The Emergence of Caregiver Benefits
The coverage gap between private and public sector long-term care.
The number of people ages 85 and older is projected to double within the next 20 years, while the number of Americans living with Alzheimer's disease and related dementias is expected to double as well, to 13 million. As the aging population increases, so too does the prevalence for chronic diseases more commonly associated with older individuals.
HCG Secure, a long-term care and home healthcare product designer, partnered with the Arctos Foundation and AtotheZ Marketing to survey 40-64-year olds in households making between $75,000-150,000 to measure their preparedness to both care for a family member and to financially plan for their own futures. Tom Beauregard, CEO of HCG Secure, discusses their findings and what can be done to engage those nearing Medicare eligibility in planning for their future financial and caregiving situations.
Q
Why did you decide to target the 40-64-year-old age bracket? What are some survey results that stuck out to you?
A
Nearly half of all U.S. employees have caregiver responsibilities, which results in productivity, financial, mental health and other impacts on workers and their employers. Those factors cost employers over $17 billion, or $2,441 per employee, each year.
We wanted to explore the population that is still in the workforce or recently retired, but not yet Medicare-eligible to test the hypothesis that people are often unaware of what exactly is covered under Medicare, especially when it comes to long-term care needs.
Survey responses both confirmed our theory and illuminated some darker truths: The majority of respondents were unaware Medicare does not cover assistance with daily living activities and when asked to estimate the cost of such care, respondents, on average, underestimated costs by $20,000. We also found a lack of preparedness beyond costs, with most respondents expecting the majority of their care to be administered by a family member; despite the fact this same subsect has not had any conversations with family members about wishes for care or for how such care will be financed.
Q
The survey you conducted concludes that many middle-aged individuals in the middle-income bracket are ill-prepared to handle any long-term care needs. According to Jellyvision, a benefits communication platform, any kind of benefits communication fails to prompt action 66% of the time. How do you work with employers to encourage people to take concrete steps to begin to plan for the future care needs?
A
Our policyholder platform is interactive and focused on consistent engagement. With the Total Well-Being Assessment, policyholders track their personal scores annually in the areas of life, health and money. Tracking their information in this way creates a consistent view of their social, medical, and financial history. That level of context allows for more personalized advice. For example, an individual who scores poorly in the health subsection of this assessment is offered real-time recommendations for both immediate action, such as scheduling an appointment with their primary care doctor or sourcing community support groups; as well as longer-term support, such as outlining the steps to start a financial plan. Individuals also have access to concierge care coordination services and a dedicated advocate to guide them through the health system.
Q
How will this research guide product development at HCG Secure?
A
We have been following voluntary benefits trends and the next big thing seems to be ‘caregiver benefits.’
Our research gives these employees and the financial and emotional burdens they face additional color and detail. Respondents with experience caring for an aging parent were more likely to anticipate a need for long-term care services and support and more likely to have had discussions about care wishes with loved ones; yet they were no more likely to have taken concrete steps toward a long-term care plan and financing care.
In a series of one-on-one interviews conducted following this survey, we were able to sit down with 10 of these respondents who indicated experience as a family caregiver. Across these interviews similar themes emerged: Individuals discussed a period of crisis, each of them having faced a medical or family emergency which catalyzed the rapid decline of a loved one. Despite descriptions of the sudden and unexpected, many individuals fail to connect the experiences of their parents to themselves, citing “good genes” and young age as reasons to put off planning.
Many of these individuals also remarked they have too few options. The high price tags of long-term care plans are out of reach, and they know they cannot finance care out-of-pocket.
The most cited piece of advice among those with caregiving experience was to prioritize planning. Seeing this inspired our team to further build out the navigation and planning resources available with all HCG Secure policies. We recently entered a partnership with Trust & Will, so our members can now afford a discounted option for getting estate plans, powers of attorney, and other care documentation plans in place.
Q
The care coordination you provide access to—including sourcing in-home care, coordinating meals and transportation and access to legal and financial support—produces a unique snapshot of an aging individual and their family. Do you have plans to use this data beyond providing an individual with a well-being assessment?
A
Data collected through the Total Well-Being Assessment is shared only with the policyholder to provide targeted retirement and long-term care preparation support over time. We do, however, monitor the use of each of our resources and tools. This usage data allows us to determine how much value our policyholders gain from these non-insurance benefits. With this data, we added new services, such as will and trust-based estate planning to offer a more holistic long-term care benefit.
Q
The federal Community Living Assistance Services and Supports Act (CLASS Act), which was part of the Affordable Care Act, created a voluntary long-term care buy-in program, but it was never implemented because of concerns it wouldn't be financially sound. Would HCG consider participating in or helping to facilitate this type of program? Is there an appetite for something like this?
A
There is absolutely an appetite for greater federal and state support and implementation of long-term care programs. We’ve seen, both in the federal CLASS Act as well as in Washington state’s long-term care payroll tax that such programs face both financial and political obstacles, but we also know 70% of those who are 65 years of age and older will need long-term care, while only 10% have LTC plans in place. HCG Secure would be eager to partner with the federal or state governments to facilitate a program geared towards increasing long-term care accessibility. We have seen with Medicare Advantage how public sector support for valuable private sector solutions benefits the consumer and expands access to care. Something similar can and should be done in the realm of long-term care insurance, especially given the rapid aging of the U.S. population and the apparent gaps in coverage for retirees and elders.
