South Carolina Faces Surge in Senior Population - More People Using Long-Term Care Insurance Benefits

South Carolina, long a haven for beautiful beaches and historic charm, is experiencing a demographic shift with significant implications. The state's population is aging rapidly, driven by a combination of factors: a growing number of existing residents reaching retirement age and an influx of retirees seeking a warm climate and slower pace of life. 

According to the U.S. Census Bureau, the proportion of South Carolina residents over 60 is projected to reach 27% by 2030, a staggering increase from 16.2% in 2015. This trend aligns with national projections, but South Carolina is aging faster than the U.S. average.

The 'silver tsunami' of seniors is not just a demographic shift but a tidal wave that is overwhelming the health system. The surge in demand for long-term care services, from in-home care and adult day care centers to assisted living facilities, nursing homes, and memory care units, is unprecedented. 

Aging Adults Facing Challenges

A 2016 report by the ACL Administration for Community Living reveals that 12.3% of South Carolinians aged 50 and older already experience functional limitations, underscoring the urgent need for various levels of care.

Maya Pack, Director of the South Carolina Institute of Medicine and Public Health (IMPH), says older adults in South Carolina face many challenges. 

Almost four out of every 10 South Carolinians aged 65 or older live alone. Just about the same percentage have a disability.

While 37% of South Carolinians aged 65 and older live alone, which is similar to the national average, 35% live with some disability, which is above the national average. 

Nationally, the U.S. Department of Health and Human Services says a little over half of those who reach age 65 will need some long-term care service in their lifetime. 

The South Carolina Department of Aging is trying to prepare for the increase in the number of seniors living in the state.

Within the next 25 years, the number of South Carolinians age 60 and over is expected to double, from our current 637,673 to more than 1,290,000.

LTC Insurance Benefits Paying Record Amount of Benefits

Regrettably, the surge in demand for long-term care services is accompanied by a growing financial crisis. The cost of these services has become an insurmountable burden for many families. However, a growing number of South Carolinians are using benefits from their Long-Term Care Insurance policies to help pay for the costs of long-term care services, including in-home care.

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

In the most recent AHIP Long-Term Care Insurance Coverage report (2021), $186,330,000 in benefits were paid from traditional Long-Term Care Insurance policies. This number does not reflect benefits paid from hybrid and other types of policies that pay benefits similar to LTC Insurance. 

These numbers have likely surged, with 2023 reports showing that top insurance companies paid more than $14.1 billion in Long-Term Care Insurance benefits across the country in just one year. This highlights the growing importance of LTC Insurance in the U.S. health care system, South Carolina included.

Historically, $2,098,169,000 in Long-Term Care Insurance benefits have been paid to policyholders of traditional policies in South Carolina since this type of insurance was developed. Without LTC Insurance, South Carolinians would have been forced to pay for long-term care services out of pocket or have family members provide care. 

Traditional health insurance, including Medicare, covers only short-term skilled care, leaving Long-Term Care Insurance and Medicaid as options beyond family resources. Medicaid will only pay for long-term care for those with limited income and assets.

Long-Term Care Costs Exploding in South Carolina

The LTC NEWS Cost of Care Calculator provides insights into both the present and projected expenses for various types of long-term care services across every state and the District of Columbia, focusing on metropolitan areas within each state. Although the median average cost of long-term care in South Carolina currently falls below the national average, these costs are escalating rapidly due to increased demand for care, rising labor expenses, and other inflationary pressures.

• Long-Term Care Costs in South Carolina

Most long-term care is delivered at an individual's home, the home of a family member, or in assisted living. The average statewide median cost of in-home care, based on a 44-hour week, is now $4,300 a month ($51,174 annually.) However, with inflationary pressure, in 2044, that cost is expected to be $7,327 per month or $87,188 a year. In metro areas, that cost will be much higher. 

Base assisted living costs average $3,688 statewide. However, surcharges can add $1800 or more per month to the base cost. In twenty years, that base cost is expected to average $6,284 a month before surcharges. 

Nursing home costs are very high, averaging $7,727 for a private room today and $13,164 a month in twenty years. 

However, in metro areas within South Carolina, higher labor costs and other economic pressures increase the cost of long-term care services well above the state average. 

