Although the term long-term care (LTC), has been clearly defined for several decades, consumers, insurance agents and others in the industry continue to be confused by the basic definition, leading to myths and misconceptions regarding services and financing.
Long-term care encompasses the organization, delivery and financing of a broad range of services and assistance to people who are severely limited in their ability to function independently on a daily basis over a relatively long period of time.
Functional dependency can result from either physical or mental limitations and is defined in terms of the inability to perform essential Activities of Daily Living (ADLs), including:
In addition, long-term care is also associated with our ability to perform activities necessary to remain independent, known as Instrumental Activities of Daily Living (IADLs), such as:
- Ability to use the Telephone
- Food Preparation
- Managing Transportation
- Managing Medications
- Ability to handle finances
A major reason for some of the confusion is the absence of an accepted definition of “a relatively long period of time.”
National Long-Term Care Surveys conducted as long ago as 1982 and 1984 defined chronically disabled elderly as those whose limitations had persisted or were expected to persist for at least 90 days.
One of the reasons for the confusion can be found in the genesis of Long-Term Care Insurance.
CNA Insurance offered the first LTC Insurance product in the late 1960’s, primarily as a limited skilled nursing home insurance policy that was designed to supplement the post-acute care provided in nursing homes that was not paid by Medicare.
In 1974, Fireman’s Fund American Life (which became AMEX Life and is now Genworth), offered the first nursing home policy designed to provide benefits for long-term care rather than post-acute care.
These two companies spent over a decade with an innovative product idea, but few insurance agents or consumers had even heard of long-term care. By the mid-1980’s, barely 30,000 policies had been sold.
As the industry reached the mid-point of its second decade, it became easier to explain what long-term care was NOT rather than what it was:
- It is not medical care
- It’s not provided in a hospital
- It is not intended to cure a disease
- It is generally not provided by doctors, registered nurses or other skilled medical professionals
By the late 1980’s, the 90 day definition became more entrenched throughout the industry. That didn’t stop people from being confused, as agents instilled fear in consumers by presenting grave statistics on their increasing chances of spending time in a nursing home.
They conveniently left out the large numbers of people who entered a nursing home for post-acute care after a hospital stay, with no mention of the fact that many would leave the nursing home far sooner than 90 days.
More than 25 years later, those sales tactics are still used by agents who lack the deep understanding of the industry’s history or perhaps even fail to grasp the essential definition of long-term care.
As legendary football coach Vince Lombardi would say, “We’re going to start with the fundamentals. Gentlemen, this is a football.”
We would all be wise to start with the fundamentals ourselves. “Ladies and Gentlemen, this is the definition of long-term care … and don’t leave out the importance of 90 days!”