U.S. Long-Term Care Insurance Companies Paid $14B in 2023 Claims

Jan 25, 2024 | Business

 The nation’s long-term care insurance companies paid out a record $14.1 Billion to policyholders on claim in 2023. The data was revealed today in a new report from the American Association for Long-Term Care Insurance (AALTCI).

“There were over 350,000 individuals who received claim payments last year,” states Jesse Slome, =director of the advocacy organization. AALTCI reported data for claim benefit payouts for policyholders with traditional long-term care insurance.

“The amount paid by insurers continues to grow as more policyholders age into needing the type of care that long-term care insurance pays for,” Slome explains. “In 2020, insurers paid out $11.6 Billion,” reports Slome adds. “The increase in benefit payouts was anticipated when insurers priced these policies.”

According to AALTCI’s Slome, the amount reported represents claims paid for individuals with traditional or health-based long-term care insurance. “Data for linked-benefit policies is hard to calculate,” the long-term care insurance expert explains. “LTC policies tend to need many years before aging policyholders are likely to need care and there are so many variations gathering this information would be formidable.”

For 2023, the Association reports that benefits were paid to a projected 353,000 policyholders. “This represents a nominal increase over the prior year,” Slome shares. For 2022, AALTCI reported benefits were paid to 345,000 claimants. During the calendar-year 2020, AALTCI data reported 325,000 policyholders received claim benefits.

“Long-term care insurance benefits are typically paid to individuals who receive benefits for qualifying care in their own home or in an assisted living facility,” Slome points out. “Benefits also are paid when policyholders require care in skilled nursing home settings.”

The AALTCI data is gathered and corroborated with leading industry actuaries including historical average annual growth rates from the last 10 years from companies’ year-end reporting data.

Access the 2024 Long-Term Care insurance Price Index and other current data and statistics at the Association’s website. The organization reports industry costs for individuals and couples at ages 55, 60 and 65. Go to https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2024.php.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of long-term care planning. Since 1998 AALTCI has supported insurance professionals who market both traditional and hybrid long-term care solutions. To access information, go to https://www.aaltci.org or call the organization at 818-597-3227.

American Association for Medicare Supplement Insurance
Jesse Slome
818-597-3205
https://www.aaltci.org

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  • Finance

Long-Term Care Insurance Costs Remain Relatively Level for 2024

Jan 23, 2024 | Business

 Costs for traditional long-term care insurance coverage are level compared to the prior year according to the 2024 Long-Term Care Insurance Price Index released today by the American Association for Long-Term Care Insurance.

“In some cases, prices decreased a little compared to the prior year,” states Jesse Slome, directory of the national organization that advocates for the importance of long-term care planning. “The declines were minimal and there were a few instances where costs rose but again the increases were nominal.”

According to the organization’s 2024 Price Index report, a couple, both age 55, who each obtain long-term care protection valued at $800,000 (total) for their needs at age 85 can expect to pay around $5,000 annually.

“This couple could pay as little as $2,080 combined if they opted for policies that did not include any future growth of benefits,” Slome acknowledges. “Adding a 3 percent annual inflation growth factor increases their cost to $5,025-per-year. Selecting coverage that will grow at 5 percent annually increases their cost to almost $8,600 annually.”

While prices for traditional long-term care insurance offerings remained relatively level, the same was not true for linked benefit policies.

“Costs for linked benefit products are substantially lower compared to a year ago,” reports the long-term care insurance expert. “The linked-benefit market is more competitive and life insurers clearly are looking to capture more premium. Rising interest rates provided them with an opportunity to offer reduced premium costs,” Slome explains.

According to the 2024 Long-Term Care Insurance Price Index, a single 55-year-old male purchasing a life plus LTC policy providing around $520,000 of potential long-term care benefits at age 90 could expect to pay $5,022 in annual premiums. The Association’s 2023 Price Index reported that same coverage would have cost $5,600. Access the 2023 LTC Price Index at https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php.

The American Association for Long-Term Care Insurance (https://www.aaltci.org) advocates for the importance of planning and supports insurance professionals who market both traditional and hybrid LTC solutions. To learn more or to connect long-term care insurance specialists visit the organization’s website or call 818-597-3227.

American Association for Medicare Supplement Insurance
Jesse Slome
818-597-3205
https://www.aaltci.org

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  • Finance

Long-Term Care Insurance Sales Will Benefit from Legislation Moving Forward Predicts AALTCI

Sep 10, 2022 | Business

 The just released final text of the Enhancing American Retirement Now (EARN) Act maintains the positive feature that will increase sales of long-term care insurance predicts the American Association for Long-Term Care Insurance.

“The bipartisan measure passed the Senate committee in June and the just-released final text maintains the advantageous provisions to encourage long-term care planning,” explains Jesse Slome, director of the organization. The final draft will be used to negotiate the final text with the U.S. House of Representatives.

“The EARN Act allows the use of tax-exempt retirement plan distributions to pay for long-term care insurance premiums,” Slome explains. “Specifically, it excludes such distributions from the gross income of an insured individual up to $2,500 per individual starting in 2024.” Subsequent amounts will be indexed annually to track inflation.

