Working Americans often look wistfully to retirement — their golden years. But the stark reality is that they and their families are often unprepared for the financial challenges that lie ahead.

Roughly half of all Americans who turn 65 this year will one day need a high level of help walking, eating, and even getting out of bed. In 50 years, older Americans with this level of need will rise to 16 million, up from 6 million today.

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The cost of providing daily assistance can be staggering. Individuals and their families often shoulder large portions, depleting personal savings and retirement accounts in the process. Relatives and friends provide the bulk of care to loved ones — a situation that can create its own issues, including missed work, retiring early, and emotional and physical strain. And these issues disproportionately affect women.

Added to this mix is tremendous uncertainty about the level of care needed, how it might change over time, and how long it will last. While half of Americans turning 65 now will not incur out-of-pocket expenses for this high level of help, 15 percent will incur lifetime costs of $250,000 or more.

Some private long-term care insurance policies are currently available to help cover the costs.  However, these policies generally come with a hefty price tag and many people due to existing medical conditions may not qualify. Few Americans presently have this type of insurance to help cover long-term care expenses. People can qualify for Medicaid to cover needs, but only when their resources and lifelong savings are exhausted. This presents real challenges for people and families, as well as strain on state and federal budgets.

New solutions need to be explored now so that Americans with daily needs can receive high-quality care with dignity, respect, and choice — and prevent them or their families from bankruptcy in the process.

The SCAN Foundation, in partnership with AARP and LeadingAge, enlisted the Urban Institute and actuary group Milliman, Inc. to develop new information on public- and private-sector options for financing the long-term care needs of older Americans. 

Using this new modeling tool, we can now compare a variety of options for improving individuals’ ability to pay for their long-term care needs. Some of the options focus on what individuals need at the start of their long-term care journeys, while others explore coverage for the latter stages of care. This much-needed analysis gives us an opportunity to compare different designs across consistent measures, such as likely participation rates, affordability, estimated out-of-pocket spending, and the effect on Medicaid.

Ultimately, results from this modeling effort represent a small sample of the myriad options that exist. Each involves tradeoffs; all require closer analysis. Without endorsing any one option, this is the first time in several years that we can apply real numbers to what are usually abstract conversations. That's a giant step forward.

Forging solutions will require a lengthy process of dialogue and compromise, and bipartisan political will is necessary for action. But American families deserve affordable, accessible solutions to the long-term care financing crisis. It’s time to get this conversation going.  

Chernof is president and CEO of The SCAN Foundation; Minnix is president and CEO of LeadingAge; and Whitman is chief public policy officer for AARP.