Long-Term Care Insurance: Is It Really the Answer?

Abstract

As the elderly population continues to age and increase in size, long-term care financing will become an ever-larger problem for the elderly as well as their families and the nation as a whole. Long-term care insurance appears to be a possible solution to the problem of financing long-term care; however, long-term care insurance has many large issues that need to be addressed before consumers or the industry can or will put any confidence in it as a firm solution. This paper will discuss the problem of the aging population in financing their long-term care and discuss whether long-term care insurance is a viable solution. The paper will first discuss the basics of long-term care along with the aging population and the need for long-term care. Then, the paper will turn to the basics of long-term care insurance followed by the role of long-term care insurance in the financing of long-term care. The paper next analyzes the problems with the long-term care insurance market from both the perspective of the consumer and the companies in the industry. Finally, the paper will end with recommendations for trying to sustain the industry along with other potential options to help finance long-term care, which appear to be more sustainable for the companies and more accepted by the consumers.