June 15, 2011

A Long-Term Care Primer: The Need and the LTCI Option

 

The baby boomer generation – defined by the Census Bureau as those born between 1946 and 1964 – is going to have a major impact on many aspects of the economy, but the most important will be health care. The oldest boomers are turning 65 this year. This cohort will be demanding better care as they age and long term care is one area of the health care business that is beginning to address this situation.

Years ago LTC policies only provided nursing home care, which meant a total change in lifestyle for the patient and for the family. The patient needed to be moved to a facility (in those days, regulatory agencies were not as proficient as they are now) and it was up to the family to perform "due diligence" to make sure the nursing home adhered to accepted standards of care. We've all heard the stories of the poor treatment and shabby conditions patients sometimes experienced in these facilities. Fortunately, advances in the medical and insurance industries have provided us with some innovative programs that represent better alternatives to the traditional – and problematic – nursing home scenario.

Today's LTC policies provide coverage for assisted living facilities, home health care, adult day care, alternate care and respite care to those looking after infirm individuals. People want to be able to chose where they receive their care and who will be providing that care. The LTC industry is stepping up to offer boomers – who are expected to live longer, healthier lives – the choices they want.

A very informative booklet— "Long Term Care Insurance or Medicaid: Who Will Pay for Baby Boomers' Long Term Care?" that can be found on the American Council of Life Insurers website can be a good place to learn more about LTC insurance for yourself and your clients. While the report was published several years ago, its content is still helpful, not the least of which is understanding how the need for long-term care will grow. The study says that 55% of Americans aged 85 and older “already require some form of  long-term care and about 19% of all seniors suffer some degree of chronic impairment.  By 2050, it is estimated that up to 5.4 million seniors will need the services of a nursing home—the most costly form of long-term care—and another 2.4 million will require home health care.”

As with any insurance product, the key thing to remember is the fiscal soundness of the company from which you purchase the policy. You want them to be in business when any claims come due. Also, in an attempt to distinguish their products in a crowded marketplace, insurance companies have increasingly conjured up lengthy menus of discounts, special features, expanded benefits and riders. The language of LTC policies is often complex and not standardized so try to rely on trustworthy and knowledgeable advice to get the coverage that’s appropriate to your needs.

Advances in medical care now allow us to be basically “rebuilt,” extending what the specialists call health expectancy. That means living longer and free of disability, the very definition of “quality of life." Fortunately, the insurance market is now adapting to this shifting landscape with innovative options that provide needed flexibility for families.

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