Retirement Planning's Greatest Gap: Funding Long-Term Care

Abstract

This Article examines the major missing component of retirement planning - namely, how to finance the potentially explosive cost of long-term care. It begins by reviewing the wide array of long-term care options currently available, including home care, assisted living facilities, and nursing homes. The Article next examines the coverage for long-term care provided by the government health program for older American, Medicare, and private insurance policies that supplement that program. Finding such coverage woefully deficient, the Article then considers the governmental health care program for poor people of any age, Medicaid, and assesses that program's coverage of long-term care and its eligibility limitations as tightened by recently enacted legislation. The Article then turns to private long-term care insurance and analyzes its major components and the various pitfalls that prospective retirees encounter in purchasing such insurance. Finally, the Article critiques the federal government's major initiatives to encourage such insurance - namely, the tax deduction of premiums and coordination of certain long-term care insurance policies with the Medicaid program.