it, that gap is increasing at an alarming rate.

The problem is that almost three quarters of all Americans over the age of 65 will need this service.

The National Clearinghouse for Long Term Care Information’s data has shown that nearly three in every four Americans past that age will, at some point in their lives, need some form of this care. Unfortunately, the Health Affairs journal has also discovered that up to 12 percent of individuals living in nursing homes are determined to be “low need”, which means that if they were provided with the right at home support, they would be able to live in the community.

The long term care insurance industry is desperately trying to find a solution to fill the gap.

However, the primary struggle is – as with most other things – the cost. The services involved in this type of care come with a large price tag. For example, according to the 2012 Genworth Cost of Care Survey, a licensed home health aide has an average hourly rate of $19. An adult daycare service runs daily average of $61. An assisted living one bedroom apartment is $3,300 per month, on average.

Of course, those are only the very basic costs. Many of these services have “add ons”, depending on the care that is required. For example, many assisted living facilities have special units that are designed to provide patients with dementia with special safety and care features that cater specifically to those needs. Those additional services, though necessary and very helpful to making sure that the patient is both safe and comfortable, also have an added expense.

The Assisted Living Federation of America’s senior vice president of marketing and communications, Jamison Gosselin, explained that “Our long-term care model is evolving away from a continuum of care to a place where the senior can receive care and services no matter where they want to live.” The key will be to balance the services provided with the cost of long term care insurance.

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