“Most studies include home care services paid for by Medicare or Medicaid which do not reflect the usage for the vast majority of individuals who pay privately or have long-term care insurance coverage,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.   The independently conducted study examined the usage of home care services received by 1,000 men and women during a 1-week period in March 2010.

“The vast majority of both men and women home care recipients were over age 71 and most received care for three days a week or less,” Slome notes.  The study found that 88.6 percent of users were women age 71 or older compared to 81.1 percent who were men.  When it came to number of service days per week, two-thirds (66 %) of women utilized private in home care for three days a week or less.     Just under half (49%) of men received care for three days or less.  The remainder paid for four or more days.

Both men and women appear to pay for about the same number of hours of care per-day the study found.   One fourth of women (24%) received only one hour of (daily) care, while three-fourths (76%) received care for seven hours or less.  That compared to 73 percent of men.    Costs for home health care vary by the type of services required as well as by location, experts note. 

“The average cost today is about $20 an hour,” Slome says.  ”Someone needing care three days a week for six hours a day is looking at a cost of between $20,000 and $25,000 annually which is why increasingly individuals purchase long-term care insurance with a home care benefit.”

The number of days care was required varied significantly by age.  The study compared care usage among men and women age 64 with those age 82.  “People do need long-term care services at younger ages typically as a result of accidents or illnesses,” Slome points out.  The Association reports that the vast majority (90.7%) of long-term care insurance claims begin after age 70.  According to the study, some 20 percent of women age 64 received care for a 7-day period while another 40 percent received care for 5-days during the weeklong period.  Only 25.3 percent of women age 82 needed care for five days per-week or more.

Approximately 7.6 million individuals currently receive home care because of an acute illness, long-term health condition, permanent disability or terminal illness according to the National Association for Home Care & Hospice.  Annual expenditures for home health care are $60 billion.

The comprehensive findings of the study will be published in the 2010 Long-Term Care Insurance Sourcebook available from the Association.  To sign-up for access to the Association’s online resource center and to receive a copy of the 2010 Sourcebook, click on this link.

A leading national home care service company that examined only individuals receiving care services paid for individually or reimbursed by their long-term care insurance conducted the study for the industry’s trade organization.

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“Clearly the economy is having an impact on when individuals start their long-term care planning and what benefit levels and policy options they select,” states Jesse Slome, executive director of the long-term care insurance industry organization.  According to the annual study, 73.5 percent of buyers of individual policies were age 55 or older when they applied for coverage compared to 69 percent for the prior year (2008).

When it came to choosing benefit options, the study found a slight increase in the percentage of individuals selecting lower benefit levels and longer elimination (deductible) periods.  Both contribute to lower premium costs.  Some 43 percent of buyers selected initial daily benefit amounts of $149 or less; compared to 37.5 percent for the prior year.   The vast majority  (92.2 %) of buyers selected elimination periods of 90 days or longer; compared to 86 percent for the prior year.

 ”The most common benefit period selected remains three years,” Slome notes.  Some 29.5 percent of buyers selected a policy designed to pay benefits for at least three years.  The overwhelming majority added an inflation growth option that increased benefits each year.  “The 5 percent compound growth factor, chosen by 47 percent of buyers, can double or triple the cost of the base plan of insurance protection,” Slome adds.  “Buyers understand they are protecting future risk and saved in some areas but were willing to pay more for this important option.”

 The Association added two new areas to the 2009 study; average premium paid and marital status at time of purchase.  According to the findings, the average buyer between ages 45 and 54 paid $1,900 annually for their coverage.  “There was a significant average price range between companies,” Slome notes, “from as low as $1,000 to over $3,200 for this age segment.”

 The vast majority of buyers of long-term care insurance are married.  According to the report, some 54 percent of purchases involved couples covering both lives.  Nearly one-fourth (24%) involved couples or partners where only one individual was covered with 22 percent of policies purchased by single individuals.

The complete findings of the survey will be contained in the 2010 Long-Term Care Insurance Sourcebook published by the American Association for Long-Term Care Insurance.  Copies are mailed to all Association members in May 2010.

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