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Proactive Employer Action is Needed
The Problem
2021 Legislative Action on Addressing the Exploding CMS Long-Term Care Expenditures
But why all the activity now? There are a few core reasons, but mostly that COVID – 19 has really shown a spot light on Long Term Care and LTSS. The vulnerability of the aging population in institutional facilities became tragic front page news. This combined with the increasing demand on budgets, lawmakers are looking for solutions.
• 15 States with Bills (California, New York and Pennsylvania are the most visible states)
• State Medicaid funds allocated for long-term care being eroded with double digit increases each year due to increased utilization.
• In 2020, $318 billion dollars was spent on long-term care in the US. CMS paid 64% of the total dollars spent.
Major Concerns for Americans
Current & Future Cost of Long-Term Care
• Consideration and planning needs to start much earlier to keep pace with inflation
• Employer subsidized or voluntary plans will play a major part with LTC planning
1 Based on annual rate divided by 12 months (assumes 44 hours per week)
2 Based on annual rate divided by 12 months
3 As reported, monthly rate, private, one bedroom
* Estimates how much care might cost in future years based on 3% annual inflation
https://www.genworth.com/aging-and-you/finances/cost-of-care.html
Group Hybrid Life Insurance (Dual Purpose)
Why the shift?
• No use it or lose it benefit. One or both benefits will be used.
• Employers that contribute/subsidize have fixed costs.
• No claim related premium increases for employers/employees.
• Existing coverage waivers could reduce/eliminate State Program Payroll taxes.
