Millennials Being Impacted by Long-Term Care

Millennials are becoming more aware of the realities of long-term health thanks to the combination of seeing older family members decline and having to take on a role in caregiving. Millennials are increasingly dealing with loved ones with dementia, diabetes, and heart disease and see firsthand the impact that declining health can have.

Millennials are making sure their loved ones have access to appropriate quality care when they need it. They also see the financial consequences that long-term health care costs can have on loved ones.

Recent research has shown the anxiety of running out of money during retirement is a major concern for those close to retirement or already retired. 41% of CPA financial planners say running out of money is their clients' top concern about retirement—including those clients who have a high net worth, according to a survey conducted recently by the American Institute of Certified Public Accountants (AICPA).

Many People Fail to Plan

Too many older adults have failed to take any action toward planning for the financial costs and burdens of aging. These long-term care expenses will have a tremendous impact on a person's income and savings. There is also a burden on adult children and grandchildren when they become pressed into the role of being a caregiver for an older family member.

It is estimated that 4 out of 10 millennials are providing care for their older parents or grandparents in some capacity. According to a study published by the National Alliance for Caregiving and AARP in 2015, 39% of millennials are providing care to an adult aged 50 or older. The study, which surveyed 1,854 people ages 15-34, found that millennials are more likely than any other age group to be providing care for their aging parents or grandparents. The study also found that many of these caregivers are juggling multiple roles and responsibilities, such as work, school, childcare, and caregiving, leading to increased levels of stress and financial strain.

Other studies have shown the impact of long-term care on millennials. According to a 2018 AARP Public Policy Institute report, about 6.2 million millennials and counting are acting as caregivers for a parent, in-law, or grandparent.

Consequences

The impact on them has been far-reaching and has had a tremendous effect on both their physical and emotional well-being. Many of these young adults have had to take on the role of primary caregiver for an ill or elderly family member, which can come with added financial stress due to medical expenses, as well as emotional stress from the strain of balancing caregiving responsibilities with other life commitments such as work, school, and personal relationships. 

Millennials find themselves having to make difficult decisions about managing their own lives while also caring for their loved ones, leading to feelings of guilt and anxiety. This can also lead to isolation and depression due to the lack of time available for social activities or engaging in hobbies they once enjoyed. Ultimately, the experience can be overwhelming for millennials who are taking on this important role.

Not Too Late for Many to Act

Part of the problem is a lack of planning by older generations. Only 1 in 5 adults have made any planning for long-term care, according to a survey from Genworth Financial, a major insurance company that specializes in Long-Term Care Insurance products. Half of the survey's respondents said they plan to take personal financial responsibility for their own care as they age.

"The elderly are living longer than their projected longevity and, as a result, are running out of money," said Susan Tillery, CPA/PFS, chair of the AICPA's PFS Credential Committee, quoted in the Journal of Accountancy.

The fear of running out of money in retirement has always been present. However, we are at a demographic crossroads where the Baby Boomers, who hold the largest amount of retirement assets, are supporting both their parents and their children. This has amplified the fear.

The survey reported that 52% of surveyed baby boomers thought they would require long-term care services down the road. Millennials, on the other hand, were more realistic: 64% of this group, born between the 1980s and late '90s or early 2000s, said they could see themselves needing long-term care at some point in their lifetime. While this might be more realistic, the fact is about half of those who reach the age of 65 will need long-term care services at some point in their lives, according to the United States Department of Health and Human Services. 

Longevity 

As medical advances continue to increase longevity, there will be an increasing need for people to need help with normal activities of daily living or even supervision due to memory loss like Alzheimer's.

The Genworth research indicates Generation X was the most fearful about paying for long-term health care but also the most likely not to have taken any action towards paying for it in the future. Often the parents of Generation X and Late-Boomers have already gone through or receiving long-term care. Perhaps this fear has paralyzed many people from taking any action.

Brent Donarski, a Long-Term Care Specialist who has been helping consumers since 1988, says that many of those who purchase Long-Term Care Insurance today are much younger than they were twenty years ago, 

Most of my clients today are in their early 50's to early 60's.

