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Most Americans over the age of 45 are in for sticker shock if they or a loved one ever requires long-term care, according to the results of a new survey by the AARP.
The AARP survey, entitled The Costs of Long-Term Care: Public Perceptions Versus Reality, asked Americans age 45 and older a range of questions designed to measure their understanding of the costs and funding sources associated with three types of long-term care: nursing homes, assisted living facilities, and home care.
The results show that Americans age 45 and over generally do not know how much long-term care services cost. For example, only 15 percent could estimate the cost of nursing home care within 20 percent of the national average of $4,654. Another quarter (24 percent) did not know the cost, while more than half (51 percent) estimated the cost too low.
Respondents didn't fare much better in estimating the cost of an assisted living facility, with only one in four (27 percent) coming within 20 percent of the $2,000 to $2,500 median monthly cost of such a facility, and 38 percent saying they did not know.
The study also suggests that many Americans over age 45 are deluding themselves about who will pick up the tab for long-term care should they ever need it. About three in ten (31 percent) of respondents said they have insurance that covers the costs of long-term care. In fact, the Health Insurance Association of America estimates that only about 6 percent of Americans purchased such insurance.
There is also a discrepancy between what people think Medicare and Medigap cover and what they actually cover. More than half (55 percent) of the respondents, including those who said they are "very familiar" with long-term care (58 percent), mistakenly believe Medicare covers long-term nursing home stays. Nearly a quarter said they would rely on Medicare to pay for such stays.
Meanwhile, four in ten (41 percent) thought Medicare covers assisted living care and more than one in three (34 percent) didn''t know whether it does or does not. (Medicare does not pay for assisted living.)
Overall, Americans age 45 and older are split as to whether they feel prepared to meet the financial challenges associated with long-term care. About half (49 percent) felt "very" or "fairly" prepared, while 46 percent said they are "not very" or "not at all" prepared.
AARP CEO Bill Novelli said that the organization 'will use the findings from this survey to educate our members, the public, and policy-makers about long-term care and its costs for individuals and their families. Equally important, we will continue to advocate for the support for long-term care that people want and need in their homes and communities."
The survey was conducted by RoperASW on behalf of AARP. The results are based on telephone interviews with a random sample of 1,800 Americans age 45 and older. In addition to the national survey, five state-specific surveys were conducted with a random sample of 400 people age 45 and over in California, Florida, New Mexico, Washington, and Wisconsin.
To read the report's Executive Summary or to download the full report in PDF format, visit www.aarp.org/press/2001/nr121101.html.