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Published: Apr 27th, 2018

Long-Term Care Insurance Delivers Care at Home

Long-Term Care Insurance Delivers Care at Home
Article Updated:October 31st, 2019

If you discuss long-term care with friends and family, you will not hear the words ‘I want to go to a nursing home when I get old.’ It is fair to suggest the clear majority of people would rather stay in their own home and would want to do anything to keep out of a nursing home if possible.

However, when the topic of Long-Term Care Insurance gets discussed, either in articles or at the dinner table, many people think it is nursing home insurance. Nobody wants nursing home insurance.

“People mistakenly associate Long-Term Care Insurance exclusively with skilled nursing home care,” shares Jesse Slome, the director of the American Association of Long-Term Care Insurance (AALTCI – The AALTCI is a national consumer education and advocacy group. 

Long-Term Care Insurance Pays for Care at Home - Not Just a Nursing Home

The AALTCI releases claimant data every year. Most Long-Term Care Insurance claims begin in the home according to their analysis of claims.

The association says 52.1 percent of all new claims in 2017 began in the home setting. 

“Nearly one in five claims (19.7 percent) started in an assisted living facility and only 28.2 percent commenced in a skilled nursing home,” Slome said.  The group analyzed data from six leading Long-Term Care Insurance companies.

American Families are Receiving Huge Benefits from LTC Insurance

The National Association of Insurance Commissioners (NAIC) LTC Experience Report (May 2016) says over 100 insurance companies are paying over $10 Billion per year in Long-Term Care Insurance claims. Although a new study completed by the AALTCI shows this has increased.

The NAIC report says that from 1994 to 2014, slightly less than $100 Billion in claims have been paid to American families. The NAIC study also shows those with Long-Term Care Insurance receive more paid care at home than those who don't.

American Families Benefiting from Long-Term Care Insurance

The AALTCI says the major insurance companies in the industry paid over $11 Billion in claim benefits in 2019, helping American families address the costs and burdens that come from extended health care.  

"Both the dollars paid and the number of individuals receiving benefits continue to grow as more Americans benefit from having this important protection," Slome said.

Women Receive Care More Than Men

Women accounted for 64% of newly opened claims in 2018. Slome says planning for long-term care is especially important for women since they are more likely to require care.

Long-Term Care Insurance pays benefits in all settings. The study shows 23 percent of new claims that started in a nursing home while 51.5 percent of claims started in their own home. Assisted Living represented 24.5 percent of new claims.

"Individuals want to remain in their own home when care is needed, and Long-Term Care Insurance enables them to get the care they need in the setting they prefer," Slome explained.

Slome, quoted in McKnight's Long-Term Care News, told the website that the first policies only paid for skilled care in a nursing home. He explained the focus of the insurance companies was to pay for nursing homes. This is not the case today. 

LTC Insurance  Pays for Care In Many Settings

Most plans today will pay for any level of care either at home, adult daycare, assisted living, memory care as well as nursing home care. This gives the consumer, and their family, choice of quality care in the setting they desire.

Planning for longevity has become a key part of retirement planning. If you are saving money in your retirement accounts (401(k) IRA SEP 403(b)), protecting that money from the high costs of extended healthcare would seem prudent.

Many experts say consumers want choice. They want to decide how they will be taken care of and in what setting. They want quality care choices without having to either drain assets to pay for them or burden their spouse or adult children. Long-Term Care Insurance can help you make those choices prior to retirement.