White House Report: Risk for LTC High; asks for Funding Ideas

The White House Conference on Aging has issued a final report summarizing information and proposals from the conference which has occurred once a decade since the 1950s. The issue of aging and Long Term Health Care has become a priority with policymakers for years due to the increases in lifespan and the dramatic increase in the amount of people who require Long Term Health Care.

“In spite of a large number of people who will need long-term services and supports and the potential threat to retirement security that the high costs represent, most Americans are unaware of how much this care costs or who routinely pays for such services,“ the report states.

According to the report, in 2005, a person turning age 65 had a 69 percent risk of needing Long Term Health Care services for an average of three years during the remainder of their lifetime. For men who reach the age of 65, 58% of them will require a Long-Term Care service. However, the risk for women is even greater. The report indicates 79% of women, who reach the age of 65, will need some Long-Term Care service in their lifetime.

Part of the issue which impacts both the public and government is many people are unaware of the real risk.

“The role of public programs such as Medicare and Medicaid in financing long-term services and supports is commonly misunderstood. While Medicaid is the largest payer of long-term services and supports, roughly a third of pre-retirees incorrectly assume Medicare pays the most,” the report says.

Other financing options for Long-Term Care exist. The report indicates private options which include Long-Term Care Insurance, life insurance with LTC riders, reverse equity mortgages, and annuities with LTC riders are available to help some people plan ahead to pay for their future care.

The White House Conference on Aging report suggests consumer education and outreach on how to better prepare for Long Term Health Care is needed. The US Department of Health and Human Services already has a website to help boomers and others plan for future Long-Term Care planning. That website is: longtermcare.acl.gov.

U.S. consumers own about 7.3 million private LTCI policies, and private insurance covers about 3.3 percent of U.S. LTCI spending.

The federal government already provides tax incentives for people who purchase private Long-Term Care Insurance. Some states also have state tax incentives as well. In addition, most states have partnership programs available which provide dollar for dollar asset protection if you have a traditional qualified Long-Term Care policy.

The Long-Term Care Partnership Program is a collaboration between the state government and insurance companies. Under this partnership, applicants who purchase qualifying long-term care insurance policies can access Medicaid coverage while retaining assets they would normally be required to spend on their long-term care. This is referred to as dollar for dollar asset protection or asset disregard.

Public comments are being sought by the White House on additional way to fund and other public policy options to deal with this issue which impacts so many Americans.