2006 State Report > Our Health > Long-Term Care > Long-Term Care Insurance
Our Health: Long-Term Care Insurance
As of 2004, more than 9 million Americans have purchased long-term care insurance policies, and coverage continues to expand each year. Nonetheless, the general lack of knowledge about long-term care (LTC) leaves many Americans confused and ultimately unprepared to plan for their long term care needs. Many individuals put off planning for LTC until care is actually needed, at which point they often face severely constrained financing options.
According to the AHIP (America’s Health Insurance Plans), a national trade association for insurers, virtually all long term care plans include coverage for nursing homes, assisted living facilities, home health care, hospice care, respite care and alternate care services. Other common benefits include case management services, homemaker or chore services, coverage of some medical equipment and caregiver training.
AHIP reports that the average age in the individual LTC insurance market has been falling steadily, decreasing from age 72 in 1990, to age 65 in 1999, to age 60 in 2002. The average age in the employer-purchaser LTC market has remained fairly constant since 1990 at age 45.
To help make it more affordable and desirable for people to purchase long term care insurance, a provision of HIPAA encourages states to offer tax breaks for the purchase of long term care insurance. At present, the primary payers of long-term care are Medicaid (40 percent), out-of-pocket spending (26 percent), Medicare payments for skilled nursing (20 percent), private insurance (8 percent), and other sources (6 percent). Most policymakers tend to agree that private long-term care insurance must play an important role in developing plans to meet the needs of the growing elderly population.
In 2002, less than 2 percent of long-term care insurance sales nationwide were made in South Carolina, ranking it 29th of the 50 states. Due to the strain on government resources caused by the aging of the population, individuals in the 45-to-50 age range should give greater consideration to the purchase of long term care insurance.