RICHMOND, Va.--(BUSINESS WIRE)--Sept. 25, 2002--GE Financial Assurance (NYSE:GE)-- While A Majority Have Taken Steps to Prepare for the End of Their Life, Fewer Than Half Are Preparing for the Continuation of Their Life Second Annual National Long Term Care Awareness Day(SM) Promotes Awareness, Education and Dialogue As part of the Second Annual National Long Term Care Awareness Day(SM), the GE Center for Financial Learning, an objective Web-based education resource for personal finance, today released the results of a national survey examining Americans' preparedness - or lack thereof - for their long term care needs. The findings revealed several myths and misperceptions among older Americans and their children that will have devastating consequences if not overcome quickly.
The study of 512 Americans age 45 and over, conducted by Peter D. Hart Research Associates, found that 85% of adults living independently suffer from the misperception that they will never need long term care, requiring changes such as moving in with relatives, hiring an in-home professional nurse or relocating to a retirement home. In reality, established research demonstrates that more than 70% of Americans over age 65 will need some sort of home health care. Top myths uncovered by the study include the following:
MYTH #1 The Government Will Take Care of Me
Even among people who anticipate a need for professional care, nearly half the respondents (44%) believe that long term care costs will be covered by their insurance, Medicare or Medicaid. In reality, Medicaid will only pay for long term care costs your own income does not cover. Additionally, each state is required to try to recover money from your estate to cover what it spent on your nursing home care.
The results of this study underline the alarming lack of knowledge about long term care financing. Unfortunately, most people do not realize that they need to start considering their long term care plans well before they reach retirement age, said Tom Scully, Administrator for Centers for Medicare & Medicaid Services. We hope that programs like the Second Annual National Long Term Care Awareness Day will help educate consumers about the various aspects of long term care planning and motivate them to develop a plan for their future.
MYTH #2 My Children Will Take Care of Me
Forty-two percent of adults living independently believe that should it become necessary, long term care assistance would be provided mainly by a family member, yet almost one out of every four (23%) parents admit their family members don't have enough time or money to help them. Compounding this misperception is the fact that less than half (48%) of this same group have actually discussed this eventuality with their children and nearly 20% fear that their children would react negatively if they brought up the subject. However, 58% of adult children feel that it would be appropriate for their parents to initiate this conversation and would welcome it.
I urge families to talk about the importance of long term care assistance, added U.S. Rep. Karen Thurman, who represents the 5th District of Florida and who is the author of a measure called the Long-Term Care and Retirement Security Act of 2001 (HR 831) designed to help more Americans afford the costs of long term care. When my late mother became seriously ill, we used home health care services to keep her at home for as long as possible. This made a huge difference in her quality of life. While mother didn't have a long term care plan or a great deal of savings, we were fortunate to be able to cover the out- of- pocket expenses for home health care. Many people, however, cannot afford the ever-increasing costs of long term care. That's why having a long-term care plan is so important. It's a way of preparing for the expense and making sure your loved one has the best care possible.
MYTH #3 We Don't Need to Talk About Long Term Care
The majority of respondents (70%) agree that it is important for people to talk to their family members or friends about a plan of action, should they need some sort of long term care, yet fewer than 11% of adult children who have not already had this conversation with their parent plan to do so before the end of the year. The biggest barrier to having this conversation for adult children is the belief that their parents' view on long term care is their personal business(26%). Yet only 9% of elderly parents in this survey say they actually feel this way.
Too often, families wait until some sort of catastrophe occurs, such as a serious injury or an illness, before deciding on a plan of action, which severely limits their choices and can put significant financial and emotional strains on the family, said John F. Kearns, JD, Certified Elder Care Attorney, Fellow of NAELA and Advisor to the GE Center. The goal of the Second Annual National Long Term Care Awareness Day is to break that `Silent Dance(SM)' and promote a dialogue to ensure that all Americans get the care they want, when and where they want it.
About The Second Annual National Long Term Care Awareness Day
The Second Annual Long Term Care Awareness Day is sponsored by a coalition led by the GE Center for Financial Learning. Coalition members include The Alzheimer's Association, the Centers for Medicaid and Medicare Services, The National Alliance for Caregiving, National Family Caregivers Association, Rebuilding Together, Visiting Nurses Association of America, The Women's Institute for Financial Education (WIFE) and ThirdAge Media.
The GE Center established the first National Long Term Care Awareness Day in 2001 with the theme of Awareness - Education - Dialogue. The Second Annual National Long Term Care Awareness Day was set aside to encourage Americans to think about long term care, educate themselves about long term care options and begin discussions with their families.
