Expert: Long-term care health coverage a hidden casualty of econ...( CHAMPAIGN Ill. Many Americans have ...),Health

CHAMPAIGN, Ill. Many Americans have lost more than just retirement savings amid a year-long economic meltdown that has sliced the U.S. stock market's value by nearly half in a little over a year, a University of Illinois elder law expert says.

Law professor Richard L. Kaplan says many older investors also may now be short of funds for costly long-term medical care such as nursing homes if their health fails during their golden years.

"This is one of those silent crises that people don't think about because they don't get a statement every quarter showing how much their long-term health care risks have increased," Kaplan said. "They get a statement that their 401(k) is down, but most don't relate that loss to their increased long-term-care cost exposure."

Many retirees and workers nearing retirement have counted on retirement savings to effectively self insure against health-care expenses that are not covered by Medicare, such as nursing homes, at-home care and assisted-living facilities, he said.

But those once-healthy nest eggs have collapsed with the stock market, which could ultimately leave retirees unable to pay for long-term-care costs, including an average $77,000 for a year's stay in a nursing home, Kaplan said.

"This is a wake-up call for people who were willing to use their own resources for long-term care expenses, figuring that they'd never outlive their savings," he said. "The point is that now, after a 45 percent drop in the stock market, they just might."

With the market-driven decline in the value of retirement assets, many older Americans may be taking a second look at long-term-care insurance, Kaplan said.

"But that insurance is a risky product that has only gotten riskier in the last few months," said Kaplan, who wrote a 2007 paper that appeared in the Lewis & Clark Law Review calling long-term health-care needs the greatest gap in retirement planning.

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