Most Mistakenly Think Medicare Will Cover LTC Needs

Read Time: 4:57
Published: Sep 29th, 2016
Most Mistakenly Think Medicare Will Cover LTC Needs
Article Updated:September 18th, 2020

A recent survey, '2016 Long-Term Care in America', conducted by the Associated Press-NORC Center for Public Affairs Research at the University of Chicago, shows 38% of adults age 40+ believe Medicarewill pay for their future long-term health needs. This, even though both traditional health insurance and Medicare(health insurance for those 65 and older) does not typically cover most long-term care (LTC) services and supports.

Medicaredoesn't cover long-term custodial care, which is the type of care most people will require. People require long-term health care services due to illnesses, accidents, or the impact of aging. About half of us will need long-term care if we make it to age 65. Most of this care is custodial in nature, so Medicareand health insurance will not pay. The responsibility for paying for care - or providing the care - is left to the American family.

According to data from the Kaiser Commission on Medicaid, only 2 out of 10 older adults anticipate using Medicaid to finance their LTC needs even though Medicaid ranks as the largest public payer of long-term care services.

Medicaid is the nation's medical welfare program and requires a person to have little or no assets or spend down to those levels after paying for extended care out-of-pocket. This places enormous financial burdens on American families.

Medicareand Social Security were not built to cover Long-Term Care costs, leaving American families unprotected, and as this survey shows, unaware of this fact.”

 Bruce Chernof, M.D., president, and CEO of the SCAN Foundation,

Long-Term Care Insurance, including Partnership policies available in 45 states, is an affordable solution to pay for future long-term health care needs. Many people now look at Long-Term Care Insurance as part of their retirement planning. 

The survey shows that most of those who have LTC insurance (69%) are very satisfied or somewhat satisfied with a policy's cost. Among those who do not have LTC insurance, just 23% say they have looked into purchasing a plan. This could be since so many people think other sources will pay for these costs.

Partnership Long-Term Care Insurance provides additional dollar-for-dollar asset protection or what is referred to as 'asset disregard.' In the event a person spends down money in their LTC policy, they can legally shelter part of their estate based on the value of the benefits paid out.

36% report they are very or extremely confident they will have the resources to pay for Long-Term Care, while another 36% say they are somewhat confident and 24% are not too confident or not at all confident.

Genworth Financial, a leading insurance company, does an annual research study on the cost of LTC services and the public perception of those costs. The 2016 study showed most Americans underestimate the cost of long-term care at-home care by nearly 50%.

 “Americans’ Estimates of Long-Term Care Costs Are Wildly Off, said, “Nearly a third of Americans (30%) believe home health care expenses are under $417 a month, but according to Genworth’s number-crunching, the national median rate is about nine times that $3,861 per month for an in-home aide or $3,813 per month for homemaker care (that’s hiring someone to handle household tasks such as cooking, cleaning, and running errands). Genworth assumes 44 hours a week of home care in its calculations.”

Richard Eisenberg 

Valerie VanBooven, RN BSN, Editor In Chief Of HomeCareDaily.com, says the study also determined that women are more likely to be the ones who underestimate the cost of in-home care, even though they comprise 80 percent of the care providers or family members who find the right level of care and support for a loved one.

“If people underestimate the cost of long-term home care, they are more likely to be unprepared for it in the event that they or someone else in their family requires significant long-term care in the future,”

Valerie VanBooven, RN BSN, Editor In Chief Of HomeCareDaily.com

Other points the AP/ NORC survey showed:

  • 77% of respondents would prefer to receive care in their own homes.
  • 67% indicate they would want their loved ones to receive LTC services in a home setting.
  • One-third of the respondents have not made any plans to pay for their LTC services.

Just under half (46%) anticipate that it is at least somewhat likely that an aging family member or close friend will need ongoing living assistance in the next five years. Those who have long-term care experience are more likely to anticipate that their loved one will need assistance, as are those who are younger than 65. 

Those who say their loved one will need ongoing living assistance, 1 in 3 say they will be at least partially responsible for providing that care, and half say that someone else will be responsible for delivering that care.

However, these prospective caregivers are not confident that they are prepared to provide this care. Just 30% of those who will be responsible say they feel very or extremely prepared to provide this ongoing care to their aging family member or friend, 47% say they are somewhat prepared, and 20% say they are not very or not at all prepared.

Meanwhile, those who have LTC insurance policies are receiving benefits from those plans. Long-Term Care Insurance companies paid over $11 Billion in claim benefits in 2019 according to the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy group.

“Americans are living longer and often the result is a need for Long-Term Care,”

 Jesse Slome, executive director of the AALTCI. 

“The individuals who own LTC insurance policies benefit from the protection as do their families and loved ones.”

Without insurance to pay the cost, Slome acknowledges the caregiving responsibility often falls on elderly spouses or adult children of aging parents.

“LTC insurance provides choice and control while protecting your retirement plans and lifestyle. It allows loved ones to care about you rather than being forced to care for you.”

Jesse Slome 

About the Author

An LTC News author focusing on long-term care and aging.

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LTC News Contributor James Kelly
James Kelly

Contributor Since
August 21st, 2017

LTC News author focusing on long-term care and aging.

About the Author

LTC News author focusing on long-term care and aging.

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