How to Tackle the Long-Term-Care Crisis

While 70% of retirement-age Americans will need continuing care at some point, merely 14% are very confident they’ll be able to afford it.

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America’s long-term care crisis warning signs are mounting. The latest red flag is the rising cost of long-term care services across all provider types, with increases up to 10% over the past year, according to the 2023 Genworth Cost of Care Survey. 

Clients are already facing the convergence of major trends that pose a potentially devastating dilemma that can compromise their aspiration to age in place and enjoy a happy, healthy retirement. 

The retirement crisis remains a menacing presence. Overall, 80%—or 47 million households— with older adults are financially struggling or at risk of economic insecurity as they age. Recent research also shows a short-sighted attitude regarding long-term care services. While 70% of retirement-age Americans will need continuing care at some point, merely 14% of retirees are very confident they’ll be able to afford it. Lastly, our country’s health is bleak, having the lowest life expectancy among high-income countries.

As the population ages, the threats promises to intensify. Older generations will look to their trusted advisers to weather the storm, providing an opportunity to help heighten clients’ long-term care readiness while bolstering agents’ profitability. 

See also: Using Data Science to End Surprise Billing

Become a Partner in Health 

Today’s rapidly aging society must prompt a paradigm shift within the insurance industry marked by fundamental change in the attitudes of professionals and how they perceive and service their clients.  

The inherent nature of the agent-client relationship has been somewhat fractured amid carrier business directives to increase rates and decrease payouts or claims. This longstanding approach must evolve into one centered on a “Best Alignment of Interests” model that creates a mutually beneficial partnership among carriers, agents and policyholders. 

The critical topic of long-term care is often ignored due to a lack of awareness. One of the most common, and perilous, misconceptions among agents and policyholders is that Medicare covers long-term care. Medicare only covers basic medical needs, and not long-term care services. 

This is a highly underserved market where agents can lend their vital support and promote extended quality of life. Formulate a plan to help clients live the best possible versions of their lives. 

Embrace Innovation for Aging Boomers

The Baby Boomer explosion means professionals will experience a surge in clients who are painfully unprepared, and whose specific needs must be addressed. 

Despite the population’s urgent need, long-term care insurance purchases are declining, with 2022 marking the lowest sales volume in over two decades. This trend is understandable due to heritage issues like inaccurate assumptions, which led to significant rate increases, lack of product innovation, agents and carriers dropping out of the market and overall unfavorable consumer perception of the segment. 

The insurance sector must foster innovation that will ignite behavioral and buying changes and safeguard elderly individuals from financial insecurity during their retirement phase of life. 

Begin with an application overhaul. Innovation can streamline the LTCI application process, which has traditionally involved in-person exams and lengthy procedures that frustrate consumers and result in high rejection rates. Today’s improved risk selection and application processing techniques enable insurance products to provide decisions within an hour, leading to better risk selection and significantly improved consumer experiences.

Innovation is transforming claim handling, making the process more efficient and precise. Automated initial claims routing streamlines the process and swiftly directs claims to the appropriate department or personnel for evaluation and next steps. We must replace legacy systems with automation that saves time and resources, leading to faster response times and reducing the risk of claims getting lost or mishandled.

Additional advancement areas exist in identifying potential policyholders who might require assistance and make future claims for health challenges. Those opportunities require insurers to analyze massive data sets mapped against population health metrics.

See also: Healthcare Inflation's Impact on Auto Insurers

An Ounce of Prevention Brings Big Mutual Benefit

Preventative services play an integral role in protecting and promoting health, yet only 5% of adults 65-plus received these recommended services in 2020. By using data analytics and predictive modeling, insurance carriers can reach out to these individuals, offering assistance, guidance and resources. This preemptive approach can prevent or mitigate problems, helping policyholders maintain better health and quality of life.

There’s a difference between living well into old age and living “well” into old age. Therefore, some insurance carriers are incorporating creative wellness programs into their pre-claim processes. They offer policyholders access to targeted, personalized health and wellness services like fitness programs, nutrition counseling, mental health support and preventive screenings. One example is Assured Allies’ NeverStop, an innovative wellness rewards program that’s built right into your insurance policy. By encouraging healthier lifestyles and early intervention, these insurers reduce the chances of claims arising from preventable health issues while improving the overall customer experience, building stronger and deeper connections.

Small interventions can make a huge impact on health and wellbeing. Falls are the leading cause of injuries for older Americans, with one out of four Americans age 65-plus falling each year. Simply installing a grab bar in a bathtub can decrease fall hazards by 76%. Treating hearing loss may lower the risk of dementia, with hearing aids reducing the rate of cognitive decline in older adults at high risk by almost 50% over three year.

A Critical Wake-up Call 

The inevitable reality facing insurers must be addressed to offset its accompanying, significant cost. We should be encouraged by what we are seeing, as insurtech companies are introducing innovative solutions that can revolutionize the insurance industry and fill the gap in long-term care. These efforts are powered by our social obligation to serve the needs of the growing elderly population, and by the business opportunities they present. The combined force of dynamic solutions and adaptive client service methods can drive the industry successfully into the future. 

Larry Nisenson

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Larry Nisenson

Larry Nisenson is the chief growth officer for Assured Allies.

For more than 25 years, he has held leadership roles in the insurance and financial services industry, including as chief commercial officer for Genworth's U.S. life insurance business, covering long-term care life and annuity products. Prior to that role, Nisenson held senior positions at Plymouth Rock Assurance, AXA Equitable, American General Life and Allstate. Nisenson started his career in financial services in 1995 as a financial adviser.

Nisenson received his BA from Rutgers University and attended the Global Executive Leadership Program at the Tuck School of Business at Dartmouth from 2018-2019. He serves on the board of directors for the Rutgers School of Design Thinking and is a public advocate and speaker on the caregiving dilemma that affects millions of people.


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