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

South Carolina's Long-Term Care Partnership: A Shield for Family Assets

As South Carolina grapples with its rapidly aging population and the rising costs of long-term care, the state offers a valuable program for residents looking to safeguard their assets: the Long-Term Care Insurance Partnership (LTCIP). This program goes beyond simply providing long-term care benefits – it offers policyholders a unique asset protection advantage.

Here's how the LTCIP empowers residents in South Carolina

• Dollar-for-Dollar Asset Protection:  The LTCIP offers a critical additional benefit – dollar-for-dollar asset disregard. This means that for every dollar you utilize from your LTC Insurance benefits, an equal dollar amount of your assets won't be counted when determining your eligibility for Medicaid. This can be a game-changer, particularly for individuals with more limited assets who may eventually require Medicaid assistance to cover long-term care costs exceeding their LTC Insurance benefits.
• Substantial Protection, Even with Smaller Policies:  The dollar-for-dollar asset protection feature makes the LTCIP valuable even for individuals considering smaller, more affordable Long-Term Care Insurance policies. Let's say you purchase a policy with a $50,000 benefit pool. If you exhaust these benefits, the LTCIP would disregard $50,000 of your assets during a Medicaid eligibility evaluation. This protection can help ensure you preserve a significant portion of your life savings to pass on to loved ones or to cover other unexpected expenses.

This is not to say that those with larger estates would not benefit. For example, if your partnership policy paid $700,000 in benefits, you would have $700,000 of assets disregarded, not counting the $700,000 that was saved because the policy paid for your care. 

• Peace of Mind for Seniors and Families:  A partnership LTC policy offers a two-pronged benefit. It provides financial security by helping cover long-term care costs and offers peace of mind by safeguarding assets that might otherwise be depleted to qualify for Medicaid. This empowers seniors to plan for the future with greater confidence, knowing their hard-earned savings won't be entirely consumed by long-term care expenses.

It's important to note that the LTCIP has specific guidelines and limitations. Consulting with a qualified LTC Insurance specialist is crucial to determine if the program fits your needs and financial situation. 

There are available LTC Insurance policies that offer unlimited benefits that may be more appropriate for those with substantial assets to protect. There are hybrid policies that offer death benefits as well. 

Is LTC Insurance a Good Choice for South Carolina Residents?

For South Carolina residents looking to protect their retirement income and assets to maintain a lifestyle they are accustomed to and preserve a legacy for their loved ones, Long-Term Care Insurance emerges as an affordable solution.

• Long-Term Care Insurance Cost: Factors, Considerations and Price Ranges

However, LTC Insurance might not be appropriate for individuals with limited resources, who could quickly become eligible for Medicaid's long-term care benefits in South Carolina.

LTC Insurance provides tax-free benefits to support a spectrum of quality care services. Policyholders can adjust their policy benefits to align with their needs and budget. Premium costs are based on variables such as age, health condition, gender, and marital status. Working with an experienced, independent LTC insurance specialist can help you customize a plan and pinpoint the most cost-effective policies among the various providers.

The state of South Carolina offers a variety of LTC Insurance options, including traditional policies, which may be partnership-certified, hybrid policies with a death benefit, and short-term cash indemnity policies.

Applying for Long-Term Care Insurance

Coverage is generally secured in one's 40s and 50s when premiums are lower and health is better. However, depending on individual health circumstances, affordable solutions may still be found for those in their 60s and later.

How To Apply For Long-Term Care Insurance

Finding Quality Care in South Carolina

Discover the LTC NEWS Caregiver Directory, your go-to resource for finding quality long-term care options in South Carolina. This extensive directory features detailed information on over 80,000 providers, including home care, adult day care centers, assisted living, memory care, and nursing homes. With the convenience of location-based searching, this free tool simplifies the process of securing quality care for your loved one.

Should your family member have Long-Term Care Insurance, you'll find more choices available. Many providers will inquire about Long-Term Care Insurance early on, opening the door to quality care options in your desired setting.

Preparing Your Family for the Inevitable Aging Process

Every South Carolina family will face the realities of aging, making it crucial to plan ahead to protect your finances and lighten the load on your loved ones. Putting off conversations about long-term care or overlooking affordable Long-Term Care Insurance options can lead to significant financial and emotional strain.

By integrating Long-Term Care Insurance into your retirement plan, you'll gain peace of mind for the future. This strategic move safeguards your savings, including your 401k and other assets, allowing your family to focus on providing love and support rather than bearing the full weight of caregiving responsibilities.

LTC Insurance works for the people of South Carolina, and it can also work for you.