In-Home Long-Term Health Care a Priority – Majority Have Not Yet Planned

According to a recent survey conducted by a major insurance company, the importance of prioritizing long-term health care planning has never been higher.

The annual Nationwide Retirement Institute Long-Term Care Survey indicates that 87% believe it is more important than ever to receive long-term care services at home. In addition, a whopping 85% said they felt having Long-Term Care Insurance is essential.  

The survey says the recent COVID-19 crisis raises concerns about the safety of long-term care facilities. A large majority of respondents (61%) say they would rather die than live in a nursing home.

Safety Concerns with LTC Facilities

While most Long-Term Care Insurance claims start with in-home care, according to an analysis of Long-Term Care Insurance claims completed by the American Association for Long-Term Care Insurance, almost half of those surveyed worry about the safety of nursing homes.  

Family caregivers providing long-term care for loved ones, usually a parent or in-law, worry about their ability to provide the care without the care recipient or themselves getting sick. Family caregivers have always faced stress and anxiety in their role since caregiving is both physically and emotionally draining. The virus crisis has put another element of concern into the equation.

The awareness of the importance of having a plan for the costs and burdens of aging has increased due, in part, to the impact of COVID-19. More people are now aware of how many people require long-term care services and the impact on family and finances. 

Awareness Increasing but Not Discussion

While most survey respondents (81%) said the virus crisis makes it more critical to have Long-Term Care Insurance, only 41% have had any discussion about it with family. Only 8% said they spoke with any professional about LTC Insurance. 

Experts say the best time to obtain long-term care coverage is when you are younger, as these policies are medically underwritten. The American Association for Long-Term Care Insurance (AALTCI) says most people today who purchase a policy are age 65 or younger. 

While greater awareness of the risk is a major reason younger people purchase a policy, the cost and underwriting are the other two reasons. Premiums are based, in part, on your age and health at the time you purchase coverage. 

Waiting Too Long Will Decrease Ability to Obtain LTC Coverage

The decline rate, the percentage of applicants who are declined coverage due to their health, increases with age. The AALTCI reports that 32.5% of those aged 65 to 69 get declined, with 44% declined aged 70 to 74. Over half (51.5%) of those aged 75 and older get declined. Plus, few companies offer new coverage for those older ages.  

People require long-term health care services due to health issues as well as accidents and the consequences of aging. Traditional health insurance policies, including Medicare and supplements, will only pay a limited amount of skilled long-term care in a facility. Most long-term health care is custodial - meaning help with daily living activities or supervision due to cognitive decline. 

The responsibility for most long-term care falls on a family's finances or on family members to provide the care, sometimes both. The cost of long-term health care is expensive and continues to get more costly. 

LTC Costs Increasing – Impact on Finances Substantial

The LTC NEWS Cost of Care Calculator can show you both the current and future cost of care where you live. Nursing homes continue to be the most costly type of care - although the least used. The national average, according to the LTC Cost of Care calculator, is $106,488 a year. In the year 2040, that cost will be nearly $200,000 a year. 

The cost of care varies dramatically depending on location, and the type of care required. In-home care is averaging over $53,000 a year nationally (based on a 44-hour week). The base assisted living cost now averages about $51,000 a year (although depending on the extent of care required, additional charges will apply).

"More of us realize today that long-term care is both a cash flow problem and a family problem. Preparing for long-term care not only protects income and assets but reduces the stress and anxiety otherwise placed on family members," said Matt McCann, a nationally recognized expert on long-term care planning. 

Several LTC Plans Available

Several types of policies are available, and experts suggest speaking with a trusted and qualified Long-Term Care Insurance specialist to help you navigate the many options. 

The most common types of plans include:

Traditional Long-Term Care Insurance - This is still the most popular and cost-effective way to plan. In 45 states, Partnership policies offer additional dollar-for-dollar asset protection. 

Asset-Based/Hybrid Long-Term Care Insurance - These are becoming increasingly popular as a person/couple can combine both life insurance or annuity with long-term care coverage. The policies come with a death benefit and are usually paid for with a single premium. Be careful as many of these products are not really long-term care plans or have exclusions or limitations limiting your ability to obtain benefits. However, there are several good plans to consider if you like the idea of a death benefit. 

Short-Term/Limited Duration Policies - These policies will pay for one or two years of care. While not available in every state, they provide some benefits for some people, especially those who may not be health eligible for other plans or too old to obtain new coverage. 

Be sure to seek the help of a specialist who works with all the major companies and who has substantial experience in this area. Find a specialist by clicking here.

Don't wait for a crisis to start planning. There is no question that our health and bodies change with time. Preparing your family and finances for the costs associated with long-term care will not only safeguard your assets but will give your family the time to be family and not caregivers.

LTC Insurance Claims

In 2020 over $11.6 Billion were paid in LTC Insurance benefits with much of those benefits for in-home care. If you or a loved one has a policy and need to get benefits just click here.