In a recent article for LTCi Insider, Margie Barrie, an insurance agent with ACSIA Partners, helps contextualize COVID-19’s especially significant impact on long-term care providers, including nursing homes, assisted living facilities and carriers. Based on her own survey as well as data from the American Health Care Association (AHCA) and the National Center for Assisted Living (NCAL), Ms. Barrie explains that nursing homes and assisted living facilities have been hit particularly hard, and she outlines several contributing factors.
Occupancy rates are down, reflecting decreases in permanent residents as well as a decreased need for services such as post-surgery rehabilitation. At the same time, costs related to COVID-19, including cleaning supplies and PPE, have increased. As a result, AHCA and NCAL found that 65% of nursing homes and 50% of assisted living facilities are currently operating at a loss, with two-thirds of each estimating they could be out of business within a year. Fears surrounding COVID-19 have instead increased the popularity of home health care.
Ms. Barrie also describes how COVID-19 has affected long-term care carriers. The most common change identified is that carriers continue trending toward issuing hybrid life and annuity products. For these products and traditional products, the surveys show insurers have increased premium rates and implemented stricter underwriting requirements in order to deal with the pandemic. Some examples include postponing applications where individuals came into contact with someone who tested positive for COVID-19, are quarantined themselves, or are hospitalized.
For more information see COVID-19 and Long-Term Care: LTCI Insider (January 30, 2021). (We note that Ms. Barrie has also drafted a white paper on this topic).