5 Ways Baby Boomers Are Changing Long-term Care

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Healthy Aging Image Gallery Some baby boomers living with long-term care policies worry that the premiums will jump significantly years down the road when they'll actually need to use them. See more healthy aging pictures.

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5 Ways Baby Boomers Are Changing Long-term Care

As the 78 million baby boomers born between 1946 and 1964 in the United States approach retirement, they will continue to shape society -- even in old age [source: U.S. Government Accountability Office]. Despite their fierce social and personal independence, it's likely that many boomers will rely on others in their later years of life, especially for long-term health care, or services that offer assistance with daily activities such as bathing, walking or eating.

According to the U.S. Administration on Aging, long-term health care applies to people with chronic illness or disabilities, with the goal of maximizing their independence and ability to function when full independence is no longer an option [source: U.S. Administration on Aging]. It's estimated by the year 2020, nearly 12 million people will need long-term care, and this number is sure to grow with the aging baby boomer population [source: Medicare.gov].

But how will baby boomers change long-term health care?

The group has already influenced current approaches to long-term care with its attitudes toward aging and financial preparedness for care in later life. Although we'll talk about baby boomers as one group, it's important to view them as diverse individuals with unique health histories and resources.

Read on to learn what boomers' projected lifespan has to do with long-term care.

Got You Covered?

Government programs such as Medicare and Medicaid don't typically cover long-term health care services [source: Medicare.gov]. Medicare will fund temporary disability and recuperation costs in certain circumstances, whereas people applying for Medicaid must meet specific income requirements before becoming eligible for long-term care financial assistance. Unfortunately, people without adequate savings or long-term care insurance will empty their bank accounts to pay for care before qualifying for Medicaid.

5: Boomers are Living Longer

Baby boomers will not only comprise the largest aging population ever, they will also live an average of two years longer than their parents -- a reality predicted to strain health services and current government programs such as Medicare and Medicaid [source: U.S. Congressional Budget Office].

They are living long past retirement, and the idea of needing assistance with daily activities seems like a distant proposition [source: Valeo]. In reality, 70 percent of people 65 and older are estimated to need long-term care [source: U.S. Administration on Aging]. Just as people can naturally become disabled with age, an accident or sudden illness might place someone with good health into long-term care.

Boomers are changing long-term health care by not preparing for it while it's still affordable. Since the cost of long-term care increases with age, purchasing insurance for it is most affordable before retirement -- a time when boomers aren't typically focused on making that purchase [source: Block]. Among people in their 40s, only 10 percent have secured an insurance plan [source: Morrissey]. If more people are unprepared for the costs associated with aging, funds in need-based programs such as Medicaid are expected to be depleted in coming years.

The same boomers that led social movements in the second half of the 20th century plan on keeping their independence. Next, read how this is changing long-term care.

Costs of Care

The cost of hiring a professional to provide in-home care three times per week for one year is roughly $18,000, while the cost of staying in a nursing home for one year is $68,000 [source: U.S. Administration on Aging]. Long-term care costs depend on the frequency and type of care, as well as a person's geographic location, which affects the demand for health services.

4: Wishes to Remain Independent

The same boomers who sought to revolutionize society earlier in life are redefining retirement altogether, with one-third of current boomer retirees still working in some way [source: Merrill Lynch]. Even if baby boomers exit the workforce financially sound, they are often "reinventing themselves" with new jobs, volunteer work and hobbies [source: Valeo].

Baby boomers also want to remain independent in their own homes, which will increase the demand for in-home long-term care [source: Carbo]. Staying put might require hiring a professional caregiver (skilled care) or relying on family members (non-skilled care) to assist with daily activities such as cooking and bathing. Boomers are exploring technology that assists with long-term care as they look after their own aging parents. Already, they're using assisted-living cameras and special, prefabricated-and-portable backyard shelters, dubbed "granny pods," to help monitor people who need long-term care [source: NPR Staff].

According to one survey, baby boomers are less prepared for long-term health care because they gamble on government programs and their families caring for them [source: Merrill Lynch]. Read more about how this affects their willingness to buy insurance on the following page.

