Illinois Battles Soaring Long-Term Care Costs - LTC Insurance Delivers Millions in Aid for Quality Access

As the nation and the world experience a significant aging problem, Illinoisans are not exempt. A silver tsunami is hitting the country. Illinois is seeing this rising tide of seniors, reshaping the state and the impact aging has on long-term care.

Can you imagine a future where your grandparents are the fastest-growing demographic? That future is now. In Illinois, for example, the state's population is aging rapidly, presenting both challenges and opportunities for long-term care. While Illinois isn't alone in this trend, understanding the specific situation in the Land of Lincoln is crucial for navigating the coming wave.

According to the U.S. Census Bureau, Illinois was home to over 12.7 million people in 2021, with a staggering 2.1 million residents aged 60 and over. That's roughly 21% of the population, a figure projected to climb to 22.3% by 2030, according to the Administration for Community Living. 

This "silver tsunami" isn't just a national trend; it's washing over Illinois with particular force. Luckily, Illinois ranks fourth with the most Long-Term Care Insurance in force in the United States, behind only California, Texas, and New York, according to American Association for Long-Term Care Insurance data.

LTC Insurance Works in Illinois

The latest AHIP Long-Term Care Insurance Coverage report (2021) reveals that Illinois families benefited from $619,424,000 in payouts from traditional Long-Term Care Insurance policies. This substantial financial assistance enabled families across Illinois to access quality long-term care services, including in-home care. It's worth mentioning that this amount does not include payouts from hybrid or other varieties of long-term care policies.

Today, these figures are likely much higher, with reports for 2023 indicating that leading insurance companies disbursed over $14.1 billion in Long-Term Care Insurance benefits nationwide. This underscores the increasingly crucial role that LTC Insurance plays in the U.S. health services landscape, including in Illinois.

Since the Long-Term Care Insurance industry began, Illinoisians have benefited from a total of $6,728,445,000 in LTC Insurance claims paid, which have funded all types of long-term care services (home care, adult day care, assisted living, memory care, and nursing home services.)

Families in Illinois directly benefit from the protections offered by LTC Insurance, experiencing firsthand how it safeguards their income and assets. This type of insurance ensures they can access the quality care they prefer, significantly easing the financial, physical, and emotional stress that long-term care can place on families nationwide, including in Illinois.

Illinoisans with LTC Insurance find a sense of security and peace of mind, knowing they are well-prepared to manage the challenges associated with aging and long-term care needs. 

Illinois Faces Surge in Long-Term Care Costs

Considering traditional health insurance and Medicare only pay for short-term skilled care, individuals bear a significant financial responsibility for long-term care services. Without Long-Term Care Insurance, which covers care in both home and facility settings, Illinois residents would encounter severe financial challenges. This situation also places a heavy stress and emotional load on their loved ones, who must either take on caregiving roles or navigate the complexities of arranging professional care services.

• What is Long-Term Care Insurance? What Does It Cover?

The LTC NEWS Cost of Care Calculator for Illinois indicates how these costs grow yearly. The average cost of in-home care in the state (based on a 44-hour week) is $4,916 monthly. Base assisted living costs average $4,517 per month, but surcharges will increase the cost by as much as $2000 on top of the base cost.

Nursing home costs are the most expensive and in Illinois they average $7,677 per month for a private room, but it is much higher in some areas of the state.

Compare these median statewide average home care costs to these metro areas in Illinois:

The cost of long-term care services increases yearly. For example, in 2044, the LTC NEWS Cost of Care Calculator suggests that the average median statewide cost of in-home care will be $8,375 monthly. The projected increase in the annual cost of long-term home care in Illinois between 2023 and 2044 is approximately 70.36% or 3.35% per year. 

Illinois Long-Term Care Insurance Partnership Program

As Illinois grapples with an aging population and the rising cost of long-term care, the Illinois Long-Term Care Insurance Partnership program stands as a beacon of hope for families with qualified LTC Insurance policies.

The program offers a two-pronged approach to long-term care planning.

• Qualified LTC Insurance:  Residents can purchase qualified Long-Term Care Insurance policies that meet specific federal/state-mandated standards. These policies provide financial protection if a policyholder exhausts their benefits. Hybrid or short-term cash indemnity policies are not partnership-qualified. 
• Asset Protection:  The program's real strength lies in its asset protection provisions. When a policyholder with a qualified LTC policy exhausts their benefits, the Illinois Partnership program steps in. It allows them to qualify for Medicaid, the government-funded program, with a crucial difference.

Preserving What Matters

Unlike the traditional Medicaid program, which can require significant asset "spend down" before coverage kicks in, the Partnership program offers an "asset disregard." This means a certain amount of a policyholder's assets are sheltered or protected from being counted towards Medicaid eligibility based on the number of benefits paid by their policy. This allows families to access Medicaid benefits without losing most of their savings. The dollar-for-dollar asset protection offers additional asset protection on top of a policy's benefits.

Is LTC Insurance Right for Illinois Residents? 

Illinois residents with assets and income they wish to protect should consider adding a Long-Term Care (LTC) policy to their retirement strategy. An LTC policy might not be the best fit for those with limited assets and income, as they may qualify for Medicaid's long-term care benefits in Illinois.

LTC Insurance offers tax-free benefits that can be used to cover a range of quality care services. The policyholder can select the benefits of their policy to fit their needs and budget. Premiums vary based on factors such as age, health, gender, and marital status. Consulting with a qualified LTC Insurance specialist can simplify the process of designing a personalized plan and finding the most cost-effective options among the available insurers. 

Illinois provides several LTC Insurance options, including traditional policies (including partnership-certified policies,) hybrid policies with a death benefit, and short-term cash indemnity policies.

• How To Apply For Long-Term Care Insurance

Coverage is typically purchased in the 40s and 50s when premiums are most affordable. Yet, depending on health status, affordable options may still be available in the 60s and later.

Finding Quality Care in Illinois

The LTC NEWS Caregiver Directory is a comprehensive directory that provides detailed information and options, helping individuals and families make informed decisions about long-term care providers.

It has over 80,000 providers, including home care, adult day care centers, assisted living, memory care, and nursing homes that you can search by location. This free directory helps you find quality long-term care services for your loved one. 

If your loved one owns an LTC policy, you will have access to choices that may otherwise be unavailable, as one of the first questions most providers will ask is if your loved one has Long-Term Care Insurance. 

Preparing Your Family for the Inevitable Aging Process

The reality of aging awaits every Illinois family, underscoring the necessity of proactive preparation to safeguard your finances and ease the burden on your family.

Delaying discussions on long-term care or neglecting to explore cost-effective Long-Term Care Insurance options can have repercussions that extend beyond financial loss.

Incorporating Long-Term Care Insurance into your retirement strategy offers peace of mind for the future. It protects your retirement nest egg, like your 401k and other assets, and ensures that your family can provide love and support without the sole responsibility of caregiving.