Most Boomers Think Affordable Care Act Covers Long Term Care
Since its initial implementation, confusion has surrounded the Affordable Care Act. People are unsure about what it covers, how it affects their benefits, premiums, and hospital networks. A new study, however, shows that more people than ever believe the Affordable Care Act covers long term care costs.
ACA and Long Term Care
A new study by Nationwide revealed this findings just recently and brought this issue to the public’s attention. The Nationwide Financial Retirement Institute conducted a survey and found that 7 in 10 baby boomers think the Affordable Care Act covers long term care. Unfortunately, this just isn’t true.
The Affordable Care Act originally contained a provision called the CLASS Act, which created a national public long term care insurance system. After much debate about the financial solvency of the system, opponents of the provision were able to repeal it. The Obama administration later admitted the program was “unsustainable”.
Once the CLASS Act was scrapped, a Federal Commission on Long Term Care was created to study long term care in the country and come up with a new solution. The commission concluded late last year and submitted a report, which included a grand analysis of the current long term care system and several suggestions to improve quality of care and cut costs. So far, not much else has been done regarding the matter.
The Nationwide survey revealed a huge discrepancy in knowledge and fact in terms of long term care, which needs to be addressed quickly to correct the confusion and help guide people to understand their options. The survey also discovered that few have even begun planning for long term care. Most haven’t done anything at all.
Amongst Americans aged 50 and older with a household income of $150,000 or more, only 28% know that the Affordable Care Act does not cover long term care costs, a small percentage given the number that will need care at one point or another. Government studies estimate 7 in 10 Americans over the age of 65 will need long term care at some time in their lives, so the disparity between risk and understanding is still very high.
Most people know very little about long term care, but many will tell you that a nursing home is not in their plan. 54% of the older Americans surveyed said they would rather die than live in a nursing home. Despite this, planning still lags far behind and almost half of participants are worried about becoming a burden to their families.
The survey participants expect their long term care costs, on average, to cost $36,220 annually. Sadly, this estimation is significantly lower than the actual cost of long term care. According to the Genworth 2013 Cost of Care Study, the lowest cost care setting is an assisted living facility, which averages $41,400 per year. In-home care costs of an average of $44,479 annually and nursing homes are much more expensive.
A single private room in a nursing home currently costs an average of $83,950 and the cost is expected to reach $265,000 by 2030, when the last of the baby boomers reach retirement age. Costs continue to rise across all care settings and without preparation, most people won’t be able to pay for care on their own.
To prepare for the cost of long term care, we recommend looking into long term care insurance. For those who have assets to protect for retirement, buying a policy makes financial sense. We can help you compare rates from the top rated companies and provide you with the information you need to make an informed decision. Read more about long term care insurance now or fill out this form to request a no-cost personalized quote comparison sent to you in the mail.