The cornerstone of the Second Annual National Long Term Care Awareness Day was a panel discussion, featuring Jay Kearns; Mary Furlong, Chairman and Founder, ThirdAge, Inc.; Gail Gibson Hunt, Executive Director, National Alliance for Caregiving; Suzanne Mintz, President and Co-Founder, National Family Caregivers Association; and Tom Scully, Administrator, CMS, Department of Health and Human Services. The panel focused on a variety of issues surrounding long term care, including the psychological mindset of an aging population and the barriers to addressing long term care. The goal of the discussion is to help set the tone for generating awareness and sparking a dialogue on a broad scale while building momentum for years to follow.
One of the aims of the GE Center for Financial Learning (www.financiallearning.com) is to redesign the retirement experience and financially empower Americans by providing objective information that helps generations work together to better understand their long term care options. The site is free and helps people look at long term care as a positive part of retirement by providing them with the tools to educate themselves on how to prepare for aging, death of a spouse, and financial independence.
The award-winning GE Center is the first uniquely objective, impartial Web-based financial education resource for information on personal financial and life-event planning designed for consumers. Along with long term care issues, the GE Center is dedicated to improving overall financial literacy among Americans. It does not sell financial products or services from any company, nor does it promote or advise on financial products or providers. A 12-person volunteer Advisory Board upholds the high level of excellence for the GE Center for Financial Learning by ensuring the objectivity of all information provided on the site.
GE Financial, the developer of the GE Center is the consumer insurance and investment arm of GE Insurance, an integrated family of companies committed to helping people create and preserve wealth, protect assets and enhance their lifestyles.
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HOW OLDER AMERICANS APPROACH LONG TERM CARE ISSUES
From September 10 to 12, 2002, Peter D. Hart Research Associates conducted a national survey for the GE Center for Financial Learning among 512 Americans age 45 and over. The sample includes 261 adults age 45 to 64 and 251 adults age 65 and over, with age weights applied so that the sample accurately reflects the population age 45 and over. The sample includes 222 Americans age 45 and over who have living parents or parents-in-law and 278 Americans who have adult children age 35 and over. The statistical margin of sampling error is +/-4.4% for the overall sample of older adults, and higher for specific subgroups.
A CONVERSATION IN HALF OF AMERICAN HOMES.
Half of Americans age 45 and over have been involved in a conversation between the generations about parents' preferences for their later years, maintaining the highest quality of life possible for their age and health, and planning to meet long term care needs.
-- Whether it is adult children talking to their parents about planning for the latter's future long term care needs (49%), older parents talking with their adult children about their own long term care needs (48%), or married couples talking with one another about their own long term care needs (50%) or those of their parents (54%), half of each group report having had this conversation.
-- Among those adult children and parents who have had a conversation about planning for a parent's long term care needs, the vast majority (92% of parents and 82% of adult children) say that it was productive and worthwhile. However, among those who have not had such a conversation, expectations are substantially more mixed.
-- Most parents (64%) expect that their adult children would react positively if they broached a conversation about planning for their long term care, and most adult children (58%) believe that it would be appropriate for their parent to initiate the conversation. Yet, these numbers leave many people in both categories unsure or pessimistic about the prospect, especially when compared with the positive experiences of the families who have had the conversation.
-- The expectations of adult children are even more pessimistic, with only 42% of those who have not had a conversation expecting a positive result, even though 57% of parents feel that it would be appropriate for their adult children to raise the issue.
-- Even with substantial proportions affirming the importance of having such a conversation (72% of adult children with living parents, 66% of parents of adult children), only 9% of the parents and 11% of the adult children say it is likely that they will have the conversation by the end of this year.
AMERICANS ARE NOT OVERLY CONCERNED ABOUT PLANNING FOR LATER YEARS EVEN IF THEY SHOULD BE.
Even if they have done little or no planning, most Americans age 45 and over do not express concern about their living situation, quality of life, or ability to get needed day-to-day help from others as they get older.
-- When it comes to concerns about aging, older Americans are most concerned about having enough savings for retirement (40% worry a great deal/fair amount).
-- Adults are slightly less concerned about their living situation and quality of life as they age (33%) and are even less worried about being able to get the help of others with day-to-day activities as they become older (26%).
-- Members of the younger age group surveyed are notably more worried about these issues than are the older generation. Half (51%) of Americans age 45 to 64 worry a great deal or a fair amount about having enough savings for retirement, whereas just 22% of those age 65 and over display the same level of concern. By 40% to 22%, those in the younger age group also express greater concern about their living situation and quality of life as they age.