3: Not Purchasing Insurance

Private insurance companies offering long-term care policies are not sure how to deal with the baby boomer generation. Although boomers value the idea of long-term care insurance -- and can usually afford it, they still aren't buying [source: New York Life]. At present, 13 percent of people between the ages of 25 and 70 have long-term care insurance, and only 23 percent more say they plan to buy it, according to one industry survey [source: Merrill Lynch].

Long-term health care services aren't usually included in comprehensive health care plans, which is why a specific long-term care policy is needed.

Since the demand for long-term care insurance increases with age, many companies boost premiums for older applicants to discourage customers from opting in at the last minute and stressing resources. It's suggested that the continual aging of baby boomers has caused some insurance companies to stop selling long-term care insurance altogether [source: Block]. In addition, the influx of aging boomers has resulted in companies becoming more selective in accepting applicants based on their current health and pre-existing conditions, reinforcing the need to apply while in good health at a younger age [source: Medicare.gov].

Even those living with policies worry that the premiums will jump significantly years down the road when they'll actually need long-term care [source: Morrissey].

Private companies aren't the only entities preparing to accommodate baby boomers. Next, find out what the U.S. government is doing.

2: Increase in Government Options

With Medicare and Medicaid explicitly stating who's eligible for coverage, some individuals planning on receiving financial assistance for long-term care will be surprised to find no aid available when they need it -- at least until they empty their bank accounts.

Since both programs only provide coverage in special circumstances, the government has created a few programs for older retirees and aging boomers. For example, the Federal Long-Term Care Insurance Program offers federal employees long-term care insurance at a group rate [source: Medicare.gov]. So far, the Older Americans Act also has taken steps toward meeting the future needs of baby boomers [source: U.S. Administration on Aging].

Also, the Community Living Assistance Services and Supports Act (the CLASS Act), set to begin in 2012, is a voluntary government option to fund long-term care insurance [sources: WhiteHouse.gov; Gleckman]. The national program will be the first of its kind to fund long-term care voluntarily. However, experts don't know if it will avoid the same high premiums put forth by private insurance companies (to support an increasing number of disabled people) [source: Gleckman].

To help residents of assisted living facilities and nursing homes, the Administration on Aging has established long-term health care ombudsmen who can offer advice and resources needed to maintain high-quality care [source: National Long-Term Care Ombudsman Resource Center].

How are baby boomers expanding their options for long-term care? That's next.

Why Plan Ahead?

Planning beforehand allows individuals to control and personalize their long-term care. Being prepared expands your options and reduces the chances of having to sacrifice your life savings before becoming eligible for government assistance. Even then, some government programs may only cover nursing-home care rather than allowing people to receive services within the comforts of home. Thinking about long-term care earlier rather than later helps improve the quality of life for retirees and their families, especially if a person becomes disabled unexpectedly.

1: Diverse Long-term Health Care Options

In addition to relying on private insurance, many boomers plan to receive care from family members [source: Merrill Lynch]. Whether boomers move closer to existing family or compensate helpers for long-term care services, one thing's for sure: They want to maintain control over their care, especially if they had negative experiences providing for their aging parents.

Boomers also have more options than before to finance assistance and housing from health professionals. Reverse mortgages, for instance, allow retired people to leverage the value of their homes and use it toward medical emergencies, which often lead to long-term care [source: U.S. Administration on Aging]. Boomers are expected to create more opportunities to transfer the value of existing assets to long-term health care services.

It's possible for baby boomers to self-finance long-term care if they save up enough money on their own, especially if they continue working past the normal age of retirement. Another option is to set up a charitable remainder trusts and use existing assets for long-term care investments, but that usually requires a lot of money to start [source: Medicare.gov].

Regardless of current opportunities, it's likely baby boomers will continue to influence American society with their can-do attitude and creativity.

For more information about baby boomers and long-term health care, visit the links on the next page.

Boomers and Long-term Care: Lots More Information

Sources

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