Long-term care insurance on the rise nationwide

SYRACUSE - As the work force ages, more people are buying long-term care (LTC) insurance and more employers are including LTC in their benefit plans.

LTC insurance covers the cost of assistance when an individual can no longer perform the daily activities of life. A LTC insurance policy is designed

"As we age, more of us remain in contact with friends, parents, and relatives," says Joseph D. Falcone, secretary and treasurer of Syracuse-based Dominick Falcone Agency and recent member of the board of directors of the Independent Insurance Agents & Brokers of New York, Inc. IIABNY "These people are ending up in nursing homes so a whole generation is more aware of the cost of nursing care."

Most people think that all recipients of LTC services live in nursing homes but in actuality,more than 78 percent of adults who receive LTC services live at home, according to a 2004 study by Georgetown University.

John Hancock Life Insurance Company is one of the largest carriers of individual LTC coverage nationwide and currently the largest provider of employer-sponsored LTC insurance in the U.S., which the company began selling in 1988.

John Hancock advises considering LTC insurance for several reasons if you have assets you want to protect, if you want to avoid burdening your family with care giving responsibilities, if you don't want to depend on government programs for care, if you want to be able to choose where you receive care, and if you want high-quality care.

According to John Hancock, LTC insurance is on the rise nationwide. After entering the LTC market in 1987, John Hancock currently has more than 1 million LTC insurance policy holders.

In 2006, John Hancock sold more than 86,000 LTC policies. In the first quarter of 2007, John Hancock's new individual

LTC sales grew 55 percent. The company is a unit of Manulife Financial Corp. (NYSE: MFC).

Locally, Falcone has seen a 100 percent increase in inquiries about LTC and 75 percent growth in policies written over the pastyear. He attributes the growth to a general awareness of LTC and the inclusion of the insurance in people's retirement planning.

"People in their 40s and above should be seriously considering this option," Falcone says.

Falcone explains that LTC costs vary and are driven by three major factors your age, the monthly benefits you seek, and the options you select.

"For example, if you put compound interest on the benefit, it will change the price," Falcone says. We offer options for a two-year term, a three-year term, and a five-year term."

Falcone has sold LTC insurance to people as young as 30 and as old as 70 who range from blue-collar workers to high networth individuals.

"It is incredibly cheap if you sign up at a younger age," Falcone says.

He notes that 43 percent of all people in nursing homes are under the age of 65 and there not necessarily because of the ravages of old age, but instead because of strokes or car accidents.

Typical health insurance will only cover the initial 100 days of nursing-home care after a client is in the hospital, Falcone says, explaining why it is necessary to have LTC insurance.

Medicare and Medicaid do not generally cover LTC, according to Medicare. gov. Medicare pays only for medically necessary skilled nursing facility or home health care, and you must meet certain conditions to qualify for this care.

Medicare doesn't pay for "custodial care" - the type of LTC that assists people with the activities of daily living like dressing, bathing, and using the bathroom.

Falcone anticipates increased interest in individual LTC insurance. He has also noticed an increase in employers inquiring about LTC coverage for employees.

"Several companies like UNIM, LLC and MedAmerica offer LTC plans through payroll deduction," Falcone says. "Employee spouses and family are covered as well."

Information about LTC is available from insurance companies, independent brokers, and other organizations.

The Oswego County Office for the Aging is currently sponsoring free workshops to inform county residents about LTC insurance and options for their future long-term health-care needs.

Business factors

Businesses that want to offer LTC insurance benefits have many factors to consider.

AlphaStaff Group, Inc. a 10-year-old outsourcing firm for mid-market businesses headquartered in Fort Lauderdale, Fla. analyzes the work force of client businesses to determine what LTC benefits will be the most valuable to them, according to Dorothy Miraglia, director of benefits.

"For example, health plans and disability plans with LTC riders can provide LTC solutions that cover certain skilled nursing or home health-care services," Miraglia says. "But these are generally for a limited duration and covered only if there is demonstrated improvement in the individual's condition. They also typically do not cover ongoing chronic care such as an extended stay in an assisted living facility or nursing home, or a continuing need for a home health aide once a patient's optimal level is achieved."

Miraglia says that employers looking at LTC insurance plans should carefully consider the cost of each plan and maximum benefit levels for LTC related services as well as any accelerated benefits available or guaranteed insurability, to see if the cost of the premium justifies the benefit payable under this type of program.

"Bottom line, employers specifically concerned about providing a LTC solution may find that the benefits provided through their health plan or disability programs can help," Miraglia explains. "If not, they can always consider offering a LTC insurance benefit as a more comprehensive solution."

Miraglia says there is a growing need for LTC as people age and the average life span increases. After age 65, an American has more than a 70 percent chance of needing some form of LTC, according to the American Society on Aging.

As for the cost, Miraglia says it varies greatly depending on the type of care, the place of care, and the country in which care is provided.

For instance, the average hourly cost of home health care ranges from $15 per hour in Miami, Fla. to $21 per hour in Rochester, N.Y., according to a 2006 survey by the MetLife Mature Market Institute.

Miraglia says that most people prefer home health care - generally more affordable than nursing care but when averaged nationally, the cost of a five-hour visit by a home health aide is $953, over $24,000 a year for a home health aide visiting five hours per day, five days a week.