Not having enough money to pay for health care or long-term care is the greatest fear adults have about aging, Genworth found in a survey of 1,200 people.
Despite these overwhelming apprehensions, only 20% of Americans have taken any steps towards figuring out how to finance long-term care costs.
In addition, only 50% feel they should be responsible for their own care as they age, with the remainder feeling it is the responsibility of the government, their family or community or faith-based organizations.
“As these findings suggest, many people will not be prepared financially to handle the impact of growing older, which means the burden of caring for them will fall to their families, friends and communities,” says David O’Leary, president and CEO of Genworth’s U.S. life insurance division. “That’s why it is so important for people to talk to their families about who will care for them, educate themselves about the cost of care and develop a plan for how they will pay for it.”
NEXT: Additional misunderstandings
Sixty-six percent of Americans mistakenly think government programs will fund long-term care, despite the fact that Medicare only pays a limited amount and Medicaid has strict financial eligibility requirements. In addition, 45% of respondents either confused Medicare and Medicaid or did not know the difference between them.
Forty percent underestimated the hourly cost of professional help in the home, and 52% did not know that a long-term care insurance policy can cover help in the home. Sixty-one percent of respondents did not know that long-term care can be personalized and that the insurer can help them find quality care providers.
Genworth says that 70% of the people who are turning 65 today will need long-term care at some point in their lives. Nonetheless, only 52% of Boomers think they will need these services. However, Millennials and members of Generation X are more realistic, with 64% and 65% of these demographic groups, respectively, conceding that they may need long-term care in the future.
Genworth discovered that Millennials, who already are facing the prospect that Social Security may not exist in its current form by the time they retire, are the most likely group to have taken action to obtain long-term care insurance.
“People are never too young to begin preparing for how to pay for long-term care costs, which as often overlooked as a major retirement expense and can quickly wipe out a person’s savings,” O’Leary says. “Understanding the costs is a good first step, followed by a conversation with a financial professional about potential funding options that will protect assets against long-term care costs.”
Genworth has developed a video, “Let’s Talk,” to help families confront the delicate subject of long-term care. The company also points to a website from the government that explains Medicare and Medicaid coverage: longtermcare.gov. For a link to Genworth’s offerings, go to genworth.com/longtermcare.