Insurers may be scared of chronic care benefits, but survey
results suggest that the demand is still there.
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
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.
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