Donarski says many people he speaks with have had an experience of a parent needing long-term care services. This experience has exposed the financial costs and emotional impact that a long-term care event can have on parents' assets. These people have also experienced the pressure of either being a caregiver or managing caregiving for their parents.

People often share with me what it means being a son, daughter, or in-law, and having the responsibility to their own family, career, and dealing with a parent who needs care and attention. They share with me they don't want to place this burden on their own family.

Too many people wait until their good health begins to change. This creates a wake-up call, but generally, this is not the best time to start planning.

When people start investigating Long-Term Care Insurance after they have experienced a health event or health change it's often too late or it makes planning options much more expensive. The best time to plan is when you are younger and healthier since you have more options, and they are very affordable. This has to be part of a complete retirement plan before you retire.

Millennials were also the most likely not to expect the government to cover the cost of their long-term care. Two out of three adults said they expected U.S. government programs to cover the costs of their long-term care services, even if this isn't the situation in reality. 45% of the respondents confused Medicare for Medicaid or admitted they didn't know the difference between the two, the survey said.

Health Insurance, Including Medicare, Won't Pay for Long-Term Care

Health insurance will pay only for a short period of skilled long-term care services, generally things like rehabilitation. Medicare (and Medicare Supplements), which is health insurance for those 65 and older, will only pay for 100 days of skilled long-term care services. Most long-term care is custodial in nature. This is defined as help with ADLs (activities of daily living) or supervision due to memory loss.

Medicaid is the government medical welfare program. This program will only pay for long-term care services if you have little or no income and assets.

Long-Term Care Insurance will pay for all levels and types of care services. While more people are purchasing these plans in their late 40s or 50s, before they retire, many people are either unaware the product exists or fail to understand the need for the product. 

Long-Term Care Affects Families and Finances

While Long-Term Care Insurance protects assets, it also addresses the emotional impact and the physical burdens that long-term care often places on the adult children and grandchildren of the care recipient.

Long-Term Care Insurance is really easy to understand. The challenge is, many insurance agents and financial advisors, don't fully understand all the product offerings or the underwriting process. People I speak with find it easy to understand and more affordable than they originally thought.

The American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy and education group, recommends working with a specialist when researching and shopping for LTC Insurance. A qualified specialist can match an individual's age, health, family history, and other factors to find the best coverage at the best value. The specialist can provide accurate quotes from all the top insurance companies. 

Find an LTC Insurance Specialist

Jesse Slome, director of the AALTCI, says there are ways to find very affordable coverage and take advantage of discounts and cost savings features.

Consumers are not aware of ways to save on Long-Term Care Insurance and regrettably many agents do not share an opportunity worth considering. Too many inexperienced insurance agents today take an 'off the shelf' approach to recommending a Long-Term Care Insurance policy.

There are a variety of insurance companies that offer long-term care solutions. There are traditional partnership-certified policies, hybrid policies that offer death benefits, and short-term cash indemnity policies that are available to consumers.

Types of Long-Term Care Insurance Policies & Which Is Best For You

Today, a consumer will really benefit by working with a specialist who has knowledge of all the major insurers, their provisions, and requirements — the small print that few take the time to learn.

Caring for elderly parents or relatives can be a difficult task for millennials, who often find themselves financially strained by the responsibility. The burden of care is further compounded when millennials have to rely on their elders for their financial support. This can be a difficult balance to manage and can lead to feelings of guilt and obligation, as well as financial strain.

Professional long-term care services, while providing quality care, are also costly. These costs vary depending on the type of care required and where someone lives.

LTC NEWS Cost of Care Calculator - Find Your Location

Keep in mind that waiting until you have multiple chronic health problems can make it much harder to find affordable coverage or may make it impossible. 

What is Underwriting?

Yet, affordable coverage is available, especially if you act sooner than later and when you still enjoy good health. There are many younger adults planning for long-term care just like they are contributing to their 401(k)s.

How Much Does Long-Term Care Insurance Cost?

More people are becoming aware of the consequences of aging and declining health. People need help with everyday living activities for many reasons, including chronic illness, accidents, mobility issues, dementia, and the frailty of aging.

You can reduce the stress and burdens that will be placed on those you love by adding an LTC Insurance policy to your retirement plan. Caregiving is challenging for family members, and professional care is costly. Planning ahead makes it easier for everyone.