4 Reasons Americans Skip LTC Insurance

Many Americans who could buy long-term care insurance (LTCI) don't. Why?

Are the decisions a matter of taste, the result of confusion — or, perhaps, the result of a lack of understanding that LTCI exists?

The SCAN Foundation, a think tank that aims to study and improve senior care, recently tried to get answers by working with Gary Langer, the former ABC director of polling, to do a survey with a little more depth than many other long-term care (LTC) planning surveys.

The foundation commissioned a telephone survey of 1,019 U.S. adults ages 40 and older, then had Langer do a study that included a sometimes-biting review of other LTC planning survey efforts and a more detailed set of questions than insurers, insurance trade groups or even government agencies typically use.

Bruce Chernoff Langer found, for example, that high-income consumers with at least some college education were much more likely to own private LTCI than other consumers.

Bruce Chernof (left), the president of the foundation and the chair of the federal Commission on Long-Term Care, took time recently to talk about what the study says about four things we know, and don't know, about LTC planning.

1. Confidence.

Langer and the foundation survey team thought hard about consumer confidence while doing and writing up the survey.

The researchers found, for example, that confidence may correlate with education and income but also seems to have a separate, positive influence on the likelihood that people will buy LTCI coverage.

Lack of confidence shaped the actions of two of the five groups the researchers came up with.

Some consumers were unaware of the need for LTC planning, and others were too busy to plan. Some had already bought private LTCI or made other arrangements for taking care of LTC needs.

But one group that was affected by lack of confidence consisted of people at a crossroads: "People who think they might need long-term care in the future, but are unsure."

Another group affected was pessimistic people: People who think it's too late to plan for Medicare and think that making plans is futile. "They are counting on Medicare to cover their costs," Langer said in the report.

In the interview, Chernof said confidence is an important independent variable that correlates with good performance, Chernof said.

"Confidence equates with planning," Chernof said. "Not just planning, but effective planning."

2. Awareness.

In the survey report, Langer noted that 65 percent of Americans ages 40 and older said they'd done little or no LTC planning, and that barely half were confident that they knew where to go for LTC planning information.

That lack of awareness suggests that simply giving people confidence about knowing where to go for information could help, Langer said. "The process of gaining information may produce greater awareness that, in turn, bolsters support for fresh approaches to long-term care policies and programs," he added.

Chernof said LTCI agents should recognize that simply helping people become aware enough that they know they ought to plan could help.

People "don't generally think this will happen to them," Chernof said. "The reality is that this is a common thing."

3. Words.

Chernof thinks, based on separate focus group research the foundation is conducting, that many people may be missing out on public and private LTC planning resources because the developers of the resources use the wrong words.

People like words like "independence," "choice" and "dignity" more then they like "nursing home," Chernof said.

The foundation created a "word cloud" based on the words used during the focus group discussions, and words like "active," "community" and "secure" were much more visible than most words having to do with medical care.

4. Products.

Chernof said he thinks one area for further research is how LTCI products and other LTC planning products could be made more attractive to consumers.

Cost may be one factor, but it's not clear that that's the only factor, he said.

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