COVID-19 and Long-Term Care: LTCI Insider

The situation is devastating.

The destructive sweep of the COVID-19 virus which is disrupting our lifestyle and daily lives is significantly impacting those in the throes of a long-term care event. They are especially vulnerable. But that is just the short term.

What are the longer term issues when your clients need long-term care. If they fortunately still have their heath and can only contemplate having a major health change down the road, will they be impacted? The answer is unequivocally yes!

(Related: Hospice Care and Medicare: LTCI Insider)

I just completed a white paper that addresses the impact of COVID-19 on the long-term care continuum. To obtain this information, I surveyed numerous top people in the long-term care industry — people who have insider information. This article is an overview of what they shared.

The Impact on Nursing Homes

The impact on the nursing home industry has been catastrophic!

With occupancy rates plummeting, this industry is in deep financial trouble.

The American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) conducted a survey of 953 nursing home providers across the U.S. on their financial and staffing challenges.

• Two-thirds of nursing homes operators say they won’t make it another year given current operating pace due to increased COVID-19 costs.
• 90% of nursing homes are currently operating at a loss or less than 3% profit margin.
• 65% are currently operating at a loss.

At the same time, revenues are taking a beating. Nursing homes are suffering from the loss of lucrative post-acute rehabilitation and other care for patients recovering from surgery, strokes and the like. Potential long-term care residents are reluctant to move in.

Those results are consistent with one expert in nursing home financing who privately predicts that COVID-19 will drive about half of all current operators out of business.

The Impact on Assisted Living Facilities

Occupancy rates for assisted living facilities have significantly declined due to COVID.

Here are the key findings from a survey by the National Center For Assisted Living:

• Half of assisted living facilities are operating at a loss.
• 66% of assisted living providers said they won’t be able to sustain operations another year at the current pace of increased costs and revenue loss.
• These facilities are facing increased costs in personal protection expenses (PPE) supplies, staff pay and cleaning supplies.
• Assisted living facilities — unlike nursing homes — have not received any direct federal funding.

The Impact on Home Health Care

Americans want to stay at home and age in place. Even before COVID 19, claims data shows that most care is already received at home. Expect the trend to age in place to continue to accelerate as a result of the COVID-19 impact on nursing homes and assisted living facilities.

A survey of family caregivers showed these results:

• 65% said COVID-19 has completely changed their opinions about the best way to care for older adults.
• 68% said they don’t agree that quality care can be provided in assisted living and other congregate care settings.
• 78% are concerned their loved one will contract COVID-19 in a facility.
• Looking to a time after the pandemic, two-thirds of family caregiver respondents said they plan to use in-home care rather than facility-based care.

The Impact on the Carriers

With the pandemic crisis lasting longer than most of us had anticipated, the impact on the carriers has definitely increased.

The Hybrid Carriers: This is the area where I have seen the most change. Almost every week, there has been an announcement about an upcoming change at a company that combines long-term care benefits with life insurance or annuities. Virtually all carriers have increased their premium rates, and most have limited the application age to 70. One company requires single-pay for all applicants over age 70.

The Traditional Carriers: Initially, from an agent’s perspective for this segment of the industry, the changes were surprisingly minimal. For several months, one carrier limited the age of applicants to under 65, but that restriction has now been lifted.

But now we are seeing much stricter underwriting requirements.

• Applications are postponed if the insured or a member of their household has traveled outside the country within the past 30 days.
• If the insured or somebody in their household has come into contact with somebody who tested positive, coverage could be postponed for 30 to 90 days.
• If an applicant currently has COVID-19, he or she is postponed for coverage ranging from 30 to 90 days depending on the carrier.
• If the applicant is hospitalized, the coverage delay could be up to a year.
• If the applicant is quarantined with no diagnosis or symptoms, the delay could range from as soon as the applicant is released to 90 days.

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Margie Barrie, an agent with ACSIA, has been writing the LTC Insider column since 2000.