Long-Term Care Insurance: Are You Covered? Really?

Long-term care insurance -- whether you have it, how much it covers, and for how long -- determines how well you'll be taken care of when you can't take care of yourself.

But, one in four Baby Boomers erroneously believe they have coverage for long-term care expenses, according to a survey from America's Health Insurance Plans (AHIP). The survey found that many Baby Boomers have misconceptions about who pays for long-term care services and have not thought about long-term care insurance.

The survey found that 30 percent of Baby Boomers think they have long-term care coverage, but according to the National Association of Insurance Commissioners, only about 5.2 million Americans have long-term care insurance. Even if all those covered were Boomers, which they are not, that would only account for 6.6 percent of the Baby Boomer population. This means that one in four (25 percent) Baby Boomers erroneously think they are covered for long-term care expenses.

Fifty-four percent of Boomers think Medicare will pay for long-term care services. But, Medicare does not, in fact, cover long-term medical care indefinitely. Medicaid will cover these services, but only after requiring individuals to spend down nearly all of their assets to qualify for assistance.

"Baby Boomers believe they have more coverage than they actually do, giving them a false feeling of financial preparedness to handle long-term care costs," says Robert Moran, StrategyOne senior vice president.

Do you have more questions about long-term care insurance? Check out Boomer Advisor's interview with Marilee Driscoll, author of The Complete Idiot's Guide to Long-Term Care Planning at www.advisor.com/node/12503.