Survey: Gen-X Mostly Unprepared for Long-Term Care Costs

Many members of Generation-X say they feel unprepared for long-term care and do not feel they are taking the necessary steps to prepare for their futures, according to a survey of 1,004 people born between 1960 and 1980 conducted in December by StrategyOne on behalf of America's Health Insurance Plans. The survey found that more than half (52 percent) of respondents born between 1960 and 1980 feel somewhat or entirely unprepared for long-term care. They also place more immediate financial concerns ahead of affording long-term care, with 44 percent of respondents ranking the need to save for retirement as their first or second priority. When looking ahead to the future, many survey respondents correctly believe their chances of needing long-term care services are high, with 68 percent saying they feel it is likely they will need this type of care in the future. About 70 percent of adults who reach age 65 will need some type of long-term care. Yet many are unaware that long-term care insurance can protect their retirement nest eggs and other assets, with 53 percent of respondents saying they are not very or not at all knowledgeable of this coverage.

"As the first group of Generation-X approaches age 50, they begin to think about financial planning for retirement," said AHIP President and CEO Karen Ignagni. "Preserving their financial independence is crucial to members of this generation, and few things can wipe out a lifetime of savings as quickly as the need for long-term care. As you go through your financial planning checklist for mid-life, it is important to consider your long-term care needs when planning for the future and protecting your hard-earned assets."

Generation-X understands the value of planning for their financial futures, the survey found, but many underestimate the cost of long-term care, with half of respondents estimating the average annual nursing home stay is between $20,000 and 60,000 per year, when the national average cost of one year in a nursing home is more than $75,000. Nearly 60 percent mistakenly believe their current policies provide coverage or they do not know if they are already covered. Long-term care insurance provides coverage for long-term care, and it also preserves the independence so highly valued by Generation-X, as it allows the beneficiary to choose the setting in which care is received.

In order to finance their long-term care, 36 percent say they would rely on government assistance, such as Medicaid, to provide for long-term care. While Medicaid often provides coverage for long-term care services to qualifying low-income Americans, many people have to spend down their savings to the point of poverty in order to quality for this assistance. Others say they would use their retirement savings (26 percent), sell their assets (24 percent), rely on other insurance products (22 percent), or rely on family and friends (13 percent).

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  • OHS Magazine Digital Edition - October 2020

    October 2020

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