Friends Life Care: Helping Make Sense of Long-Term Care Planning

Abstract

For many people, life’s middle and later years hold the promise of new opportunities and newfound freedoms. But advancing age also brings an increased possibility of illness or injury. Nearly 7 out of 10 people over the age of 65 will experience a life-altering health event requiring some kind of long-term care.

Statistics show that more than 15 million individuals nationwide will need a long-term care plan in the near future. Yes, there is private long-term care insurance, but fewer than 10 percent of older adults have bought such policies, partly because the premiums are high and partly because they fear that insurance companies may not be around to pay benefits decades hence.

The healthcare reform law enacted in 2010 included provisions related to long-term care, the most significant of which was the Community Living Assistance Services and Support (CLASS) Act. Originally introduced by the late Senator Edward Kennedy, this program would have made insurance for long-term care available to all Americans, with individuals paying a premium through their employers. But in October the Obama administration backed away from the law, saying it could not find a way to make it work, and we are back to square one.

There are other problems. Historically, financial planning for retirement was based on the three-legged stool of Social Security, pension and retirement savings. But the stool is on the verge of collapse.