AHIP Statement On Long-Term Care Insurance
posted by Clare Krusing
on November 16, 2015
For Immediate Release
Washington, D.C. – In response to the Health Affairs report released today on long-term care (LTC) insurance financing, AHIP President and CEO Marilyn Tavenner released the following statement:
“While today’s report helps to build on the important dialogue around long-term care funding, it’s critical that funding proposals account for combined partnerships that demonstrate cost-savings for individuals and states, rather than stand-alone reforms. A sustainable solution is best achieved through a strong collaboration between the public and private sectors to build on their combined strengths and ensure the millions who depend on long-term care have access to the services they need.”
Additional background on LTC insurance:
- It’s estimated that $725 billion is spent annually on LTC in the United States – through a combination of paid and unpaid caregiving, Medicare, Medicaid and Veterans’ Affairs spending, and private LTC insurance.
- This cost, and the growing need for services – an estimated 70 percent of people over the age of 65 will need LTC services in their lifetime – is why we believe the private LTC industry will continue to play an important role in providing coverage, protection and care for our aging Americans.
- Because LTC insurance covers a majority of LTC costs, individuals are not forced to rely on Medicaid, reducing Medicaid spend-down. In fact, the 7.4 million current policyholders are expected to save the Medicaid program about $50 billion over their lifetimes.
- A recent report, “Benefits of LTC Insurance,” underscores the value of private LTC insurance for individuals and families, including those served by the Medicaid program.
- LTC insurance provides a more cost effective way to pay for LTC services rather than relying on personal savings. A 60-year-old person would have to put aside $1,666 a month over 22 years to match the protection provided by LTC insurance (based on a $188 average premium per month).
- LTC insurance claimants reduce their out-of-pocket costs for LTC services between $3,000 and $5,000 a month depending on the service setting. Privately-insured individuals receive 35 percent more total hours of care than those without private coverage.
- The vast majority of consumers are satisfied with the way their LTC insurance company has serviced their claims. Ninety-four percent of people filing claims reported having no or satisfactorily resolved disagreements with their insurance company. Only about four percent reported that their claims were denied.
- Individuals caring for family members with private LTC insurance are nearly twice as likely to be able to work compared to those whose family members do not have such coverage. Caregivers for LTC insurance claimants experience less stress in finding appropriate care for their relatives with disabilities, because they receive assistance with navigating and finding services from care coordinators provided by LTC insurers to their customers.
- Addressing the LTC funding challenges calls for an active and effective public-private partnership. Our recommendations include:
- Strengthening the safety net and coverage of LTC for low-income individuals;
- Encouraging those who are able to save and plan for their future LTC costs through consumer education and tax incentives for purchasing LTC coverage; and
- Creating a federal and state regulatory environment that encourages growth, innovation and access to affordable LTC insurance products.
Providing Health Benefits for Over 200 Million Americans.