A new issue brief from the American Academy of Actuaries applies actuarial expertise to provide an understanding of how COVID-19 could impact long-term care insurance (LTCI), including LTCI delivery, demand, and markets, as well as new public policy considerations.
“The elderly, who most benefit from long-term care services, have as a group experienced an outsized toll from the COVID-19 pandemic, adding to our sense of need to assess the pandemic’s consequences for long-term care insurance,” said Bruce Stahl, a member of the Academy’s Long-Term Care Reform Subcommittee, which authored Impact of COVID-19 on Long-Term Care Insurance. “Adjustments to underwriting and persistently low-interest rates are COVID-19-related impacts already clearly affecting LTCI. More time and experience will tell if there are other consequential effects, such as a shift from facility to home care settings, or increased care needs for COVID-19 survivors.”
COVID-19 could have other meaningful impacts on LTCI, including:
- Mortality and morbidity changes if they affect claim periods and/or claims incidence compared to what was previously expected.
- Changes in the demand/delivery for long-term care services such as the increased use of telehealth.
- Changes in policy lapse rates due to economic conditions or fear of infection in care settings.
- Delays in LTCI regulatory filings or approvals, and/or the introduction of charges or costs affecting insurer margins or insurer solvency of potential concern to regulators.
