NY Partnership Profiles Buyers
By Adrianna Takada, Ph.D. and Gregory J. Belardi, Ph.D.,
New York State Partnership for Long-Term Care, Albany, NY
A mail survey was conducted in 1995 to develop a profile of New York State Partnership purchasers, their reasons for purchase, and their opinions on the Partnership program. Surveys were mailed to all 5,373 active policyholders; 52% responded. The respondent's average age was 65. The Partnership seems to successfully target middle and upper-middle income people who cannot afford the high long-term care (LTC) cost, but who appear able to afford Partnership policies. More than two-thirds (69%) of the respondents indicated their household incomes are between $25,000 and $74,999. Two-thirds of the married purchasers reported their joint household assets (excluding the home) are more than $300,000 while 61% of the non-married respondent's own assets (excluding the home) are between $100,000 and $500,000. Almost 90% of the respondents own their homes.
The common characteristics of Partnership purchasers included: married (65%); retired (65%); highly educated (59% are college graduated, over half of whom received graduate education); and healthy (60% evaluated their health as "good" or "excellent").
Lifetime LTC coverage important to buyers
The three most important general reasons why the respondents considered LTC insurance were: asset protection, the ability to remain financially independent, and the cost of LTC. They also indicated the three most important considerations for purchasing Partnership LTC insurance: lifetime coverage (through the Medicaid link) with asset protection, the state's "seal of approval" represented by the Partnership logo, and the monitoring process for denied benefit authorization requests.
In the absence of the Partnership, 25% of the respondents indicated that they would transfer their assets and depend on Medicaid if they were to need LTC. Other responses (not mutually exclusive) included using their income and assets (72%), and purchasing a non-Partnership policy (21%).
Lack of affordability tops list for NTOs
The original survey pool contained 224 people who decided not to purchase policies during the free look period in 1995; 113 either could not be reached or refused to participate in the survey. About half (47%) of the 109 respondents listed "affordability" as the number one reason for dropping their policy. This was followed by misinformation or a lack of information on the Partnership provided by agents. One-tenth responded they decided not to purchase because their spouses were denied coverage.
One-tenth of the respondents indicated that they either had purchased or were considering the purchase of traditional LTC insurance because they thought such insurance would be more affordable, and would better meet their needs for income protection or nursing-home-only coverage.
Financial problems and non-Partnership plans result in lapses
Out of 324 purchasers surveyed who decided not to maintain policies after a free look period, 137 responded. Over one-half of the respondents lapsed their policies due to financial difficulties, while some had purchased non-Partnership policies instead. Other reasons given for lapses included dissuasions by lawyers and children, and misunderstanding the portability of private benefits of Partnership insurance coverage prior to the Medicaid Extended Coverage period.