In 2013, insurers handed out nearly $7.5 billion in long-term care benefits, a 13% increase over 2012, according to the American Association for Long Term Care Insurance. Individuals filing claims increased as well, rising more than 3% to 273,000 claimants.
More than 7 million people own a long-term care policy, according to AALTCI, either on their own or through an employer or membership organization.
“The increase in claimants and benefits paid was expected,” Jesse Slome, director of AALTCI, said in a statement. “As policyholders age, they start to need care and qualify for benefits. Claim payments will continue to increase as more people purchase long-term care insurance policies and older policyholders reach their 70s and 80s.”
A report released by AALTCI in August estimated insurers will pay $15 billion by 2023, and $34 billion by 2033, when today’s 60-year-olds reach their 80s.
Over half of new claims paid for in-home care, and over 18% went to assisted living community costs. “Today a long-term care insurance policy is really nursing home avoidance protection,” Slome said.
Genworth’s 2013 Cost of Care study found that the national median for a semi-private room in a nursing home cost $207 a day, or $75,555 annually. A private room cost $230 per day or $83,950 per year.
However, the cost by state varies wildly. Genworth found the average cost for a private room in Alaska, the most expensive state, cost patients $255,891 per year. In Missouri, the cheapest state, patients were paying only $58,035 per year for a private room.
Check out Effect of Gender-Based LTCI Prices Seen in New Index on ThinkAdvisor.