Senator Herb Kohl, (D-Wis.), chairman of the
Bloomberg estimates that 12 million Americans will require such care by 2020. Pointing to recent losses reported by
Genworth points to peace of mind as a primary benefit to policyholders: “Long-term care insurance generally provides peace of mind to policyholders and their family in a time of shifting and uncertain economic burdens,” said Thomas Stinson, the president of insurance products for Genworth, based in Richmond, Virginia, in a prepared statement for his testimony at today’s hearing.
Genworth, one of the largest providers of long-term care insurance, had a first-quarter loss of $469 million compared with profit of $116 million a year earlier, reports Bloomberg.
Long-term care policies typically provide coverage to help pay for home-health aides or residence in a nursing home or assisted-living facility. Bloomberg reports figures from the Menlo Park, California-based Kaiser Family Foundation that state that insurers have sold about 10 million of the policies since 1987. Private insurance accounted for 9% of the almost $180 billion spent on long-term care services in 2006, said Kaiser, a nonprofit group focused on health-care policy.
States are encouraging residents to consider these programs, without weighing the plans’ consumer protections and companies’ financial solvency, said Kohl in his remarks. There were a total of 43 ratings downgrades to companies in the life/health insurance industry by AM Best Co. and the rating company downgraded its industry outlook to negative from stable in 2008.
A typical policy sold in 2008 cost $2,329 a year on average for a single 60-year-old person, according to Kaiser. If purchased at age 70, the same policy would cost $4,515 a year. Nursing home care averages $70,000 a year, assisted-living facilities average $35,000 a year and 24-hour home health service care averages $306,600 a year, Kaiser said.
