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As population ages, new efforts to boost long-term care insurance are surfacing

But public and private sector plans face uphill climb amid rising costs

Sisters Kathleen Hanson (right) and Stacey Pimentel sat with a portrait of their late mother, Hazel Moore Hanson, in Hanson’s apartment in Lowell.Carlin Stiehl for The Boston Globe/Carlin Stiehl

Kathleen Hanson of Lowell knows all too well the financial shock tens of millions of older Americans and their families will eventually face: the crippling cost of “long-term care” — services provided at home or in skilled nursing facilities — for those who need help with everyday activities like dressing, bathing, and cutting up their food.

Her mother Hazel, who had dementia, died last May at the age of 81 in a Methuen memory care home. For years, as they worried about her decline, Hanson and her sister Stacey burned through nearly all of the $300,000 that Hazel and their father James, an Air Force veteran who died in 1999, had set aside to cover late-in-life expenses.


“The cost is unbearable for families,” said Hanson. “I don’t think most people have any idea of the cost of a month at a care facility. We were afraid we were going to run out of money before our mother died.”

Attempts to offset surging long-term care costs for families like Hanson’s have been stalled for decades. But now, with an estimated 10,000 of the nation’s baby boomers turning 65 every day, new efforts are surfacing in Massachusetts and beyond to avert a looming crisis that threatens to drain seniors’ bank accounts, and their children’s inheritance, while bankrupting Medicaid programs across the country.

Some state and federal lawmakers, who’ve avoided the issue for years, are taking a fresh interest.

On Beacon Hill, a new bill filed in the House of Representatives would establish a commission to study the prospect of a Massachusetts long-term care insurance pool. Washington state has approved a similar program, using paycheck withholdings to build up a fund that would help defray late-in-life costs, though it has yet to launch. At least 10 other states are considering their own programs.


In Congress, in the face of continuing gridlock, advocates are working to revive legislation introduced last session that would also use a payroll deduction — akin to the money now withheld for Social Security — to create a national insurance fund bankrolling personal assistance for older Americans aging in their homes.

And though long-term care proved to be a disaster for many private insurers in the early 2000s — Boston-based John Hancock Financial lost millions in claims before exiting the market in 2016 — at least one new company thinks it can make a viable business by using innovation to expand the ranks of the insured and help address this coverage void.

Assured Allies, a Needham startup, has raised $65 million in venture capital to deploy artificial intelligence and wellness metrics developed by Israeli data scientists to help underwriters offer long-term care coverage to larger numbers of Americans — not just the young and healthy — through a broader range of plans that let people choose how much coverage they can afford.

The company seeks to design “proactive wellness” plans, integrating diet, fitness, and social support, to help seniors live independently longer before needing nursing or at-home care. That will also help insurers make faster decisions on policy applications by more accurately assessing who is likely to stay healthy longer.

“We believe we can make long-term care insurance accessible to everyone,” said Larry Nisenson, chief growth officer at Assured Allies.

Fewer than 10 percent of older adults have long-term care insurance, despite the potentially catastrophic financial risk of going without it. There are about 6.3 million insured Americans, including fewer than 175,000 in Massachusetts, according to 2020 data from the National Association of Insurance Commissioners. And for those who want it, coverage is getting more expensive and harder to obtain.


Part of the problem is availability. Dozens of insurers that once sold new long-term care plans have stopped, spooked by the prospect of paying out claims over longer periods as lifespans increase. A larger problem is cost. Premiums for policies that are available vary widely, depending on when they were written and factors such as age, gender, and health. But they can cost thousands of dollars a month for “lifetime” coverage that pays claims for an unlimited period.

Long-term care insurance today is “out of the reach of most middle-income Americans,” said Marc Cohen, a gerontology professor and researcher at the University of Massachusetts Boston. “Many people don’t understand their full exposure to the [financial] risk.”

Even so, the political urgency to establish a long-term care system has never hit a critical point, and lawmakers are overwhelmed by other spending priorities, including the need to shore up the shrinking Social Security trust fund. Their constituencies have also never really demanded it because, some experts say, many ordinary people avoid thinking about the day when they might need assistance getting out of bed or going to the bathroom.

“It is absolute denial,” said Bill Arnone, chief executive of the National Academy of Social Insurance, a nonprofit advocacy group. “People say, ‘I won’t ever be in that position, [so] don’t talk to me about it.’”


Whether the private sector alone can solve the problem is a key question. Long-term care insurers provide the most favorable terms to younger applicants, who can pay premiums for years before they make a claim — not to the vulnerable older population, those most in need of care.

State Representative Tom Stanley, Democrat of Waltham, who filed the House bill to create a special commission, said he worries about those people especially.

“It’s very clear that people are living longer and they can’t afford the care that’s necessary,” Stanley said. “It’s devastating families. I hear the stories all the time from constituents who are begging for help. They don’t want to lose whatever money they’ve built up to pass on to family members.”

Stanley and state Senator Pat Jehlen, Democrat of Somerville, who co-chairs the Joint Committee on Elder Affairs, have proposed spending $500,000 on an actuarial study looking in part at how to finance long-term care support and services. While some states are planning to create insurance funds, others are exploring measures such as providing stipends to family caregivers and boosting pay for long-term care workers to make wages competitive.

It’s not yet clear what approach Governor Maura Healey wants to pursue. In an interview last month, Healey said she was open to an initiative to ease the cost burden but stopped short of committing to a state insurance pool. “The current long-term care model is unsustainable,” she said. “We have to come at this differently.”


Many developed countries in Europe and some in Asia have mandated long-term care insurance, often financed through payroll deductions that are partially matched by employers. The oldest program, in the Netherlands, was introduced in 1968, when members of the nation’s post-World War II baby boom were young.

By contrast, Americans must navigate a long-term care system described in report by the National Academies of Sciences last year as “ineffective, inefficient, [and] fragmented.” Medicare, the federal program that insures older Americans, doesn’t cover long-term care. The wealthiest can afford quality care; those with less means must spend down their savings to get a Medicaid-funded nursing home bed.

The experience of the Obama years underscores the challenges of enacting long-term care legislation. Affordable Care Act architects backed a companion measure — also signed into law in 2010 — creating a federal insurance program. But because participation was voluntary, few young and healthy employees would contribute. The plan was ultimately deemed unworkable and repealed by Congress in 2013.

A push to resurrect a national program gained traction in the last session of Congress when then-Representative Thomas Suozzi of New York submitted a bill to create a long-term care fund. That bill failed to advance, and Suozzi stepped down from the House last year.

Now senior advocates are scrambling to find new sponsors. For a federal program to succeed, it will have to be underpinned by mandatory contributions to assure a robust insurance pool, said elder care consultant Joanne Lynn, a professor at George Washington University who helped craft the Suozzi bill.

But it looks to be an uphill climb because long-term care insurance lacks bipartisan support in Congress. It isn’t seen as the kind of hot-button issue, like gun violence or climate change, that draws a public clamor.

“We have to be able to think 30 to 50 years into the future,” Lynn said. “It’s hard to get Americans to think more than two or three years.”

Robert Weisman can be reached at robert.weisman@globe.com.