Long-term care insurance policy holders are much more likely to use a claim on their policy for at-home care rather than go directly into a nursing home, according to a study by the American Association for Long Term Care Insurance, and the insurance product has become a protection against nursing homes.
In 2011, half of all new LTC claims began with the policyholder receiving care at home, while less than a third of new claims began with the recipient receiving care in a nursing home.
“Long-term care insurance has really become nursing home avoidance protection,” said Jesse Slome, executive director of the LTC insurance trade group. “Today, people purchase this important protection in order to receive care in their own home for as long as possible. When costs remain stable, people are able to purchase more affordable levels of insurance coverage that will pay for longer periods of time.”
Rates for home care services have remained relatively flat in the past few years, Slome said. The national average national hourly rate for a home health care aide is $21, according to the AALTCI’s latest study, and $19 an hour for companions.
Meanwhile, the yearly cost of a semi-private suite in a nursing home rose 4.4% to $78,110 in 2011, according to a Metlife Mature Market Institute survey on the costs of long-term care. A recent study by the Employee Benefits Research Institute revealed the detrimental effect a nursing home stay can have on someone’s finances, as most spend down the majority of their wealth just months after entering the facility.
Written by Alyssa Gerace