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Study Examines Long Term Care Insurance Claims

Armen Hareyan's picture

Some 180,000 individuals received benefits from their long term care insurance protection according to a report issued by the American Association for Long Term care Insurance, the industry trade group.

"This is the first generation of Americans who are living into their eighties, nineties or even longer," states Jesse Slome, the organization's executive director. "It is also the first generation for whom long term care insurance has really been available to pay for needed and costly care."

The report examined claims for individuals who purchased coverage on an individual basis as compared to those who purchased through their employer. "An increasing number of large and small employers are offering employees long term care insurance," Slome notes. Most employer-offered plans are voluntary with the employee benefiting from a group-purchasing discount.

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The long term care insurance industry paid out some $8.5 billion in benefits last year according to the Association report. Most claims paid to those who purchased individual policies were paid to womren. "For those purchasing individual policies, some 65 percent of claims were paid to women," Slome says. "Women were 55 percent of the claimants for employer-sponsored plans."

The overwhelming majority of benefit payments paid for care outside of a nursing home. "Long term care insurance is unfortunately associated with nursing home coverage," Slome explains. "The fact is that most claims benefits are paid for care in the policyholder's home or some other facility such as an assisted living community." For individual policies, 42 percent of benefits payments went for home care, 27.5 percent for assisted living and 30.5 percent for skilled nursing home care. For employer-sponsored plans, some 53 percent of benefits went for home care.

The report notes that most long term care insurance claims begin for individuals who are age 80 or older. "Some 61 percent of individual claims start after a policyholder reaches age 80," Slome notes. "But, claims do occur for those in their 50s and 60s as well, often as a result of accidents or illness that strike at this age group." Some 1.5 percent of individual claimants were in their 50s and seven percent were in their 60s.

The American Association for Long Term Care Insurance provides the nation's online leading Consumer Information Center where long term care statistics can be readily found. For additional information, visit their website at aaltci.org .

Written by Jesse Slome from the American Association for Long Term Care.