-- Adults with living parents or in-laws are as concerned about their parents' living situation and quality of life (43%) as they are about their own living situation and quality of life (40%).
SOME ATTENTION PAID TO FINANCES, LESS ATTENTION PAID TO QUALITY OF LIFE.
Many older Americans have saved at least some money for their retirement (74%) or prepared a will (66%), but comparatively few have taken steps to ensure the best living situation and quality of life for themselves as they age.
-- Only one in four older Americans (25%) have purchased long term care insurance, and the same proportion (25%) have moved to a new home or made modifications to their home to make it easier for them to live in as they age.
-- Fewer than one-third (31%) of seniors age 65 and over have purchased long term care insurance and the same proportion (31%) have made housing changes that will make day-to-day living easier as they age.
-- Whereas 46% of older Americans confirm that they have a good plan in place for their long term care needs or that they have begun to make a plan and only need to do a little more planning, fully 53% say that they need to do a lot more planning or have not even begun to make a plan.
-- Even among seniors age 65 and over, fully two in five (41%) either admit that they still need to do a lot of planning (13%) or have not even begun to plan (28%).
MANY OLDER AMERICANS HAVE UNREALISTIC EXPECTATIONS.
Few Americans age 45 and over believe that it is likely that they will need assistance with day-to-day living as they get older; and if they do need professional care, many expect that their private health insurance or Medicare will cover the costs.
-- Among older Americans who currently live independently, just 15% think it is extremely or very likely that they will need assistance with day-to-day living as they get older.
-- When asked how they expect to get assistance if it ever became necessary, 41% of those who live independently believe that assistance will be provided mainly by family or friends and 44% think it will be provided by a nurse or professional caregiver either in their own home (26%) or in a nursing home (18%).
-- Among those who expect that care would be provided mainly by a nurse or professional caregiver, 47% believe that the costs of this professional care will be covered by their insurance, 29% think it will be covered by Medicare, and 17% think it will be covered by Medicaid.
PARENTS AND CHILDREN GIVE DIFFERENT REASONS FOR WHY THEY HAVE NOT HAD A DISCUSSION ABOUT PLANNING FOR PARENTS' LONG TERM CARE NEEDS.
-- Both groups (especially parents) simply believe that the conversation is not necessary because the parent will live independently for quite some time.
-- Nevertheless, each generation indicates that some barriers
exist to their initiating the conversation. Among the adult children, 26% worry that their parents would view the conversation as an intrusion into their financial affairs, whereas 23% of parents express concern that the conversation would be an imposition on their children's limited time and money. The encouraging news is that parents and children indicate that neither of these concerns is valid.
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REASONS CHILDREN AND PARENTS HAVE NOT TALKED ABOUT PARENTS' FUTURE LONG TERM CARE NEEDS
Adult Children Parents ofwith Living Parents Adult Children % % Parents are in good health and expected to live independently for quite some time 23 47 Child has too many of own responsibilities and not enough time or money to help parent 7 23 Parents or one of siblings has already planned for parents' long term care 16 18 Child does not know much about how to plan for long term care needs, so would not be much help 9 12 Child/parents not comfortable talking to parents about health or becoming ill 9 11 Parents view this as their personal business and would not want child intruding on their finances 26 9
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-- Among adult children, women are more likely than men to think that there is no need for the conversation: 49% believe that their parent will live independently for a while or that their parent or another family member has already made a plan, whereas only 30% of men cite one of these as a reason not to raise the issue.
-- Among men, 26% say that they are uncomfortable with this discussion or don't know enough about long term care to solve their parents' problem, versus 10% of women who select one of these responses as a reason why they have not broached the topic.
STAY FOCUSED ON THE POSITIVE.
The most persuasive reasons why parents and adult children should talk about parents' future long term care needs are that it gives parents more freedom and choice in decisions about their long term care.
-- Among seniors who have children age 35 and over, 53% agree that advance planning giving parents more freedom and control over specific decisions about their care is a very persuasive reason to have a conversation with their adult children, and 56% of adult children with living parents or in-laws agree. The other very persuasive argument is that advance planning leaves less room for confusion and disagreement among family members: 52% of parents find this reasoning very persuasive, as do 61% of adult children.
-- Other arguments that stress reducing the burden on the next generation prove to be less persuasive than arguments that focus on the positive benefits of more control and fewer disagreements.
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