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Life Health > Long-Term Care Planning

Most Long-Term Care Insurance Claims Are for Home Care

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More than half of new long-term care insurance claims in 2016 were for people who received care in their homes, according to the American Association for Long-Term Care Insurance. That’s a 3% increase from 2012.

“Individuals continue to mistakenly think of long-term care insurance as nursing home insurance,” Jesse Slome, director of the AALTCI, said in a statement. “I sometimes refer to LTC insurance as nursing home avoidance insurance because often having this insurance protection in place allows the individual to be cared for in their own home.”

Less than a third of new claims started in a nursing home last year, and just 14% of new claims were from claimants in an assisted living facility, AALTCI found.

Furthermore, 56% of claims ended in the claimant’s home, according to the release.

“Most long-term care insurance claims begin and end in the home,” Slome said. “People want to be in their home with family and loved ones, and having some long-term care insurance in place can help pay for the cost of home care services.” 

Genworth’s 2016 Cost of Care survey found the national median cost for homemaker services to help with things like cooking, cleaning and running errands was $3,813 per month. A home health aide, which provides more extensive assistance but stops short of medical care, was $3,861 a month.

Older people who can’t receive care in their homes will pay even more. The cost of a private, one-bedroom room in an assisted living facility was $3,628 per month, Genworth found. The cost of a private room in a nursing home was more than double that at $7,698. A semi-private room cost $6,844 per month.

Furthermore, depending on where a claimant lives, the difference between home care and facility care could be tens of thousands of dollars. For example, in Alaska, the state median for home care with a home health aide was over $5,000, but a private room in a nursing home was nearly $25,000 per month. By comparison, the state average for nursing home care in California was less than $10,000 a month.

AALTCI’s 2017 Long-Term Care Insurance Price Index found premiums ranged from $2,050 and $3,790 per year for a 60-year-old couple. For single women aged 55, premiums ranged from $800 to $2,600 per year. Single men could expect to pay between $800 and $1,655 per year for an LTCI policy.

— Read Now You Need Even More Money for Health Care in Retirement: EBRI on ThinkAdvisor. 


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