Zombies are Scary, but Long-Term Care is Terrifying


The Walking Dead is on a break until February but another horror show is playing out every day. It’s called Longevity and it’s a lot like the TV show.

It’s a long, threatening journey where you fight off one crisis only to run into another. And when you end up in an institutional setting, that’s when the real trouble begins.

To be fair, quite a bit of research shows that people hit their happiest after 65. So, they are truly golden years for many people. But as we all know, health is the greatest wealth. As long as people can be independent, secure and feeling reasonably good, happiness can find a home.

A recent report from the American Council of Life Insurers reveals just how much a threat health issues become in older age. Quite a few facts are even scarier than a zombie lurching out of the dark.

One is that 70 percent of people now over 65 will need long-term care. That in itself can be difficult for families to cope with. When to place someone in assisted living or a nursing home is tough. Couples who have been married for as many as 50 or 60 years sometimes have to face the heartbreak of living apart because one can no longer stay in the home.

But on top of that comes the financial burden. The other frightening fact is one year in a nursing home costs $87,600 for a private room. And the average base rate for the services of an assisted living facility is $42,000.

Now we turn around to see the next scare. Long-term-care insurance pays for only 7 percent of total nursing home expenses today. Medicaid pays 33 percent; Medicare, 34 percent and out of pocket, 20 percent. Typically, it’s out of pocket until a person or a couple has liquidated assets and have spent down to $2,000 in assets to qualify for Medicaid. Not only is that devastating to that person’s finances, but we will be wiping out inheritances for most of the next generation.

Ask anybody 50 and older and you will likely hear about this issue playing out in his or her immediate or extended family.

LTC insurance is a clear answer, as is pointed out in the ACLI report. And there are also LTC riders on other insurance products that can help.

It is not an overstatement that this is a national emergency. Not only is this devastating private money, but more public money will be needed with fewer workers to pay the bill. There are few good scenarios here.

So, it’s up to the insurance industry to establish and sell affordable coverage that consumers can depend on. It’s a tough sell. But it’s a noble mission.

You know what? Zombies? Not so scary.



Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Connect with Steve →

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