With the pandemic, some people may decide against ever going to a nursing home — but they’ll still need a way to pay for their care.
COVID-19 has changed many Americans’ plans — where they’ll vacation next, when they’ll retire and even how they’ll earn a living. The last year has also had people rethinking where they’ll age, and what kind of care they’ll receive when the time comes. Enter long-term care insurance: policies that aren’t particularly new, but will move to the tops of minds as individuals make these decisions and figure out how to fund their choices.
“The pandemic has brought the health and well-being of loved ones — especially that of older family members — to the forefront in an even greater way,” said Jeff Beligotti, vice president and head of long-term care solutions at New York Life. “As a result, many families wanted to care for loved ones at home, so flexibility when it comes to when, where and from whom older adults receive care has been a priority for our policy owners and is a trend we expect will continue.”
Nursing homes were hard hit by the pandemic, despite the great lengths and efforts many administrators and staff members have taken to ensure the safety of themselves and their patients. A nursing home in Washington state was one of the first places to suffer an outbreak in the U.S. Dozens of patients died or became ill after contracting the virus, and family members had difficulty finding answers in a quick and efficient manner during such a stressful time.
More than 112,000 nursing home residents have died from COVID-19 between May 2020 and February 2021, according to the Centers for Medicare and Medicaid Services. Comparatively, approximately 446,000 people have died in the U.S. from the virus, Johns Hopkins University of Medicine data show. The university has been tracking the number of cases and deaths globally since the pandemic began.
Not only were loved ones worried about the medical implications of the virus in a nursing home or assisted living facility, they were also concerned about what isolation and extreme distancing measures could mean to the mental and emotional well-being of their family members and friends inside these centers.
Some were left to wonder if they should pull their relatives out of these facilities, but those decisions require extreme consideration of easy access within the home, the amount of medical attention one needs and who or how much time can be dedicated to care.
“The pandemic has shown consumers how important it is to plan for long-term care,” said Scott Olson, co-owner of LTCshop.com, which helps Americans find long-term care policies. Consumers typically associate long-term care insurance with paying for care at nursing homes, but there are policies that offer similar benefits for those who would rather age at home. “Most policies will allow you to use 100% of the benefits at home,” Olson said. Policies could even help pay for home renovations for aging in place, such as installing a walk-in shower and railings down the hall, he said.
Long-term care insurance is one way to pay for health care in old age, and plan for the medical attention they’ll need when they are no longer able to do so themselves. This insurance is helpful to the patient’s families as well, who often need to assist in decision-making and elderly care.
Of course, it’s not for everyone. Long-term care itself can be expensive, regardless if it is at a facility or in a home, and it is a policy with benefits you may or may not need later in life. Deciding on which policy to get — or if it’s worth getting at all — depends on numerous factors, including what coverage will be necessary, alternatives to pay for health care in old age, and the price to pay until then.
The full consequences of the pandemic are still unknown, but already analysts expect to see a few changes to long-term care insurance. Claim termination rates, policy lapse rates, and the delivery of long-term care services may change as a result of COVID-19, according to the American Academy of Actuaries. Interest rates could lead to higher premiums for new business, said Bruce Stahl, a member of the Academy’s Long-Term Care Reform Subcommittee.
Americans should prepare for long-term care now, before they could possibly contract the virus or suffer any other health problems, Olson said. It is yet to be seen what type of chronic health issues a person may face as a result of falling ill to the coronavirus, even if they recover from the virus in the short-term. “The most important thing is to get long-term care insurance while you’re still healthy,” he said. Waiting too long increases the risk of health complications, which could render a person uninsurable or push premiums to be much more expensive.
Lacking a plan, whether it’s long-term care insurance or not, could result in devastating financial repercussions should an emergency arise, leaving people with hardly any assets or their family members to pick up the pieces.
“Even if you could fund long-term care expenses out of pocket, most people would quickly exhaust their retirement savings if they needed care for an extended period of time,” Beligotti said. “Sharing the risk through a small policy can help reduce the financial and emotional burden of a long-term care event, ensure you can receive care in your preferred setting and help preserve retirement assets.”