Study: Few Americans Prepared for LTC Needs

May 23, 2003 ( - Few Americans older than 44 have a long-term care (LTC) insurance policy even though most agree it is important, a new study found.

The insurance-industry backed Roper study, released by the American Society on Aging (ASA), found that only 17% of those polled had an LTC policy.

Roughly three-quarters of those surveyed said they knew about long-term care options and 71% believed it is very important to have private or government coverage for long-term care. In addition, two-thirds of those surveyed said having enough money to be able to choose a long-term care facility for themselves or a loved one is very important. But, while most (77%) have put aside money for retirement, only 37% have saved for potential long-term care costs. State Farm Insurance funded the study.

“We know that after age 65, Americans have more than a 70% chance of needing some form of long-term care. This is a real wake-up call for all of us to redouble our efforts to get good information on long-term care financing out into the community,” Jim Emerman, senior vice president of the American Society on Aging, said in a statement. “It can be dangerous to assume you’re covered and to leave your health-care decisions in someone else’s hands.”

Long-term care refers to services people need when they are no longer able to care for themselves. People often need long-term care after an injury, illness, stroke or disease. It is delivered in the person’s home or in a nursing home facility.

Coverage Confusion

According to Emerman, a key reason for the gap between awareness and action is confusion about coverage. “This study shows just how many people think they’re already covered by some other program, when it’s very likely they aren’t. By the time they realize they’re not covered or that coverage is limited, it may be too late to acquire adequate long-term care insurance coverage,” he said.

A majority (62%) of those surveyed have at least one serious misunderstanding about who provides long-term care coverage or the conditions under which coverage is offered. For example, more than four in 10 are unaware that Medicare provides limited coverage for skilled nursing care, limited to 100 days in each benefit period and only following a hospital stay.

Other apparent misconceptions:

  • 46% of those with health insurance believe it would pick up most of the costs of long-term care. In reality, according to the ASA, long-term care is rarely covered by health insurance plans.
  • 30% were unaware that, while Medicaid does provide long-term care coverage, it is only available to those who have depleted nearly all of their own financial resources.