As LTC hits a crisis, a call to reach middle-income Americans

Long-term care in the U.S. is in crisis, and one way to help more Americans prepare for future care needs is for LTC insurance carriers to focus on the middle market.

That was one recommendation made by the American Academy of Actuaries, whose findings on the state of LTCi were discussed with the National Association of Insurance Commissioners Senior Issues (B) Task Force.

“No one can deny there is a crisis,” said Steve Schoonveld, a member of the academy’s Long-Term Care Committee.

Annual spending on long-term care services and support totaled $468 billion in 2021, he said, with $334 billion coming from public sources such as Medicaid.

'Destroying state budgets

“It’s already destroying state budgets and it’s going to get worse,” he said. “We have an aging population and a high percentage of need.”

The academy conducted a poll in February, which found that 62% of respondents believe state or federal LTC/LTSS programs will have the biggest impact on future LTCi markets. That was followed by tax incentives for LTCi products and limited Medicare home health benefits (41% each), and LTCi product innovation (35%).

With the last of the baby boom generation reaching age 65 by 2030, “it may be too late” for the LTCi industry to reach that age group, Schoonveld said. He recommended that the industry turn its attention to Generation X, as the oldest members of that age group will reach age 60 this year. “Let’s not leave Gen X behind,” he said.

“The goal is to reach the middle market,” he said and pointed to group LTCi sold in the worksite as one way to reach that segment with a product that is more affordable than buying LTCi on their own.

In addition, he called for LTCi carriers to support older adults and their families in navigating care when diagnosed with an illness or condition requiring care.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.