Gen-X: Unprepared for Long-Term Healthcare Expenses

I came across a very interesting study which was recently published on February 11th, 2009, by American Health Insurance Plans (AHIP) regarding Generation-X’s preparations for financing long term health care. The premise of this study was to gauge the preparation levels of people born between 1960 and 1980 – the study consisted of 1,004 individuals surveyed via telephone interviews in December 2008. The conclusion of the study: Generation-X is in trouble. The economic downturn and lack of planning for has negatively affected Gen-X’s ability to save for their future healthcare needs. The good news – the time is now to educate Generation-Y on how to prepare for long-term healthcare.

Some interesting findings:
Question:
Thinking about the future, how prepared would you say you are for long-term care, should you need it?

Answers:
Extremely Prepared: 11%
Somewhat Prepared: 36%
Somewhat Unprepared: 19%
Not at all Prepared: 34%

Conclusion:
Over half of Gen-Xers are somewhat or entirely unprepared for long-term healthcare

Question:
Thinking about your financial future, which one of the following would you say is the most important concern you have today?

Answers:
Having Enough for Retirement: 22%, primary concern
Being Able to Afford the Cost of Living: 19%, primary concern
Being Uncertain about Things that Could Affect My Family Finances in the Future: 17%, primary concern
Saving for Long-Term Health Care: 12%, primary concern

Conclusion:
Long term care is not a primary concern; most Gen-Xers cite more immediate needs, like saving enough for retirement

Question:
What do you believe your chances are of ever needing long-term care services such as nursing home care, home health care services, or an assisted living facility for more than six months?

Answers:
High: 23%
Medium: 45%
Low: 32%

Conclusion:
Three in four Gen-Xers expect needing long-term care in the future

Other additional findings that support the need for educating Generation-X and Y on preparing for the financial side of healthcare:

· Only 5% of Gen-Xers own Long-Term Care Insurance. Over half non-owners are not informed that their current health
or disability insurance policies do not provide coverage for long-term care
· More than a quarter of respondents do not feel they are taking steps toward financial security
· The current economic crisis has significantly or moderately impacted long term care planning for over half of
respondents.
· Among those impacted, half have stopped planning for their long-term care and one third is devoting fewer
resources to it.

This information is something we, as health and wealth educators, need to take a real hard look at – what are we not communicating to our fellow Americans? We try to educate people on the importance of saving, and we try to make saving retirement a top priority. However we have not done the same for one of the most basic needs with “retirement” for healthcare. As people age, their health problems become more common, and generally much most costly. We need to educate people on how to save separately for both retirement and long term health care. Our economic slump is making it harder to save for your future health care and retirement needs, when your immediate future is looking bleak. I believe that health savings accounts (HSAs) have the ability to help individuals and families save their money now and in the future, despite the economic downturn. With the tax benefits, the lower premiums and lower out-of-pocket expenses coupled with the opportunities for safe investments HSAs offer, the time is now to not only educate our up and coming generations but to push the importance of saving for long-term health care and retirement.

Information taken from: http://www.mylifemyfamily.com/news-room