I noticed this article in TIME that talks about a method to reduce the burden of the upcoming baby boomer’s reaching retirement age. One way insurers are trying to address to the high cost of anticipated assisted living and other elder care is with “life style” planning similar to mutual funds. The plans allow you start with small investments and then start adding more coverage as get closer to actually needing the elder care.
I wonder if enough people would buy these plans to make a significant difference in the expected influx of elder when the baby boomers retire? I would lean towards people being scared about Medicare not being able to cover this influx with all the attention the issue has been getting, but there are also statistics out there how people grossly underestimate their actual end of care needs and the idea that baby boomers are in denial of their own aging and economic burden. Although the plans have an inherent social economic exclusivity that doesn’t really present them as a solution to the problem, maybe it could help.
http://www.time.com/time/magazine/article/0,9171,1838769,00.html
1 comment:
Long-term care insurance has an interesting history. It is unique among insurance products because you are typically insuring against certain types of expenses thirty to forty years in advance of incurring them without knowing what type of services you may need. Our society is changing rapidly and it is unclear that end-of-life services and how they are delivered will remain static.
For example, a typical long-term care policy purchased in the 1970's only covered extended stays in nursing homes. Many elderly today get in-home care, which is not covered by those policies, making this expensive coverage a windfall for the insurer and a disappointment for the consumer.
Most (if not all) OECD nations care for their elderly at the end of life without forcing them to spend their life savings to do so. In the US we only provide end-of-life services for free through Hospice. The problem with Hospice is you have to agree to die to get the service, refusing any life-saving or life-prolonging treatment that may be available to you. For example, if you have cancer you must stop taking chemotherapy. Does this seem humane?
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