The pandemic shifted the way a lot of Americans view long-term care and insurance according to a new LIMRA survey.* LIMRA says more than a quarter (26%) of the people it surveyed say they are “extremely or very likely” to consider a combination/hybrid life product when shopping for insurance (a life policy with an LTCi component). In 2019, that number was just 17%. More than a third (36%) said they were “somewhat likely” to consider it.
An astounding 88% of Americans would prefer to receive any ongoing living assistance they need as they age at home or with loved ones, according to a new nationwide survey released this week by The Associated Press-NORC Center for Public Affairs Research.
Furthermore, 69% of participants reported they have done only a little or no planning for their long-term care needs, and 49% of participants over the age of 40 reported that they expect the majority of their long-term care costs will be paid by Medicare. Considering Medicare currently covers very limited long-term care costs, and the Medicare trust fund is at risk to become insolvent in the near future, 89% of participants reported that strengthening the Medicare trust fund should be a priority for the Biden administration and Congress.
The cost of long-term care services continued to rise during the pandemic, and many care providers expect their clients’ costs to increase significantly in 2021.1 A new Willis Towers Watson Insurance Marketplace Realities 2021 Spring Update (“Spring Update”) concludes that 2021 will continue to squeeze long-term and senior care providers from both sides—with general and professional liability insurance rates predicted to increase by 30% or more, and a persistence of 2020’s overall reduced liability capacities in the market for the long-term care provider sector.
What impact did COVID-19 have on the long-term care industry (LTCi) early on? The Society of Actuaries (SOA) recently released a survey trying to answer that question by detailing COVID-19’s impact on LTCi mortality, voluntary lapse and morbidity experience. General findings from the survey were stated as follows:
Over the past few years, insurers, consumers and regulators have asked the question: who, and how, will consumers receive and pay for long-term care? The older, retired population will soon substantially outnumber the working population and the number of private insurers providing long-term care continues to dwindle. A report from the American Council of Life Insurers projects 70% of Americans turning age 65 or older will require long-term care. By 2060, the number of Americans turning age 65 or older will double and those turning age 85 or older will triple. As the population continues to age, the average cost of care continues to rise. Thus, the government faces a looming risk of unbearable expenses as more individuals rely on Medicaid for elder care. In light of this statistical reality, governments, insurers and long-term care (LTC) providers are trying to find cost-efficient ways to offer long-term care to consumers in need and, in turn, increase access to care.
An aging boomer population, limitations or workforce shortages in the health care or long-term services and supports formal care systems, and the ongoing pandemic are some of the reasons why more and more Americans have found themselves serving as unpaid caregivers for family members or friends.
Not only are more Americans taking on the role of unpaid caregiver, but they are doing so for adult recipients who may have increasingly complex medical or support needs. More than 60% of caregivers report in a 2020 AARP survey that their adult care recipient needs additional help due to long-term physical conditions, while about one-third cite memory problems (such as Alzheimer’s or dementia) as the reason. The on-going pandemic also continues to shape aging-in-place (i.e. at home) demand for services, including home health aides.
Navigating long-term care insurance (LTCi) can be complicated for people planning the type of care they might need, how long they might need it and how they are going to pay for it, according to retirement expert Glenn Ruffenach. In a recent Wall Street Journal Ask Encore column, he examines the importance of finding a knowledgeable, independent agent who “sells policies from multiple carriers and who specializes in long-term-care planning and insurance.”
Mr. Ruffenach recommends several tips to help find the right agent, including using educational and training programs dedicated to LTCi insurance to find agents and other financial professionals nationwide. (For example Certification for Long-Term Care has a locator on its website that identifies its graduates.) He also suggests searching online for local experts or asking others in professional services, such as accounting or tax law, for recommendations. Once you have identified several agents, it is important to talk to all of them to assess who is the best fit for you based on their experience and education as well as your own comfort level with them.
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.