Roughly 60 million Americans have 401(k) plans in place according to AALTCI data. The average 401(k) balance for individuals between ages 55 and 64 is $232,000. The average balance for those 65 and older is $255,000 according to recently reported data.

“Using a small portion of your retirement plan to protect your full retirement savings will be seen as a very smart financial move,” Slome suggests. According to the Association’s 2022 Long-Term Care Insurance Price Index, a 65-year-old male could pay between $1,700 and $3,135 yearly for future benefits of $296,000 when they reach age 85. Insurance costs more for women.

According to Slome, the tax-exemption benefit will apply to both 7702(b) traditional LTC insurance plans as well as those meeting 101(g) IRS provisions. “That’s welcome news for the linked-benefit long-term care policies that meet the 101(g) provisions,” Slome notes. Not all linked-benefit or hybrid long-term care plans meet these provisions he adds.

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of long-term care planning and supports insurance professionals who market both traditional and hybrid long-term care solutions. To learn more about long-term care insurance tax information, go to https://www.aaltci.org/long-term-care-insurance/learning-center/tax-for-business.php.

To learn more about long-term care planning or for insurance costs from a national specialist, go to https://www.aaltci.org or call the organization at 818-597-3227.

American Association for Medicare Supplement Insurance

Jesse Slome

818-597-3205

https://www.aaltci.org

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  • Business

Washington’s Long-Term Care Insurance Program Put on Hold

Dec 20, 2021 | Business

 The Washington State long-term care program was put on hold today according to information shared by the American Association for Long-Term Care Insurance.

“Governor Inslee and the state’s legislative leaders agreed to delay the WA Cares payroll tax on employees,” shared Jesse Slome, director of the organization. Slome was sharing updates with information with insurance professionals who market long-term care insurance solutions.

“The stated reasoning is a desire to give legislators the opportunity to make refinements to the new program,” Slome explained. “However, I’ve seen this play before and I’d say they are gauging consumer anger at being taxed.”

Slome noted that a national long-term care insurance program was included and passed in 2010 as part of the federal Affordable Care Act (Obamacare). “While it was passed and signed into law, it basically vanished from existence virtually overnight,” Slome shared. “Will the WA Cares Act suffer from the same fate, only time will tell.”

A Washington state employee earning $100,000 would be taxed $48 monthly Slome explained. “That doesn’t sound like a huge sum but for someone in their 20s and 30s it’s money for a benefit they don’t think they’ll ever need,” Slome adds.

Slome advised those agents who have sold policies to individuals in Washington to maintain active communication with clients during this time. “Cancelling a policy could result in voiding their exemption from the tax,” Slome cautions. He notes that insurers have indicated they will charge back commissions should individuals not maintain their policy in force for a certain period of time.

The American Association for Long-Term Care Insurance advocates for the importance of long-term care planning and supports insurance professionals who market LTC insurance solutions. For more information, visit the organization’s website at www.aaltci.org.

American Association for Medicare Supplement Insurance

Jesse Slome

818-597-3205

www.aaltci.org

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  • Business

Age When Long-Term Care Insurance Claims Begin Reported by AALTCI

Nov 29, 2021 | Business

 Half of long-term care insurance claims begin when policyholders are in their 80s according to data reported today by the American Association for Long-Term Care Insurance.

“Millions of Americans are living into their 80s, 90s and even 100s,” explains Jesse Slome, director of the long-term care insurance organization. “When you live a long life, the likelihood that you’ll need some long-term care increases exponentially.”

The Association has just posted data regarding ages when long-term care insurance claims begin. “Half of claims begin between 80 and 89,” Slome reports. “Some 27 percent begin between age 80 and 84, with 23 percent between ages 85 and 89.” Twelve (12) percent of claims begin when the policyholder is age 90 and older.

If an individual wants the benefits of long-term care insurance to pay for needed care, coverage must generally be purchased prior to turning age 65. “Unfortunately, many people don’t do any planning until the need for care is either imminent or already present,” Slome admits. “At that point it is too late because insurance companies will only issue policies to those who can health qualify.”

According to the Association the average age for those buying new traditional long-term care insurance policies remains between 56 and 57. “The cost of coverage will be significantly less than if you wait until your 60s or 70s,” Slome explains.

The organization recently undertook a campaign reporting long-term care insurance claims statistics. “We regularly encounter denial among consumers who mistaken believe there’s little or no risk,” Slome concludes. “We share real information focused on how many people need long-term care and how and when they benefit from owning long-term care insurance. The hope is that an educated consumer will better understand the risk they face and get information to decide what is best for their needs.”

The American Association for Long-Term Care Insurance (AALTCI) advocates for the importance of planning and supports insurance professionals who market both traditional and hybrid LTC solutions. To obtain long-term care insurance costs from a long-term care insurance specialist call the organization at 818-597-3227 or visit their website www.aaltci.org/ltcfacts-2022/.

American Association for Medicare Supplement Insurance

Jesse Slome

818-597-3205

www.aaltci.org

ContactContact

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