| The graying of America,
coupled with longer life expectancy, presents families with
significant challenges in caring for the elderly and disabled.
Today, one in nine Americans is age 65 or older, by 2030,
the ratio will be one in five. The U.S. Department of Health
and Human Services reports that a 65-year-old person in 1997
could expect to live to be 83 years olf and an 85-year-old
person could expect to live to be over 90. The U.S. Census
Bureau projects that the population of centenarians in 2050
will range from a low of 265,000 to an estimated high of 4.2
Over the last 35 years, the changing face of America has
had a dramatic impact on the meaning of Long-Term Care (LTC).
When insurance companies began offering LTC policies as
add-ons to life insurance several decades ago, long-term
care was defined as nursing home care only. It was considered
the last stopping place before the grave and not much thought
was put into the design of the benefits or the needs of
the person requiring assistance. In most cases, families
cared for their loved ones in their own homes, using nursing
homes as a last resort when home care became impossible.
Few people invested in LTC policies and fewer used them.
Longer life spans, higher costs, two-income households
and extended families spread all over the United States
have rendered most families unable to serve as sole caregivers
for their loved ones. But the need for long-term care remains
- and the demand for LTC policies to protect families from
financial ruin is growing. Today, six out of 10 Americans
will need some type of LTC and four out of 10 will stay
in a nursing home at least once. One in four people will
spend a year in a nursing home; 21% will stay five years
It is estimated that average nursing home care costs run
between $40,000 - $100,000 per year (more is some urban
areas); care is assisted living facilities ranges between
$12,000 and $40,500 per years and home health care costs
run between $15,000 - $90,000 annually, depending on time
spent caring for the elderly. These costs have a devastating
effect on families who must turn to personal resources to
pay for care. A recent Harvard University Study indicated
that 16% of those placed in nursing homes were impoverished
within three months; 72% were penniless within the first
year. People are being released quicker and sicker from
hospitals, requiring costly care. Health plans won' pay
for these services; Medicare coverage runs out after a limited
period of time and Medicaid will only help families when
they are penniless.
These staggering studies were a wake-up call to aging Americans,
who began buying LTC policies in ever-growing numbers about
a decade ago. The expanded demand has also increased the
number of choices available to families when deciding what
type of LTC is best for them.
Today's LTC policies are about life. Living longer, being
independent, having financial security, dignity and peace
of mind are all benefits that can be achieved through long-term
care coverage. LTC is also about choices. A well designed
plan offers a wide range of caregivers, care settings and
options that empower the individual to live life to the
fullest. LTC policies are all about flexibility and giving
consumers what they want.
What Do Consumers Want?
The expectations of 40-years-old consumers are vastly different
from those who are 70-years-old. The benefits the LTC consumers
would design if they could look into the future would be:
- Financial Security
- Peace of mind/Protections for their families
- Benefits they can afford
- Benefits they can understand
- Benefits that will be there when needed
Consumers Clearly want Flexibility. They don't want to
be locked into a static policy that won't enable them to
benefit from advances made in LTC benefits over the years.
In making a selection, LTC buyers should look for one policy
with a variety of options that can be selected, altered
when needed and subsequently discontinued as one's
lifestyle changes. People want solid benefits that put them
in control of their lives while protecting their assets.
Long-Term Care is the truest form of a family benefit you
can find. It impacts not only the covered individual, but
everyone in the family as well. Consumers tell us that they
want to stay in their own homes amid comfortable surroundings
as long as possible. Their families - who are also consumers
- tell us that they need help in order to keep their loved
ones at home. They want to do it, they have the will to
do it, but sometimes, they just don't have the resources,
the skills or the energy. This is where flexible, innovative
LTC policies are changing the future of LTC in America.
In 1995, the U.S. Census Bureau reported that 54 million
Americans (one in five) reported some level of disability
and one in 10 described their disability as severe. Despite
these numbers, Americans needing assistance have chosen
to live at home. It is estimated that only 24 million live
in health care setting, such as nursing homes and assisted
Assisted living facilities are the fastest growing type
of senior housing in the U.S. The American Health Care Association
projects that assisted living will sustain a compound annual
growth rate of 17% from 1996 through 2001, when it is estimated
that $33 billion will be spent on assisted living.
The American Seniors Housing Association has reported that
one-fourth of the 2.2. million Americans who live in housing
for seniors have chosen assisted living complexes.
Assisted living facilities off residents the security of
24-hour protective oversight in a home-like atmosphere,
meals, housing and a range of services, including social
activities that promote independence and enhance the quality
of life for the individual. Assisted living benefits promote
dignity, independence, personal privacy and autonomy. They
usually offer assistance with medications and arrange for
health care and skilled nursing care, as needed, on an intermittent
basis. They are ideal settings for seniors and disabled
persons who require some assistance, but do not require
24-hour nursing care or medical monitoring. This type of
housing is becoming increasingly popular.
Home care is also extremely popular. In 1998, the national
Association for Home Care released statistics indicating
that home care expenditures had reached a level of $42 billion,
with more than 20,000 home care organizations serving eight
million people. In 1999 it was reported that there were
an estimated 397 million home care visits.
While the demand for home care visits is increasing, the
cost is also rising. According to Consumer Reports on Health,
the average cost of a full day (eight hours) of care from
a home health care aide is approximately $200 per day.
The message is clear; Americans want to stay in their homes
and home-like settings such as assisted living Facilities,
and they are seeking Long-Term Care benefits that will enable
them to do so.