Financing long-term care (LTC) remains a major challenge for older Americans. The lack of private long-term care insurance or other mechanisms for paying LTC costs leads many to spend down their assets in order to qualify for Medicaid, which remains the single largest payer of LTC costs in the nation. While healthcare costs in retirement are better covered through various forms of insurance, an unexpected healthcare shock can still lead to large costs for older households. Moreover, many households underestimate the potential impact of healthcare or LTC shocks during retirement. Recent research from the Center for Retirement Research at Boston College sheds light on how older households actually respond to unexpected healthcare or LTC shocks.
How Do Retirees Cope with Uninsured Healthcare Costs?
