Changing Aging

I like Nebraska’s thinking on saving for aging services.  What do you think?  Taking a leadership role they’ve launched a savings option called The Long-Term Care Savings Plan. 

Here are some key elements of the first such state plan in the United States:

- You can put $1,000 ($2,000 filing jointly) in an account to qualify for savings that’s state-tax free until withdrawn.  They’re looking to increase those contribution limits.

- When withdrawn they can be used to pay for a multitude of aging services, including home care, nursing care, assisted living, technology and other services.

- If the account is not used, and the account holder dies, it can be passed on to a spouse or other family members.

- At the age of 50, the account holder can withdraw savings tax-free to pay for long-term care insurance.

 There are a number of appealing things about Nebraska’s program:

- It elevates the importance of planning ahead for aging services and makes you think about how you want to live if you need assistance or care.

- It allows you to save money beyond traditional retirement accounts.

- It gives you flexibility.  You ultimately determine what services your dollars buy.

- If you want to buy long-term care insurance, but don’t want to buy it in your 30s and 40s (which the vast majority of Americans don’t), you can use your savings to pay for premiums later in life.

- You can pass the accumulated savings to heirs for them to use to pay for aging services, undescoring the need that even though we might come from different generations, we likely all will have the need for some type of assistance and care.  And we have to pay for it.

Because there are approximately 77 million baby boomers in America and 1.5 million in Minnesota, we talk a lot about the baby boomers and their impact on senior housing and services, but the true next generation of seniors is the “Silent Generation.” 

Gene Dolloff, who heads senior dining services at Morrison Management Specialists visited Ecumen recently and shared with us interesting information on the Silents. Morrison serves approximately 400 senior housing communities in the United States and many continuing care retirement communities, which are popular in other parts of the country, but haven’t hit Minnesota. Morisson’s research is qualitative and quantitative.

Here are some interesting items from Morrison’s research as to how Silents (which were born between 1925 and 1942) differ from the GI Generation:

- Silents are more assertive, questioning than GIs.
- They travel more.
- More independent, demonstrate more control over choices.
- Less formal, more social, more vocal
- More health and fitness conscious
- More educated

Looking at some of the key characteristics of Silents, it’s clear that they’re going to demand different senior housing options and services as they age. Innovation can’t wait for the baby boomers.

It is often said that insurance is sold not bought. But when it comes to long-term-care (LTC) insurance, it’s neither sold nor bought. Insurers are apparently having a tough go convincing Americans to buy insurance that could cover the costs of health expenses, home health aides, assisted-living facilities and nursing homes, among other items  . . . . This is the intro from an interesting article by Robert Powell at Marketwatch.com.

The fact is that the American public is just absolutely wary of long-term care insurance products. What an opportunity for insurance companies to develop new hybrid products that the next generation of seniors see value in right now. Genworth Financial really starts to hit the mark with their “100+ stories” featuring centenarians who planned ahead. As the voiceover says . . . there’s a difference “between living long and living well. That’s an important point for senior housing and aging services professionals.

You can read more about what Minnesota baby boomers say about long-term care insurance as they look ahead to being Minnesota seniors by reading our Age Wave Study. It’s clear to them that aging is all about living and they want the senior housing, insurance options and public policy that help them live the way they want to.

Posted by Kathryn Roberts, CEO and President, Ecumen 

Last week Neal St. Anthony of the Minneapolis Star Tribune did a great story on boomers planning for retirement.  He used information from the Ecumen Age Wave Study.

What I hope that people took away from that is that we need new savings products that our future seniors see value in to purchase today to help them pay for senior care if they should need it.  For most people, the current long-term care insurance product isn’t it.  Most baby boomers find long-term care insurance difficult to understand.  And baby boomers see it as a product they won’t need for years, so they don’t even consider it today.

I’m a big advocate for hybrid products, as Donna O’Rourke discusses in her story “Hybrid Long-Term Care Might Be Right For You.” on TheStreet.Com.  As she points out there are few of those products out there today.  Message to financial companies, insurance companies and state insurance commissioners . . . Boomers want these products. 

We have to change how people pay for their care, so that people can have the retirement they have worked for and that we can preserve dollars to pay for dignified, high-quality care for those people who cannot afford it.  Retirement planning can’t end with the mortgage and car payments.