Are we headed for a LTC crisis?Article added by Daniel Steenerson, CLU, ChFC, RHU on December 5, 2013
Daniel Steenerson

Daniel Steenerson, CLU, ChFC, RHU

San Diego, CA

Joined: October 15, 2013

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Retirement is supposed to be a joyous time, with days spent traveling, visiting family, starting a new career or hobby, or just enjoying some well-deserved R & R. But that joyous time can quickly turn into a financial struggle for those who need long-term care due to an illness or disability. And more and more people are finding themselves in that position as the need for long-term care continues to grow.

Are we headed for a LTC crisis?

Changing demographics and a growing elderly population are exploding the need for a variety of long-term care services, and pressures on long-term care systems are only expected to grow in the future. But despite growing demand for geriatrics and long-term care, the supply of trained professionals isn’t keeping up, for several reasons:
  • Too little exposure to geriatrics in medical school, making it a field medical students don’t typically consider

  • Geriatrics is not a very high paying field compared to other medical specialties

  • Geriatrics can be a more time intensive specialty
The growing need for long-term care, combined with the question of coverage and how to pay for it, is an imminent public health issue. Coverage provided by government programs such as Medicare and Medicaid is extremely limited. And without the public or political will to add a new health care-related mandate or increase taxes for a national long-term care program as part of Medicare, families are left with three options: turn family members into caregivers, pay for care out of pocket, or have LTC insurance to pay some of the cost of care.

Greater demand for LTC insurance

More and more people are choosing LTC insurance. According to a survey conducted by LIMRA, individual long-term care insurance sales were 13 percent higher in the first half of 2013 than they were during the comparable period in 2009. During that time period, nearly 100,000 individuals purchased traditional long-term care insurance policies and tens of thousands purchased life insurance and annuity products n that provide long term care benefits, according to Jesse Slome, Executive Director of the American Association for Long Term Care Insurance.

New premium at the top five carriers grew 26 percent, and one carrier doubled new premium. Multilife LTC programs also fared well, with new multilife LTC premium up 12 percent.

Greater demand for sound financial advice

For those who prepare themselves, retirement can offer some of the best years of their lives. But for those who haven’t planned and prepared for the possibility of needing long-term care services, home health care and nursing home costs can become a heavy burden on their budget.
And even though two-thirds of baby boomers say they understand the need to plan for long-term care, only 44 percent have a strategy in place, according to a February 2011 Time.com article. Many simply lack knowledge of the overall costs, offerings of government-sponsored programs, and various insurance options.

So, the expanding need for LTC insurance is creating a growing need for sound financial advice from brokers and agents like you. Pre-retirees and retirees who are thinking about LTC need someone with thorough knowledge of the current state of long term care costs and the resources that can be used to pay for these expenses. And they need someone who can help them develop the best strategy for their unique needs.

See also: "Gravity": What Bullock and Clooney can teach us about the long-term care crisis

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