Financing Long Term Care

Paper Summary:

This paper states that concerns about anticipated demographic changes are escalating the financing problem of long-term care for the elderly. The author relates that nursing home care costs can average approximately fifty-five thousand dollars annually per person with many nursing home residents paying the bulk of the rates out of their own pockets. The author believes that a legitimate solution to resolve the problem is to go to a single payer national health insurance program, a single government fund within each state, which pays hospitals, physicians and other health care providers.

From the Paper:

"Some alternative financing options for long-term care financing can emerge from homeownership but the financial industry has to agree that there is a viable reason in pursuing these options. For example, the public in recent years has pursued the home equity conversions but banks have made these instruments remain limited. In the case of fixed-term reverse mortgages, which I discussed earlier, the lending institutions have shown a reluctance to enter into these nontraditional relationships. "The banking industry may have considered the fact that in the situation of where the elderly live longer than expected, it may force the financial institutions to foreclose or postpone claiming their assets. Banks do not like waiting to be repaid, and foreclosing on elderly widows conjures up the worst image of bankers. Neither option is attractive to the financial community." "

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