Many of the changes and new rules associated with health insurance as part of the “Affordable Care Act” (Obamacare) will only take effect over the next year or two. One of those new rules prohibits most health insurance providers from making premium pricing decisions based on one’s gender. However, those rules do not apply to companies that provide long-term care insurance.
Therefore it does not come as a huge surprise that the nation’s largest provider of such insurance–Genworth Financial–announced that they will soon being change rate plans to account for the fact that women are more likely to need paid long-term care. According to a Washington Post story, women seeking such insurance on their own will likely see anywhere from a twenty to forty percent increases in yearly long-term care insurance payments. Importantly, the change will only affect new policyholders, as current members should not be affected. Observers note that other long-term care insurance providers will likely follow suit.
The policy change was made, say the company, because of the fact that over ⅔ of all claims on the insurance are made by women. In order to stabilize prices, the company claims that the premium rates needed to better reflect the risk and ultimate need for long-term care. The increased claims by women are likely a product of the fact that they generally live longer and provide care to their own spouses. Men are far likelier to avoid having to make claims on the insurance because their health declines sooner and their spouse often provides care. Elderly women, however, often come to need support after their spouse has passed, and they do not have the luxury of receiving free care from a relative.
Long-term care insurance remains a critical tool for all families planning for the future. As our legal team often explains, one huge benefit of this insurance is that it makes it more likely that one will be able to “age in place,” receiving care at-home without the need to move to an assisted living facility or traditional nursing home.
Some observers are worried that the change may have detrimental effects on access to long-term care. For example, one policy analyst explained that while the rate change is obviously good for the insurance companies, it is bad for women and as a public policy matter. The less individual residents secure long-term care coverage on their own, the more likely they will rely on public programs like Medicaid for the support needed. With budgets at the state and federal level obviously stretched to the bone, this is an unwelcome development.
If you have questions about securing long-term care in our area or otherwise ensuring access to necessary support in old age, please contact our New York elder law attorneys for guidance.