Salient to Investors:

The vast majority of older Americans face steep and rising health-care costs that threaten to bankrupt them and are doing little to protect themselves.

Only 1 in 5 companies with at least 10 employees offers long-term care insurance. Medicare doesn’t cover long-term care. Millions face spending themselves into poverty until Medicaid kicks in – a third of Medicaid’s budget.

90 percent of people don’t buy long-term care insurance policies, which are expensive and confusing. Many leading insurers have stopped selling them. Several insurers stopped selling long-term care products after underestimating how much they would have to pay out in benefits, while low interest rates reduce investment returns on premiums collected.

Bruce Chernof at the SCAN Foundation says we have five years to find a solution. Howard Gleckman at the Urban Institute says there’s not an obvious solution though it might make sense to combine longevity and long-term care insurance in one product. Gleckman says universal coverage is unlikely.

Universal coverage is the only option for Americans too unhealthy to buy long-term care insurance. Insurance companies reject 1 in 5 people who apply for long-term care insurance in their late 50s.

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