Long-term care claims are on the rise, according to the American Association for Long-Term Care Insurance, and insurers paid out a record $14 billion to policyholders in 2023.
In 2020, by comparison, insurers paid $11.6 billion in claims, according to the advocacy organization.
“There were over 350,000 individuals who received claim payments last year,” AALTCI Director Jesse Slome stated. That amount represents a “nominal” increase from the previous year, he added, when AALTCI reported that benefits were paid to 345,000 claimants.
“The increase in benefit payouts was anticipated when insurers priced these policies,” Slome said.
The number of claims paid by insurers each year “continues to grow as more policyholders age into needing the type of care that long-term care insurance pays for,” he added.
Indeed, the youngest baby boomers are turning 60 this year, with the oldest in their late 70s. Benefits typically are paid to policyholders when they receive qualifying care in their own home, an assisted living community or a skilled nursing facility.
The data reported in the current report are for claims paid for individuals with traditional or health-based long-term care insurance.
“Data for linked-benefit policies is hard to calculate,” Slome said. “LTC policies tend to need many years before aging policyholders are likely to need care and there are so many variations gathering this information would be formidable.”
Individuals are paying up to 27% less for linked benefit long-term care insurance coverage — policies linked with another type of policy, such as life insurance — than they were a year ago, according to an annual price index released by AALTCI earlier in the month. In 2023, costs generally were 10% to 15% lower than they were the previous year, according to AALTCI.
