Long-term care coverage: the need is now

As the world population steadily ages, the future of America's long-term healthcare system is facing a major crisis. By the year 2050, approximately 22 percent of the United States population is expected to be over the age of 65 and more than 19 million Americans will require long-term care. Long-term care financing will be increasingly important, since nursing home care can lead to financial catastrophe. The key to preventing this catastrophe for the elderly is appropriate third-party coverage. Although more insurance companies are offering long-term care policies today, three major obstacles to the success of such insurance remain: lack of knowledge about the extent of public funding for long-term care, denial of the need for such insurance, and lack of public awareness of potential liabilities inherent in financing long-term care. Congress is supporting the development of long-term care insurance, and states are placing long-term care legislation at the top of their agendas. Tax incentives have been proposed in the form of tax-free individual retirement accounts to finance long-term care, individual medical accounts, tax credits for policyholders, and favorable tax treatment for employers who offer long-term care benefits. But only coordination of public and private financiers will ensure adequate protection for all consumers of long-term care services.