Long-term Care (LTC) Insurance has existed for decades however it is becoming more prevalent for a few reasons:
- Baby boomers are finding out that once you need the coverage, it’s too late. Disqualification occurs if an individual has a debilitating condition, or is over the age of 75.
- Funding for government programs (Medicaid) is falling short. Additionally Medicare only covers short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab only not for custodial care, if one’s lifestyle changes and they need supervision and help with day-to-day tasks.
- Carriers started getting out of the market, so prices got outrageous. According to 2020 data from the National Association of Insurance Commissioners there are approximately twelve carriers selling LTC policies today.
- States are beginning to pass legislation that mandates LTC coverage through taxes, because they are realizing Medicaid funding will run out and need additional tax dollars to help their citizens.
This collision of issues means long-term care insurance is more important than ever, and Oswald Companies’ subject matter experts guide employers to building the best LTC policy.
Your employees need to understand Long-Term Care Insurance
Nearly 70 percent of 65-year-old people will need long-term care services or support, according to 2020 data from the Administration for Community Living, part of the U.S. Department of Health and Human Services. A long-term care insurance policy helps cover the costs of that care when you have a chronic medical condition, a disability or a disorder such as Alzheimer’s disease. Most policies will reimburse you for care given in a variety of places, including your home, a nursing home, or an assisted living facility.
Long-term care insurance protects an individual’s savings so if/when the need for long term care arises, they aren’t paying for it outright. Medical insurance is not long-term care insurance. Long-term care insurance also gives the employee more choices for care. Relying on government programs restricts locations and type of care. Many don’t want to be restricted by the government’s limited option.
The option for long-term care insurance is important to the employers as well!
Your organization can benefit greatly by offering this benefit
Employers have the opportunity to make benefits more convenient and economical for their employees.
Employee retention is at staggering lows, and employers need distinctive benefits that allow them to stand out. Considering long-term care costs is an important part of any long-range financial plan. Similar to benefits such as a 401K, employees of any age need to be educated about future planning benefits.
On an individual basis, LTC is extremely expensive. If the employer contributes, it is less because the carrier knows they will get participation.
Group plans can be better and more convenient, as well as lower cost. Employer group plans generally offer a base plan of benefits with less stringent underwriting than for individual policies. Sometimes they offer enhanced benefits contingent upon additional underwriting.
Finally, states have begun to mandate LTC insurance, leaving employers without much notice or time to comply. Employers can avoid the hassles of urgent compliance and save employees money while providing better LTC solutions.
Learn more about the state plans falling short, by joining our LTC webinar on April 27 at 11:00 a.m. EDT. Click here to register.
(Sources: content.naic.org)