What if I told you…

“7 out of 10 people age 65 and over will need long-term care services and support at some point in their lives."

Nothing new, right?

For those of us in the long-term care industry, we know this statistic all too well. But I promise you, many people still do not understand what it actually means.

The words “long-term care services and support” do not, necessarily, mean a long-term stay in a nursing facility. It means, statistically speaking, 7 of 10 people turning 65 will require health and personal care needs at some time in their lives — also known as activities of daily living (ADLs). Needing help with ADLs can range from, a few weeks of home health care following an outpatient procedure, to a 1 to 2-year stay in a nursing facility after a severe stroke.

Recent data shows, 25% of individuals admitted to a nursing facility will stay 3 months or less and approximately half of the residents stay at least one year, with 21% confined for up to 5 years. In most cases, patients are transferring from a short hospital stay to a nursing facility for recovery and rehabilitation. The majority of patients that stay up to 5 years are typically single females aged 85 and older that do not have any family support.

Shorter hospital stays continue to grow due to advances in medical and surgical procedures that are less invasive. These advances have resulted in shorter duration hospital confinements and the growing need for post-acute care in a facility or in the home.

What if I also told you…

Even with having an LTC policy, the odds of your clients spending large sums of money for their care is still great.

The reason — 92.1% of Long Term Care policies have an elimination or deductible period that ranges from 84 to 100 days, leaving your client with a hefty bill to pay for long-term care services. Also, with LTC carriers continuing their pace for record number rate increases, many are left with no other financial choice but to increase their elimination period or pay a much higher premium. This leaves the policyholder to self-insure for a much longer period of time than the original 100 days they had planned, putting at risk their cash and investments to cover the cost of care.

In 2020, private out-of-pocket spending for long-term service and support was $64 Billion. And while LTC policyholder's expenses are covered for a lengthy stay in a nursing facility, they too, can experience an immediate and significant out-of-pocket cost due to having to self-pay their elimination period for their first day, week, and months of care.

What does this mean?

Having coverage for a short-term stay can be just as important as coverage for a long-term stay. Especially when LTC insurance is not available due to an individual's health, age, or finances. But there is a solution — purchasing a Short Term Care insurance plan (STC).

STC plans are ideally suited to provide a substantial benefit amount for a nursing facility, assisted living facility, and home nursing care in a relatively short period of time. Plus, given the need for LTC carriers to issue premium hikes, STC plans offer a more cost-effective, peace-of-mind approach to providing coverage.

These STC Limited Duration plans offer clients:

• Up to 360 days of care in a Nursing or Assisted Living Facility
• An additional 52 weeks of Home Health Care
• Facility and Home care benefits totaling over $200,000.

As your clients reach retirement age and beyond, keep in mind the options available to best suit their needs and protect their finances. Many of us will find ourselves needing long-term and/or short-term care in the future. Offering the right plan, not only helps protect your client’s nest egg — but also helps them worry less about paying costly medical bills and instead, focus more on recovery.

If you would like more information on Short Term Care Insurance, please send me an email or give me a call.

Jamie Sarno
Axis Medicare Advisors
jsarno@axismedicareadvisors.com
502-599-9741

Sources:
https://brokerworldmag.com/2021-milliman-long-term-care-insurance-survey/
https://crsreports.congress.gov/product/pdf/IF/IF10343
https://www.healthinaging.org/age-friendly-healthcare-you/care-settings/nursing-homes
https://acl.gov/ltc/basic-needs/how-much-care-will-you-need

Want to learn more from Jamie about short-term care? Then be sure to watch his recent webinar, "An Alternative to Long-Term Care Coverage," on-demand in the LECP webinar archives.