{"id":2033,"date":"2023-11-22T12:48:14","date_gmt":"2023-11-22T12:48:14","guid":{"rendered":"https:\/\/healthynewsusa.com\/?p=2033"},"modified":"2023-11-22T12:48:48","modified_gmt":"2023-11-22T12:48:48","slug":"why-long-term-care-insurance-falls-short-for-so-many","status":"publish","type":"post","link":"https:\/\/healthynewsusa.com\/?p=2033","title":{"rendered":"Why Long-Term Care Insurance Falls Short for So Many\u00a0"},"content":{"rendered":"
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For 35 years, Angela Jemmott and her five brothers paid premiums on a long-term care insurance policy for their 91-year-old mother. But the policy does not cover home health aides whose assistance allows her to stay in her Sacramento, California, bungalow, near the friends and neighbors she loves. Her family pays $4,000 a month for that.\u00a0<\/p>\n

\u201cWe want her to stay in her house,\u201d Jemmott said. \u201cThat\u2019s what\u2019s probably keeping her alive, because she\u2019s in her element, not in a strange place.\u201d\u00a0<\/p>\n

The private insurance market has proved wildly inadequate in providing financial security for most of the millions of older Americans who might need home health aides, assisted living, or other types of assistance with daily living.\u00a0<\/p>\n

For decades, the industry severely underestimated how many policyholders would use their coverage, how long they would live, and how much their care would cost.\u00a0<\/p>\n

And as Jemmott belatedly discovered, the older generation of plans \u2014 those from the 1980s \u2014 often covered only nursing homes.\u00a0<\/p>\n

Only 3% to 4% of Americans 50 and older pay for a long-term care policy, according to LIMRA, an insurance marketing and research association. That stands in stark contrast to federal estimates that 70% of people 65 and older<\/a> will need critical services before they die.\u00a0<\/p>\n

Repeated government efforts to create a functioning market for long-term care insurance \u2014 or to provide public alternatives \u2014 have never taken hold. Today, most insurers have stopped selling stand-alone long-term care policies: The ones that still exist are too expensive for most people. And they have become less affordable each year, with insurers raising premiums higher and higher. Many policyholders face painful choices to pay more, pare benefits, or drop coverage altogether.\u00a0<\/p>\n

\u201cIt\u2019s a giant bait-and-switch,\u201d said Laura Lunceford, 69, of Sandy, Utah, whose annual premium with her husband leaped to more than $5,700 in 2019 from less than $3,800. Her stomach knots up a couple of months before the next premium is due, as she fears another spike. \u201cThey had a business model that just wasn\u2019t sustainable from the get-go,\u201d she said. \u201cWhy they didn\u2019t know that is beyond me, but now we\u2019re getting punished for their lack of foresight.\u201d<\/p>\n

\u201cWe want her to stay in her house,\u201d Angela Jemmott says of her mother, Jewell Thomas. \u201cThat\u2019s what\u2019s probably keeping her alive, because she\u2019s in her element, not in a strange place.\u201d(Bryan Meltz for The New York Times)<\/span><\/figcaption><\/figure>\n

The glaring gaps in access to coverage persist despite steady increases in overall payouts. Last year, insurers paid more than $13 billion to cover 345,000 long-term care claims, according to industry figures<\/a>. Many policyholders and their relatives reported that their plans helped them avert financial catastrophes when they faced long-term care costs that would have otherwise eviscerated their savings.\u00a0<\/p>\n

But others have been startled to learn that policies they paid into over decades will not fully cover the escalating present-day costs of home health aides, assisted living facilities, or nursing homes. And in other cases, people entitled to benefits confront lengthy response times to coverage requests or outright denials, according to records kept by the National Association of Insurance Commissioners<\/a>, the organization of state regulators.\u00a0<\/p>\n

Jesse Slome, executive director of the American Association for Long-Term Care Insurance<\/a>, an industry trade group, said long-term care was the most challenging type of insurance to manage. \u201cYou need multiple crystal balls,\u201d Slome said. \u201cAnd you have to look 20 years into the future and be right.\u201d<\/p>\n

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The Pandemic Paused a Long-Term Decline<\/strong>\u00a0<\/p>\n

The industry\u2019s wobbly finances haven\u2019t steadied despite a brief profitable surge during the coronavirus pandemic. Earnings rose because thousands of people who were drawing benefits, many in nursing homes or assisted living facilities, died from covid-19, and other policyholders died before using their insurance. Others stopped tapping their benefits because they fled facilities and went to live with their families, who provided unpaid care.\u00a0<\/p>\n

Overall, earnings went from $2.3 billion in losses in 2019 to two years of profits totaling $1.1 billion, before receding into the red in 2022 by losing $304 million, according to Fitch Ratings.\u00a0<\/p>\n

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