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Long-term care over an uncertain future: what can current retirees expect?
Peter Kemper1, Harriet L Komisar, Lisa Alecxih
1Department of Health Policy and Administration, The Pennsylvania State University, University Park 16802-6500, USA. pkemper@psu.edu
Summary
Baby boomers retiring soon face significant long-term care (LTC) needs, averaging three years per person. Much of this care represents an uninsured private cost, unequally distributed among individuals and families.
Area of Science:
- Gerontology
- Health Economics
- Public Policy
Background:
- The aging baby boomer generation is approaching retirement.
- Retirees face uncertainty regarding their long-term care (LTC) needs.
- Current policy discussions often overlook the financial risks associated with LTC.
Purpose of the Study:
- To project the LTC needs and associated financial burdens for individuals turning 65.
- To analyze the distribution of care responsibilities (public, private insurance, out-of-pocket) for LTC.
- To highlight the significance of LTC as a distinct financial risk for retirees.
Main Methods:
- Utilized a microsimulation model for projections.
- Analyzed data for individuals currently reaching age 65.
- Quantified projected years of LTC need and out-of-pocket expenditures.
Main Results:
- Individuals turning 65 are projected to need an average of three years of LTC.
- A significant portion of LTC costs will be an uninsured private responsibility, distributed unequally.
- Over one-third may not receive family care, while 30% may rely on it for over two years.
- Half will have no out-of-pocket LTC expenses, but over 5% may spend $100,000+.
Conclusions:
- LTC represents a substantial, largely private financial risk for retirees.
- Policy discussions must include LTC alongside income security and acute care.
- Unequal distribution of care needs and costs necessitates targeted policy considerations.