The profile of short-term care insurance (STCi) buyers reveals that 90 percent are age 61 or older. This is an indication that coverage gaps remain among long-term care coverage policyholders and Medicare recipients, according to an industry expert.
Short-term care coverage pays for up to 365 days of care compared to long-term care insurance, which could pay for up to 30 years of care.
Agents should approach an STCi sale as a complement to long-term care, Medicare Advantage and Medicare Supplement Insurance (Medigap). In addition, it’s important that agents understand STCI fills coverage gaps that seniors don’t want to pay for.
Since STCi is short term and the benefit term is therefore limited, STCI coverage is very affordable, said Jesse Slome, director of the National Advisory Center for Short-Term Care Information, part of the American Association for Long-Term Care Insurance (AALTCI).
Buyer data are part of a benchmarking initiative derived from over 30,000 STCi policies underwritten by the nine leading STCi carriers.
As many as 51 percent of buyers were between the ages 61 and 70, and 36 percent were between the ages of 71 and 80 when they applied for STCi coverage, the analysis found.
In North Carolina it’s possible to find an STCi policy that would cost a 65-year-old less than $250 a year in premium.
Included in the benefits are the reimbursement — as much as $250 each year — for the retail price of a prescription drug, a vision exam and glasses, a hearing exam and hearing aid, and a home health care aid and recovery services even if the costs are covered by other insurance plans, Slome said.
For seniors with prescription drug costs of more than $300 a year, the STCi coverage is a viable option, Slome said in an interview with InsuranceNewsNet.
Premiums for STCi products that dovetail with Medicare Supplement Insurance range from $250 to $700 a year, although some STCi policies are available for as little as $100 a month.
“It’s not as uniform as long-term care or other products because it’s still a small undefined industry and as you see more carriers come in, as I think they will, it will become more defined,” as carriers segment the market more finely, Slome said.
There were 26,237 short-term care policies sold in the first six months of this year. This is an increase of 71 percent from the estimated 15,362 short-term care policies sold in the first half of last year, according to the National Advisory Center.
STCi premiums jumped 54 percent in the first half of this year compared with the year-ago period. The AALTCI declined to release raw premium data from the survey of the nine carriers that sell STCi and represent the majority of STCi policy sales.
There are about 16 million Americans with Medicare Advantage plans, 11.5 million who pay for Medicare Supplement Insurance and 8 million who own long-term care policies.
“So if you think about it, that’s about 35 million people who pay or have some form of insurance and may have a gap,” Slome said.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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