LTC Bullet:   Educating the Educators

Friday  June 29, 2001


***This Bullet is sponsored by the National LTC Network, "Partners in Long-Term Care Coverage, Design, Education and Distribution." Visit the Network online at Contact Allen Mansfield, Executive Director, at 800-996-6789 or for more information. Thanks so much to Network members for their generous support of the Center and commitment to keeping LTC Bullets free to everyone. Find out how you can sponsor LTC Bullets or other Center activities (e.g., articles, speeches, conference exhibits) by contacting Amy Marohn at 425-467-6840 or***

In her article, "Women Boomers Often Neglect Their Own Financial Planning," (National Underwriter, 6-18-01, p. 28) author Marcella DeSimone highlights the finding of a recent survey of American baby boomer women conducted by Prudential Life Insurance Company.  According to Simone, "seventy-eight percent [of survey respondents] said securing long-term or institutional care insurance is important and 61% said they understand that nursing care can be very expensive.  But only 50% said they know first-hand about the actual costs of long-term care and only 5% of those surveyed own long-term care insurance policies." 

At first blush, these survey findings appear irrational.  If baby boomer women really are worried about long-term care costs, why are so few doing anything to prepare?  Why do most people, in fact, ignore long-term care planning despite a professed knowledge of the costs and risks of doing nothing?  Is more education the key to motivating people to plan ahead?  Or do efforts to educate about the supposed "long-term care risk" only confuse people whose experience of long-term care differs dramatically from what they're being told?

The Center for LTC Financing has a pretty good idea why consumer education efforts to-date have not produced results.  Below is an except from Center Executive Director David Rosenfeld's remarks delivered at the National Endowment for Financial Education's (NEFE) "Long-Term Care Think Tank" in Phoenix, AZ on May 7, 2001.  The goal of the event was to develop strategies to motivate consumers to begin planning and preparing financially for their future long-term care needs.  For more information about NEFE, go to or call 303-741-6333.

Here is the excerpt from Mr. Rosenfeld's remarks:

"NEFE's goal of motivating consumers to begin planning for long-term care (LTC) could not be more timely as our 77 million-strong baby boom generation struggles with their parents’ long-term care and soon enough, with their own.  Effective consumer education is critical and the sooner the better. 

"Consumer education must be approached, however, with an appreciation of its public policy context.  Delivering facts and figures demonstrating ‘the LTC risk’ or the impact of caregiving, for example, will not motivate most people to act unless educational efforts reflect the reality of current consumer behavior.

"Today, this nation’s public policy encourages people to ignore the risk of long-term care.  For the past 35 years, with every good intention, the state and federal governments have paid for long-term care through Medicaid and Medicare after a health crisis occurs. 

"People only plan for real risks.  As long as they can ignore the risk of long-term care, avoid insurance premiums and financial planning fees, wait to see if they ever need expensive care, and if they do, transfer the cost to taxpayers, most folks will not buy long-term care insurance or otherwise plan ahead.  This goes a long way to explaining why less than 10 percent of seniors and very few baby boomers have purchased long-term care insurance (LTCI) or otherwise planned for long-term care.

"Most Americans are not consciously planning to rely on Medicare or Medicaid years down the road.  Most people have no idea who or what pays for long-term care.  Instead, the reality of how long-term care is, in fact, funded has anesthetized nearly everyone to the issue and, therefore, planning behavior is almost non-existent."

* * *

"Proactive efforts to motivate LTC planning will likely succeed to the extent they respond to the underlying basis for the public’s current behavior.  The public ignores the risk of catastrophic LTC costs because they can.  Our public programs may not provide the best care in the most desirable setting, but care is available to nearly everyone without any pre-planning. 

"Supposedly perplexing survey results make a lot of sense when you view them through this lens:  In one of the most recent long-term care surveys--a March 2001 U.S. Chamber of Commerce survey of its members--respondents were asked: 

"'Given the current average cost for assisted living and eldercare services ($45,000 to $54,000 per year) to what extent is the cost of long-term care a concern to you as an individual?'  Sixty-three percent said it is 'very much of a concern' or 'a significant concern.' 

"Respondents were asked, 'Does your current financial planning take into account the likely expense of  long-term nursing home, assisted living, or in-home care for yourself and/or your family?'  Seventy-six percent said 'no.'

"Finally, respondents were asked, 'Do you currently own any long-term care insurance policies?'  Eighty-six percent said 'no.'

"The 1998 Roper Survey in our [conference] materials presents a similar picture.  Sixty percent of respondents indicated they were either 'somewhat' or 'very' concerned about affording long-term care someday.  Forty-nine percent were aware of LTCI.  But only 8% had purchased it.

"These and other surveys reveal the public does understand that long-term care is expensive in a myriad of ways on everyone involved.  These surveys also reveal, however, that the public knows or at least senses--although it goes unspoken--that someone or something else pays if and when the worst happens.  This is why the public can appreciate the risk of expensive long-term care on the one hand, and do nothing about it on the other.

"Even the ‘Background’ paper [for this conference] states that 'consumers seem to be experiencing a disconnect.  They are aware of the problem . . . but . . . haven’t begun to seek or act on a solution.  The message Americans are not getting is that, unless they choose to impoverish themselves in old age, they must take the initiative in planning and preparing financially for their long-term care needs.'  With all due respect, Americans are hearing this message, but aren’t acting because the message doesn’t comport with their reality.

"Now, if ‘losing everything’ isn’t a real risk of not planning ahead, then what is in jeopardy?  In today's public policy environment, the focus of education must be the benefits afforded by paying privately with insurance, savings or investments--namely access to top-quality care at the most appropriate level.  These access and quality advantages must be contrasted to the risks of relying on our already overburdened public programs, namely exposure to problems of quality, access, reimbursement,  discrimination and institutional bias.

"The Center for LTC Financing does not criticize our public programs or the care they provide with the intent to assign guilt or responsibility for our financing crisis or the dearth of planning behavior on the part of the public.  It is critical, however, to educate Americans about the impact of the chronic underfunding and overutilization of these programs and how it may affect care options and quality on an individual level."