Many Are Mistaken about Their CoverageÑa Problem of Perception
By: Source: AARP Bulletin Today Date Posted: 2003-06-27 16:00:56
Large numbers of older Americans may mistakenly believe they are covered by long-term care insurance, finds a new AARP-sponsored survey.
The newly released survey reports that 31 percent of Americans age 45 and older say they purchased long-term care insurance either through work, a private policy or by some other means.
That number far exceeds the best calculations of the Health Insurance Association of America (HIAA), a trade group. HIAA estimates that about 6 percent of Americans had purchased a long-term care policy before 1998. (Most companies do not sell individual policies to people under age 40.)
"Although more people are buying long-term care insurance today than in the past, it is unlikely that enough Americans purchased long-term care insurance between 1998 and 2001 to account for the difference between 6 percent and 31 percent," says Linda Barrett, AARP senior research adviser. "We suspect that many people are confusing long-term care insurance with other types of coverage, for example disability insurance provided by employers."
Another possibility, analysts say, is that many people wrongly assume that Medicare pays for long-term care. But Medicare is primarily a medical program, designed to pay for hospitalization and other needed care for beneficiaries. It does not pay for nursing home or at-home care, unless it is part of a plan of rehabilitative or skilled care.
The AARP survey was conducted by Roper Starch ASW. Their findings are based on telephone interviews with a random sample of 1,800 Americans age 45 and older.
The results are sobering, says Barrett. "If Americans mistakenly think they have long-term care insurance when they do not," she says, "they may have a false feeling of financial preparedness to handle the costs of long-term care."
Medicaid, the state and federal program for low-income individuals, does provide some of the same assistance as long-term care insurance, but those with assets must first "spend down" their reserves.
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