Recently, Genworth Financial Inc (NYSE:GNW) has taken an initiative to create awareness among the Americans about the health care needs, particularly, long term, which is mostly sidelined by them. The company’s Chief Executive Officer, Tom Mclnemey discussesd in an interview on Bloomberg TV about the importance of the long term care and investor John Paulson‘s proposal to break the company into two parts, during an interview with Bloomberg.
Mclnemey said that the lack of longterm insurance among Americans has less to do with the financial crisis, but more of demographics. He stated that 10 million baby boomers are turning 65 everyday and that is going to continue till 2030, but still less than 10% of Americans have long term insurance.
“I think, it is a multiple problem, low rates and obviously healthcare costs are exploding for long term care. Today the average cost around the country for a private nursing home room is $87,000, it is growing over 4%. So in another 15-16 years, it would double.”
He added that a neglgible percentage of Americans really have any savings close to that. Mclnemey suggested that in order to bridge the gap, it is important for the citizens to start initiating talks within their family and earmark required funds towards this goal.
Genworth Financial Inc (NYSE:GNW) is driving its energy towards long term care awareness among Americans at a time when, giant competitors made an exit from the business on account of negligible profitability. When asked about the need of government regimen in place for the industry to work, Mclnemey replied that people in America depend way too much on formal Medicare or affordable Medicare, which actually does not have long term care. He said that Genworth Financial Inc (NYSE:GNW) is launching a product in July, where customers will be allowed to pick medical premiums, they could afford to buy.
Finally, when being asked about whether he would agree with investor and hedge fund manager, John Paulson to split Genworth Financial Inc (NYSE:GNW)’s business into two separate mortgages, Mclnemey said, “At this point no”, adding that there is a lot of space for improvement in both businesses.