The 70 – 70 – 70 Problem

In a ground-breaking article in the Money Section of US News & World Report (Should Long-term Care Be an Entitlement?) March 25, 2013, Philip Moeller makes the familiar point that the older population that will need long-term care (LTC) is growing and that family members who have historically provided care are fewer in number and scattered all over the globe.

Visitors to this blog are familiar with the attempt to establish a national LTC insurance program (CLASS Act), which was abandoned because of the huge costs required to provide care for all seniors in need.  The annual cost of LTC is currently estimated at $725 billion, $450 billion of which is in the form of unpaid care by loved ones.  And 200 billion of the remaining 275 billion real dollars come from Medicaid, an entitlement rapidly approaching bankruptcy.  Direct personal spending makes up almost all of the remaining $70+ billion, and a mere $7 billion comes from LTC insurance policies.

Bruce Chernof, one of the 15 members of the newly formed national committee to study the LTC crisis, cites a common shorthand for public thinking about long-term care, which he calls the “70-70-70” problem:

• 70 percent of the people over age 65 will need some of long-term care during their remaining lives.

• 70 percent of the public does not believe they will ever need such care.

• 70 percent of the public thinks that if they did need such care, it is already covered by their Medicare insurance. Medicare covers only acute short-term care needs, not long-term care.

This catchy slogan captures the “DENIAL” problem that I have written about extensively in this blog, and Mr. Chernof agrees with all LTC insurance professionals regarding the desperate need for educating the public on these statistics and the importance of reasonably priced LTC insurance.  Each of us can educate the public every time we speak to a local group or association, write a blog or article, or make a one-to-one presentation to a prospective client.