There is a good article today in the Star Tribune of the Twin Cities area covering long-term care insurance and the overall long-term care quandary we face as a nation with respect to aging and its huge associated costs.  We’re not alone in our aging population though.

Yesterday I was listening to an analyst from UBS who studies aging and demographic trends.  The premise of the Bloomberg podcast was that aging in America will have enormous complications in the future to our economy and our infrastructure.  Baby boomers have not done an adequate job in reproducing themselves, leading to a future problem.  Many refer to the children of the baby boomers as the “echo” and they are merely a replacement to their parents.

Because of all this, we face future economic issues as a country.  However, as individuals, we can purchase long-term care insurance and protect our families.  The article comments emphasize an important point: buy long-term care when you are healthy.  Statistically, this should be in your 40s or 50s.  When we look at people in their 60s, about 25% are uninsurable by this point.  By the 70s, almost half of applicants who want long-term care insurance cannot get it - they are declined by the carriers.

The surprising fact for many is that China is on the path to an even worse future than America with regards to population growth trends.  In fact, in just a few years, India will surpass China in population.  China is shrinking and will have some serious difficulties starting in about 2040.

The problem with China is that China does not have long-term care insurance; we should all feel fortunate to live in a country where we have institutions like LTC insurance.  As the article states, last year, more than 180,000 policyholders received over $3.5 billion in long-term care benefits.

Today on Beaconcast, a news site serving Roswell, GA, there was an opinion piece that revolves around the premise that the long term care crisis is no longer pending; it is upon us.  Now.  With recent front page stories in the Wall Street Journal and many other papers around the country starting to hone in on the crisis, the hope is that consumers will begin to pay closer attention to long-term care and their future needs.

With recent Medicaid cutbacks, some nursing homes are no longer making a profit.  One example raised in the article was a home in Troy, Michigan, where the home was losing about $25 per day per resident.  Those numbers cannot go on, but things are being pinched from all directions.  And even worse in this case: the state required an extra nurse be added per shift, at a cost of over $100,000.  So the states, those lovely darlings, are simultaneously cutting funding and raising the cost of care.  Fantastic.

Long term care insurance is the only way out of this crisis.  Legislators and insurance companies need to come together now more than ever in order to come up with viable solutions for a long-term project that will both encourage consumers and protect them at the same time, fostering the sale of long-term care insurance.