Tag Archives: National Association Of Insurance Commissioners

Most Long-Term Care Claimants Are Younger Than You Think

Most Long-Term Care Claimants Are Younger Than You Think

UnumProvident Corp.’s “Landscape of Long-Term Care” profile of its claims activity revealed that almost 58 percent of group long-term care claimants are younger than 65. It also showed that the top five claims causes are cancer, stroke, neurological disease, dementia and multiple sclerosis.

The insurer noted that its group policies cover about 550,000 employees, and that approximately 200,000 individual long-term care policies are in force.

Additional data uncovered in its analysis of group long-term care claims included:

·   More than 66 percent of all claimants under 65 received care at home, while 17 percent received nursing home care. The National Association of Insurance Commissioners estimates the average cost of nursing home care at approximately $70,000 per year.

·   A typical claim for UnumProvident policyholders under 65 lasts a year or longer.

·   The average age of under-65 claimants is 53, with more than 15 percent younger than 45.

The company also indicated that the conditions affecting these under-65 claimants could require months if not years of treatment and care. In addition, many of these conditions worsen, as the claimants age. Considering that more young people are suffering from conditions like obesity and diabetes, the expectation is that incidence rates will continue to rise for this age group.

The report also referenced U.S. Senate Special Committee on Aging estimates that approximately 10 million people need long-term care today. This figure was compared to a January 2006 Wall Street Journal/Harris poll that found just 9 percent of those surveyed had purchased long-term care insurance. The researchers concluded that the low number of long-term care insurance purchasers is indicative of the lack of education for this coverage and unawareness of the financial risk assumed without carrying coverage.

The most important result of this study, however, was to shatter the myth that long-term care means end-of-life care. The claims analysis shows that both group and individual long-term care insurance is frequently used at much younger ages, a fact that should motivate more employers to offer this important benefit. It should also serve to remind individuals to talk with their insurance agent Brian Gruss 509-927-9200 about protecting themselves from the financial risks associated with long-term care.

Home Care Equals One-Third of All Long-Term Care Claims Paid in 2006

Home Care Equals One-Third of All Long-Term Care Claims Paid in 2006

A recent American Association for Long-Term Care Insurance study revealed that total long-term care insurance claims rose to $3.3 billion for 2006.1 This figure represents the highest amount of benefit payments to Americans for a one-year period ever.

Of the total, 34 percent of the insurance benefit payments made by eight of the nation’s largest insurers covered home care expenses. Additionally, 30 percent of benefits paid were for assisted living costs and the remainder, 36 percent, was allocated toward nursing home care. The largest single claim paid to date was more than $875,000. In fact, the largest claims paid by leading insurers ranged from well over $350,000 to one approaching $900,000.

The data also revealed that approximately eight million Americans now own long-term care insurance obtained individually or through their employer. The researchers concluded that the increasing amount of benefits paid to policyholders is proof of the growing need for long-term care insurance.

To encourage more consumers to buy long-term care insurance, The National Association of Insurance Commissioners has developed the following consumer guidelines to help you select the right policy:

·   The policy should cover at least one year of nursing home or home health care, including intermediate and custodial care. Nursing home or home health care benefits should not be limited primarily to skilled care.

·   The policy should also provide coverage for Alzheimer’s disease if the policyholder develops it after purchasing the policy.

·   Inflation protection is critically important. The policy should offer a choice between:

o   Automatically increasing the initial benefit level on an annual basis.

o   A guaranteed right to increase benefit levels periodically without providing evidence of insurability.

·   Your insurer should offer you a coverage summary that describes the policy’s benefits, limitations, and exclusions, and also allows you to compare it with others. They should also provide a long-term care insurance shopper’s guide that helps you decide whether long-term care insurance is appropriate for you.

·   There should be a guarantee that the policy cannot be canceled, non-renewed, or otherwise terminated because you get older or suffer deterioration in physical or mental health.

·   The insurer should permit you to return the policy within 30 days of purchasing to receive a full premium refund.

·   No requirements should exist that policyholders:

o   First be hospitalized in order to receive nursing home benefits or home health care benefits

o   First receive skilled nursing home care before receiving intermediate or custodial nursing home care

o   First receive nursing home care before receiving benefits for home health care

1 2007 LTCi Sourcebook published by the American Association for Long-Term Care Insurance

Most Boomers Have Poor Understanding of Long-Term Care Insurance

Most Boomers Have Poor Understanding of Long-Term Care Insurance

The generation that prided itself on being cutting edge when it came to change seems to have fallen behind when it comes to understanding long-term care. According to a survey from America’s Health Insurance Plans (AHIP), many Baby Boomers not only have mistaken ideas about who pays for long-term care services, but they also have not thought about protecting themselves with long-term care insurance.

The survey, conducted for AHIP by the marketing firm StrategyOne, uncovered the following data:

·   Most Baby Boomers have not planned for long-term care expenses. Only one in four of those polled who were nearing age 60 said they were “very familiar” with long-term care insurance, and 41% said they had not had any discussions about long-term care in the past twelve months.

·   While few Baby Boomers have coverage for long-term care expenses many mistakenly think that they do. In a separate survey from AARP, 29% of respondents age 45-plus said they had purchased long-term care insurance. In contrast, the National Association of Insurance Commissioners reported in 2005 that just 5.2 million Americans had long-term care insurance. Even if all of those covered were Boomers, this would mean that only 6.6% of the Boomer population of 78,000,000 is covered. However, since many of these policies protect individuals from previous generations, the percentage of covered Boomers must be even smaller. In addition, the Index of Long-Term Care Uninsured estimates that approximately 95% of those between the ages of 45 and 64 are uninsured for long-term care, a figure in stark comparison with Baby Boomers’ own characterization of their coverage.

·   The majority of Baby Boomers think Medicare or “other health insurance” will pay for long-term care. More than half (54%) of Baby Boomers believe Medicare pays for long-term care services, and 44% believe “other health insurance” will pay. Yet, generally, neither Medicare nor other health insurance offers coverage for long-term care. Medicaid may cover long-term care services, but only after requiring individuals to spend down nearly all of their assets to qualify for assistance.