The total value of long term care insurance benefit payments for 2006 was $3.3 billion, according to a new study.
Although payout data for prior years was not collected, the 2006 disbursements were probably the highest amount ever for a one-year period, estimates Jesse Slome, executive director of the American Association for Long Term Care Insurance, Westlake Village, Calif., which conducted the study.
Around 30,000 claims were filed in the period, says Slome. The average duration between the time the policy was bought and a claim filed was 7.5 yrs, the study found.
Around 8 million Americans now own LTC insurance policies bought either individually or through their employer, Slome notes.
The study of data from 8 of the nation’s largest LTC insurers found about 34% of the insurance benefit payments they made in 2006 were allocated for home care.
In addition, close to 30% of LTC benefits paid went toward assisted-living costs. Around 36% was allocated for nursing-home care.
“So many of these policies were bought 7 to 10 years ago, when home-care benefits were not as common; or where they were bought, they paid only 50% of the allowed nursing-home benefits,” Slome said.
The fact that about a third of benefits were allocated to nursing homes and the remainder to home care or assisted living “is dramatic indication people want and use these policies to receive care at home, even if they have terribly debilitating conditions like Alzheimer’s,” he said. “One of the most significant benefits of owning LTC coverage is the fact that it can pay for care received in your own home, which is what people clearly prefer,” Slome explains.
The increasing amount of benefits paid out proves LTC protection is important, Slome says.
The largest single claim reported by an insurer was over $875,000, he noted.
“Some of these individuals are still receiving long term care, so the total value of the protection they’ve received will continue to grow.”