Alzheimer’s disease is the leading cause of long-term care insurance claims. Currently an estimated 5.8 million Americans are living with Alzheimer’s disease. That number is expected to increase to 14 million by 2050.
Today, the U.S. Senate Finance Committee Subcommittee on Health Care chaired by Sen. Pat Toomey held a hearing titled “Alzheimer’s Awareness: Barriers to Diagnosis, Treatment and Care Coordination.”
Sen. Toomey has a proposal to help families pay for long-term care insurance. In a statement for the hearing record, American Council of Life Insurers President and CEO Susan Neely and National Association of Insurance and Financial Advisors CEO Kevin Mayeux applauded this effort.
“Chairman Toomey’s proposal would help families by allowing them to have limited access to their retirement savings to help pay for long-term care insurance,” they said. “By providing this flexibility, more families would have protection against spending down their hard-earned savings to pay for long-term care.”
One of the most important tools to protect against financial disruption in retirement is long-term care insurance. Long- term care insurance provides funds to help Americans who need care to remain in their homes or to choose facilities that meet their care needs. It also helps ease the burden on family caregivers.
The cost of long-term care services is high. According to a recent survey, the annual cost of adult day care is $19,500. An assisting living facility is $48,612. And a private room in a nursing home is $102,200. Those costs are also rising approximately 3% per year.
Many Americans mistakenly believe that Medicare or Medicaid will cover their long-term care expenses. However, Medicare only provides coverage for very limited long-term care costs. Medicaid only covers those costs after you’ve spent down assets that may have been saved over a lifetime.
Americans 65-and-older have a 70% chance of needing long-term care services. And as America’s population ages, demand for long-term care will increase. During the next 20 years, the share of the U.S. population that is 85 or older will more than double.
Fortunately, the private long-term care insurance marketplace offers meaningful solutions.
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