Long-Term Care for an Aging Population
The conversation surrounding long-term care is usually framed around the statistics of older Americans – nearly 70% of Americans in their older years need long- term care at some point. That’s more than 8 million individuals in the U.S. that require support from long-term care services, according to the Centers for Disease Control and Prevention, the great majority of whom are more than 65 years old.
But there’s something else we should all be talking about – population growth and life expectancy. Globally, the number of older persons is growing faster than any other age group. In 2015, one in eight people was more than 60-years old, according to the United Nations. By 2030, they project an increase to one in six people, or 1.4 billion individuals over the age of 60.
When it comes to aging, experts say the greatest challenge our world currently faces – more than pensions or birth rates – is planning for and financing long-term care.
Part of the reason for this growing sector of our society is life expectancy. On average, 60-year old Americans can expect to live another 20 or 25 years, depending on their gender and other variables. And most Baby Boomers can also count on a couple of extra years free of disease and disability compared to 60-year olds of just 15 years ago due to improved medical treatments.
As our ability to treat and rid the society of diseases and as we are able to provide better and better care for our fellow man, it’s only logical that we’ll have less and less people dying off. Think about it – it wasn’t that long ago when the common cold could be a death sentence.
But as a result of this, we could be faced with a bubble of older folks who need to be cared for. And with recent moves to overhaul the American healthcare system and major cuts to Medicaid, this could spell bad news for the elderly.
Medicare and Medicaid became the first public health insurance programs in the U.S. in 1965. Medicare was intended for individuals over 65-years old and those with end-stage renal disease or kidney failure. Medicaid was intended to cover low-income individuals. But as of fiscal year 2014, long-term care services accounted for about a third of Medicaid spending, or $152 billion.
One common way of paying for long-term care is by dipping into a retirement fund. Long-term care can be expensive. And the longer you survive it, the more it costs you or your family.
There is a possible solution though — life insurance that offers a long-term care benefit – a “hybrid insurance.” It’s life insurance with a long-term care rider that allows you to use that money for healthcare if you need it.
Considering that long-term care insurance policies are some of the more complicated ones that you may encounter, this hybrid product may be just the ticket to simplify the process.
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