Private long-term care insurance got a nice boost from a new study by the federal Department of Health and Human Services. The report, by the consulting firm LifePlans Inc, concluded that nearly 98 percent of those filing claims against their LTC policies received benefits, despite articles by The New York Times and others suggesting that claims denials are widespread. The study also showed the insurance helped many frail elderly receive the care services they needed.  

The researchers observed nearly 1500 long-term care policyholders over a period of 2 1/2 years, all of whom had either made claims or said they were about to. One important caveat: the report studied seniors claims history only from 2003 to 2007.

About two-thirds of those studied were receiving care at home– 37 percent used paid assistance, while 26 percent did not, even though insurance may have funded outside help. This may have been because these seniors had limited insurance coverage and wanted to preserve benefits until they needed more help.

About 23 percent of this insured population resided in assisted living facilities, and only about 14 percent in nursing homes. The share of those in assisted living was noticeably higher than among the frail elderly as a whole, often estimated at less than 10 percent.One possible reason is that Medicaid, which pays for more than 40 percent of long-term care, rarely pays for assisted living and, when it does, only finances care and not room and board. Thus those using insurance to “private pay” seem more likely to be residing in assisted living facilities.  

While some researchers have concluded that the frail elderly often move from home to assisted living to skilled nursing facilities as their care needs grow, this study found relatively little movement. For the most part, those who started the 2 1/2 year period living at home stayed there, and so did those in assisted living facilities. By contrast, a large percentage of those who were in nursing homes at the beginning of the study either died or moved to a lower level of care.