“Formal Cost of Care,” by Stephen D. Forman, LTCA Weekly Reader
“Formal Cost of Care: Price Waterhouse Cooper analyzed 223,963 claims worth $14.8B of payments from carriers representing 72% of the inforce population to produce the report: “Formal Cost of Long-Term Care Services.” It concludes the average lifetime cost of formal care (i.e., excluding informal services) is $172,000. As you can see from Figure 4, a quarter of the time, the cost is less than $26,000, while another quarter of the time it’s over $240,000, and there’s a 5% chance of exceeding $578,000. In Figure 5, we see that the largest cohort of policyholders incur claims under $50,000 (this is supported by Figure 7, not shown, which reports that 49% of claims are 1-yr or less). Should you download the 29-pg report, you’ll find that males average 2.5 yrs on claim, while females average 3.4 yrs— but 16% of women and 9% of men outlive their benefits. Meanwhile, non-cognitive claims average $140,000, while cognitive claims cost much more: $216,000 (and last 1 yr longer). There’s more stuffed into this brief report than I can share here, but you should consider the PwC stats the most current on the subject.”
LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform): Thanks to Steve Forman of Center-corporate-member LTCA for this excellent summary of the PWC findings.