Long-term care awareness vies for a place in the crowded spotlight
By Paul Wilson
Americans love to raise awareness, and each month brings a new round of campaigns crying out for our attention. Last month, NFL players and millions of others dressed up in pink to commemorate Breast Cancer Awareness month, one of the largest awareness efforts out there. Now the calendar has turned to November, otherwise known as Lung Cancer Awareness Month, Native American Heritage Month, National Homeless Youth Awareness Month, Epilepsy Awareness Month and, of course, Movember.
Individually, each of these campaigns is a worthy cause deserving our attention, but collectively, they quickly grow overwhelming. And unfortunately, as distracted Americans do their best to process the countless requests for their time, awareness and money, they continue to neglect another important cause: their own financial security.
As it turns out, November is also Long-Term Care Awareness Month. OK, most of you probably already knew that, but it seems that a large number of Americans skip over this one when doing their monthly scan of the upcoming November events.
And that isn't good news, considering the current state of long-term care planning in the U.S. The latest poll to highlight the issue, released this month by Northwestern Mutual, found that just 47 percent of Americans feel financially prepared to live beyond age 75 and only 38 percent feel prepared to live beyond 85. In addition, one-third of Americans don't even consider long-term care when considering retirement planning.
Additionally, just half of respondents said they were aware of assisted living facilities as potential solutions for long-term care needs. Thirty-six percent considered living at home with a family member as an option, while another 35 percent listed living in a nursing home as a possible solution. One in five respondents (21 percent) said they were unsure what long-term care options are available, while 47 percent believe health insurance, Medicare or Medicaid will pay for long-term care. And while 55 percent of respondents said they think they'll require long-term care at some point in the future, there remains a "very large educational gap," when it comes to the specifics, according to Steve Sperka, vice president of long-term care for Northwestern Mutual in an interview with AdvisorOne.
For example, almost two-thirds of younger respondents (between ages 18 and 24) estimated that a nursing home would cost less than one year's tuition at Harvard. In reality, Harvard undergraduates currently pay $37,500 per year, while Genworth reports that one year in a semi-private nursing home room currently goes for about $73,000.
“There’s a disconnect between what [clients] are planning for versus where reality is with medical advances and lifestyles,” Sperka said.
To help battle the large amount of misinformation out there, the Life Foundation has published a guide called "Shedding light on 7 long-term care insurance myths." The seven myths included are:
Myth 1: There’s a government program that will take care of me.
Myth 2: I can save the money I need for long-term care.
Myth 3: LTCI is only for old people.
Myth 4: I don’t need LTCI because I have health insurance.
Myth 5: I can’t afford LTCI.
Myth 6: LTCI only covers care in a nursing home.
Myth 7: We don’t need LTCI because we have each other.
A recent article in The Sacramento Bee, "Childless boomers wonder who will handle their long-term care," highlights the growing awareness that is dawning on many boomers as they grow older. "The question that concerns … many of America's 15 million childless baby boomers is … without offspring to help them, who will take care of them when they grow old?" Among frail adults ages 85 and older, 16 percent have no surviving children to act as caregivers, a number that is expected to reach 21 percent by 2040, the article says.
Even those who do have children might be reluctant to place the burden of caregiving on them, given some of the statistics out there. For example, the annual medical costs for a caregiver who looks after a relative with Alzheimer's are approximately $4,800 higher than those of a non-caregiver of the same age, according to a study last year from the University of Pittsburgh and the National Association for Caregiving. The study also found that the frequency of caregivers' emergency room usage and hospital visits went up significantly over time.
Additional research released earlier this year by the Working Mother Research Institute found that although the majority of women providing care to family members with Alzheimer's feel capable, 49 percent feel overwhelmed, 36 percent report depression and 65 percent have not taken a vacation in the past year.
"Too many women find themselves caught in a role they did not anticipate, sustained only at great personal cost and with no clear end date," said Carol Evans, president of Working Mother Media. “The caregiver's entire life is affected, and the responsibility weighs heavily on her family and job, not to mention her own health," she adds.
The spotlight (and a place on Americans' priority lists) is a fickle and crowded place these days, and remaining there requires a lot of work. But despite the countless distractions and responsibilities of life, millions of older Americans now have no choice but to face long-term care planning head on, presenting an opportunity for advisors to foster conversation with a suddenly receptive audience. Hey, better late than never, right?
I'd love to hear your thoughts on the current state of long-term care awareness and the obstacles you face each day when talking with clients. Do events like awareness months truly help? If not, what strategies do you find most effective? Because one thing's for sure: Time is running out and Americans simply can't afford to ignore long-term care planning any longer.