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The bond market may be too chaotic for life insurers to have an easy time supporting stand-alone long-term care insurance (LTCI), but many consumers still love the idea of having LTCI coverage.

They also like the idea of buying chronic care benefits packaged together with life insurance.

About 32% of consumers surveyed said they are thinking about buying insurance that would cover chronic care, or long-term care, and 22% said they believe they already have such coverage.

Massachusetts Mutual Life Insurance Company has published new data on consumers’ hunger for mechanisms for paying for long-term care, in a summary of results from a survey of 1,250 adults ages 30 through 60. All of the participants had income from $50,000 to $150,000 per year.

The survey was conducted in November — before the attack of COVID-19 on nursing homes and assisted living facilities underscored the value of having the financial flexibility to adapt to changes in long-term care (LTC) needs and the LTC provider market.

Resources

  • A copy of the MassMutual chronic care survey is available here.
  • An article about other new consumer survey results is available here.

The survey team found that younger consumers were more interested in LTCI and chronic care coverage than older consumers were.

Here’s how the percentage of consumers who said they were interested in buying that kind of protection varied by age group:

  • 30 years old to 40 years old: 42%
  • 41 years old to 50 years old: 36%
  • 51 years old to 60 years old: 26%

The survey team also found that survey participants with income from $75,000 to $100,000 were more likely to be interested in buying coverage than higher income people, partly because 29% of the participants with more than $100,000 in household income said they already had some kind of chronic care or LTCI protection in place.

About 36% of the participants in the $75,000-$100,000 category said were considering buying LTCI or chronic care coverage, compared with about 33% of the higher-income consumers.

The Market Giant That’s Not in the Market

In the past, Medicaid has paid for nursing home benefits. Medicare paid only for a small amount of skilled nursing facility care for patients recovering from conditions or procedures requiring hospitalization.

In recent years, some Medicare Advantage plans have begun adding small amounts of homemaker support, and Medicare has further blurred the line between what it offers and what Medicaid offers, by letting Programs of All-Inclusive Care for the Elderly (PACE) offer long-term care services, along with medical services, for people living in the community who qualify for both Medicare benefits and for Medicaid nursing home benefits.

Critics blocked Medicare from offering LTC benefits when they overturned the Medicare Catastrophic Coverage Act of 1988. They also killed a voluntary LTCI program included in the Patient Protection and Affordable Care Act.

But insurers have shown more interest in participating in some kind of public-private hybrid “Medicare Part E” long-term care insurance program in recent years. MassMutual’s survey shows that many consumers already think Medicare offers chronic care benefits.

Only 20% of the consumers surveyed said they expect to use Medicaid to pay for “care for a chronic illness or physical disability after age 65 that lasts more than a few weeks.”

About 24% said they expect to use LTCI coverage, and about 16% expect to use a life insurance policy’s chronic care benefits.

Just 7% said they thought they’d use annuities to pay chronic care bills.

Far more — 34% — said they expect to use Medicare benefits to pay for chronic care.

For the survey participants, the only bigger anticipated source of chronic care payments was retirement savings: 39% said they expected to use retirement savings to pay for LTC services.

— Read MassMutual Finds Lingering Demand for LTCIon ThinkAdvisor.

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