Long-term care insurance for senior citizens is not as popular as it should be. As people grow older, they start depending on their near and dear ones for their day to day needs. People don’t live in joint families anymore and both partners are generally working these days. This leaves no one to take care of the elderly at home. The answer to this seems simple enough- either old age homes or assisted living facilities or hiring an aid. The options are there, but the problem arises when you have to pay for it and you realise what an expensive affair it actually is. US Department of Health and Human Services estimates the expense at $100,000 a year.
Long-term care insurance was initially offered by multiple insurance houses, but over time the numbers reduced. This was primarily because the insurance houses couldn’t turn these schemes profitable. The life expectancy of people has increased with the advancement in medicine. This means that people will have higher health costs as they live longer. To cover the extra costs, the companies needed to increase their prices which again were not approved by the people-elected representatives who were responsible for regulating the insurance industry.
The companies are losing money on this non-profitable policy, yet they can’t increase their rates to increase profitability. This has caused the insurance industry to contract when it comes to this particular branch. This not only affects the insurance companies but also the common people who now have limited access to such facilities.
Weiling Liu, a new assistant professor of Finance at Northeastern University, studies how business decisions made at some of the largest financial institutions in the world affect the people who depend upon those institutions for their banking, insurance, and more. Most of these decisions have a trickle-down effect on the society which gets overlooked.
Anushka Singh
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