Americans Have Mistaken Ideas About Paying for Long-Term Care

More education is needed to prepare people for paying medical expenses in retirement.

A survey conducted online by Harris Poll on behalf of OneAmerica asked adults how they would pay for assistance with daily living due to illness or injury, either at home or in a care facility, for an extended period of time (longer than 90 days), and more than half (55%) said they would use Medicare or health insurance.

OneAmerica notes that in most cases, neither will pay for long-term assistance with daily activities.

In the survey of 2,065 U.S. adults age 18 and older, those ages 55 and older were more likely than those ages 18 to 54 to say they’d pay for long-term care needs with health insurance and/or Medicare (67% vs. 47%, respectively). Americans ages 18 to 54 were more likely than those ages 55 and older to say they would borrow money for long-term care, either from family/friends or with a credit card or loan (36% vs. 13%).

The results show more education is needed about preparing for the possibility of significant long-term care expenses, says Chris Coudret, vice president and chief distribution officer, care solutions, at OneAmerica. “Most people may realize they will probably need some level of care as they age, whether it’s help in their homes or full-time care in a facility. But these results show that most people probably don’t realize how those expenses can affect the plans they’re making for retirement.”

Health care costs continue to rise, but an approach utilizing the right investment vehicles and tools to gauge future health care expenses may help investors prepare for the worst.