Most Americans think that Medicare, the federal health insurance program commonly known as “Medicare,” pays for long-term care, but it doesn’t. USA Today reported that retirement planning experts are worried about the public’s basic misconceptions because this phenomenon means that millions of Americans are completely unprepared for how to pay for the considerable long-term care expenses in their later years. Many older Americans underestimate the need for long-term care, which may put their retirement life at risk.
“Long-term care” includes various services that the elderly need for daily life, such as assistance with bathing, dressing, and eating. The Center for Retirement Research at Boston College recently released a study showing that more than 80% of Americans will need someone to take care of them at some point in their lives.
USA Today reported that multiple surveys and studies have shown that Americans have a misunderstanding of the basic knowledge of long-term care. Nationwide Insurance Company (Nationwide) released a study in June this year showing that 58% of American adults mistakenly believe that Medicare pays for long-term care expenses.
Holly Snyder, president of Nationwide Life Insurance, said that about 70% of Americans will need long-term care services when they reach the age of 65, and “people think there is a social safety net program to rely on.”
Many elderly people need long-term care services for many years, and the cost is considerable. T. Rowe Price, a global asset management company, pointed out that the average monthly fee for assisted living is 5,350 yuan, and the monthly fee for a general nursing home is about 9,733 yuan. Experts such as Snyder said that many Americans mistakenly believe that Medicare will pay for these expenses.
Gal Wettstein, an economist at Boston College who studies aging, said that Americans often confuse long-term care with health care.
Medicare provides payment for the elderly to stay in nursing homes for a short period of time, but not for long-term nursing homes, because long-term care is not health care.
Medicaid, also known as the White Card, provides long-term care benefits for low-income seniors. Patrick Simasko, a Michigan attorney for senior citizen law, said many people are confused about the Medicare and Medicare.
Long-term care insurance can cover the long-term care expenses in old age, but according to insurance industry statistics, only 4% of American seniors have purchased long-term care insurance.
Why do so few Americans buy long-term care insurance? Weistein said: “Because many people think that Medicare has benefits and don’t think they need to buy additional insurance products that are already covered.”
A national insurance company survey found that 41% of respondents felt that they would not live long enough to need long-term care insurance. But in fact, the vast majority of seniors will need long-term care in their later years.
