Insuring Independence: Lessons learned from Private LTC Insurance Sponsored by: Center for Medicare and Medicaid Services Marc A. Cohen, Ph.D. LifePlans, Inc. March 26, 2002 Purpose of Presentation • To provide brief background on the private long-term care (LTC) insurance market • Summarize experience of individuals receiving benefits under their private LTC policies and answer the following questions: – How is family caregiving affected? – Can claimants obtain adequate services? – Do benefits help keep people in the community? What are the Characteristics of the LTC Insurance Market? • The market is growing rapidly – Individual Market: 11% growth in sales (over decade) – More than 7 million policies sold and about 4.0 million in-force. – Employer Market: 32% growth in sales – About 3,500 employers offer plans and 800,000 employees have coverage • Much competition: 100 companies although top 20 account for more than 80% of market • Still, pays less than 10% of nations LTC bill. Who is the Target Market? • Middle to Upper Income Elders who would not immediately qualify for Medicaid. • Somewhere between 25% and 35% of elders • Those who may have few available informal supports or who worry about not having them at the time they may need LTC. • Younger adults who view LTC insurance as an integral part of retirement planning. • Somewhere between 55% to 70% of age 40+ Study • Eight large LTC insurers contributed sample and we interviewed about: – 700 claimants receiving benefits in the community – 500 claimants receiving benefits in assisted living facilities or nursing homes – 425 family caregivers • Sponsored by – Office of the Assistant Secretary for Planning and Evaluation Department of Health and Human Services (ASPE); – Robert Wood Johnson Foundation Home Care Research Initiative (RWJ) Profile of Claimants in the Community • Average age of 79 • 68% female • 54% unmarried • Average ADL limitations: 3.3 • 30% are cognitively impaired • 25% have as primary diagnosis stroke or CVA • 85% have at least 2 or more ADL limitations or are cognitively impaired How is the Insurance Performing for Claimants in the Community? Average Monthly benefits from Private Insurance are Relatively Generous Claimants are Satisfied with their Insurance More weekly hours of care Majority of family caregivers continue to provide the same or more support How the Nature of the Care Provided has Changed in the Presence of LTC Insurance • Less ADL Care • Somewhat less IADL Care • Greater companionship and meeting "Expressive Needs" Less Stress on Caregivers: How has presence of insurance affected informal caregiver stress? Ability to stay longer at home: In the Absence of Policy Institutional Care would be Sought? Are the ADL and IADL Needs of Home Care Claimants being Met? • Unmet Need: – Do they think they need care that they are not getting/using? • Undermet Need: – Do they have to wait too long to receive care? – Do they receive care but not enough of it? Extent to which claimants feel needs are being met Key Observations • Service availability, scheduling, continuity and coordination of caregivers may all be important factors that contribute to unmet and undermet need issues. – Multiple caregivers – Are responsibilities being clearly divided among formal and informal caregivers? – Are different formal caregivers coming each time? – Responsiveness of service delivery system – Reluctance to use Services • Also holds true in institutional settings Do policy features affect levels of reported unmet/undermet need? • Policy benefits -- duration and level of coverage -- have no effect • Policy design did make a difference: The Disability design (i.e. cash payment) is associated with lower levels of unmet and undermet need • Didn't appear that care management made a distinct difference although difficult to isolate potential independent impact. Summary Observations • "Money isn't everything" – Financing is not sufficient to assure disabled individuals' needs are being met – Service delivery and provider issues are critical to making money work for disabled person • There needs to be a developed service infrastructure in place to enable care managers to make a difference for clients • For most, insurance-financed formal care does not replace family care. The two systems are complementary and working hand-in-hand. • Private insurance is succeeding in enabling many disabled claimants to remain in their homes.