Yesterday, the CEO of the nation’s largest long-term care insurance company, Genworth, acknowledged the US needs a new model of LTC insurance that includes some government role. Tom McInerney estimated that between half and two-thirds of Americans simply cannot afford to buy insurance in the traditional private market. A 50-something can expect to pay an average of $2,500-$3,000-a-year for a typical policy ($150-a-day for three years, with inflation protection).
And that’s not the only problem. It is impossible to buy private insurance to protect against truly catastrophic long-term care risk of more than 10 years and difficult to buy coverage for more than five years. And perhaps as many as one-quarter of those who would like to buy can’t: They cannot pass the medical underwriting necessary to qualify for insurance.