Long-Term Health Policy Outlook Heats up

According to MetLife’s QuickFACTS bulletin, which chronicles retirement and health-care trends for those aged 50 and over by gathering statistics from a variety of sources, the number of Americans buying long-term care insurance jumped dramatically from 1.9 million in 1990 to 6.8 million in 1999.

A Health Insurance Association of America survey found that:

• those buying the long-term care policies at work averaged 43 years old while the age of those purchasing the coverage on their own dropped slightly from 72 in 1990 to 65 in 1999,
• by 1999, the average annual policy cost more than tripled between the $300 for a 40-year-old customer to the $1,022 for the 65-year-old,
• available policies got more liberal during the period. All companies surveyed no longer restricted people to nursing homes to get the long-term care while nine of the top ten policy sellers have dropped the traditional pre-existing condition limitation. “Pertinent” medical data still must be disclosed when customers apply for the policies.

Don’t look for the long-term care trends to ease anytime soon. According to the Congressional Research Service, an estimated 35% of older Americans will have to have long-term care over the next two decades. Over the next 40 years, the figure has been estimated at 82%.

In the financial arena, employee benefits professionals apparently recognize the importance of retirement planning offered in the workplace, according to a poll of US International Society of Certified Employee Benefit Specialists (ISCEBS).

The ISCEBS members were asked to rate the specific financial benefits they would use if offered by their employer:

• 74% mentioned help in setting retirement income objectives as well as help with wills, trusts, and estate planning,
• 58% cited aid in choosing investment vehicles and allocations,
• 50% said income-tax planning, and
• 25% listed long-term care insurance

Retired women are likely to have less money after they stop working than men, according to a study from the National Center for Policy Analysis (NCPA). The NCPA said retirement women average 85% of the earned retirement income of men because many women have worked part time during their lives to take care of their families.

Finally, on the financial front, some older Americans could get money from their homes by taking out a so-called reverse mortgage. Some in Congress are reportedly looking into allowing homeowners to take out $261,609 from their residence’s value. Fannie Mae has estimated that some 16 million households will take out a reverse mortgage by 2010, up from an estimated 15,000 in 2001.