From expanded leave to telemedicine services and insurtech apps, a range of insurance innovations are emerging to address an urgent need of an overburdened and shrinking pool of unpaid caregivers for the elderly. Insurers have a unique opportunity to help bridge this critical care gap, suggests RGA's Diana Bosworth.
COVID-19 has highlighted a growing toll on caregivers for the elderly – and an expanding opportunity for insurers
Globally, the “support ratio”, or quantity of available caregivers to each senior requiring care, has reached record lows due to long-term demographic shifts. In many nations, citizens aged 65 or older are on track to outnumber those under age 18, and every day another 6,000 people take on a caring responsibility – a total of more than 2 million people each year.
Support services for caregivers could find a highly receptive – and underserved – market. In 2017 in the United States alone, about 41 million unpaid family caregivers provided 34 billion hours of care to an adult experiencing limitations in daily activities at any given point in time1. This burden falls disproportionately on children of seniors, who often must balance work and family obligations with duties such as transporting the senior to doctors’ appointments.
Research suggests caring for older family members can exact a mental and financial toll, with one survey indicating that 77% of respondents missed work and 62% used savings to pay for care2. In the State of Caring 2018 Survey3 by Carers UK, 72% of respondents reported mental illness as a result of caring, and a review of studies suggests about one-fourth to one-half of caregivers meet the diagnostic criteria for depression4. Family caregivers are also now in worse health than they were five years ago, and the ongoing pandemic has only heightened the need for support.
See also: Ending the Sandwich Generation Squeeze
The potential for caregiving support services is significant. According to the Caregiving in the US5 report, the population of unpaid caregivers has risen from 43.5 million in 2015 to 53 million in 2020: This amounts to nearly one in five adults providing unpaid care to an adult with a health or functional need. The estimated economic value of these unpaid contributions was approximately $470 billion in the U.S., according to the AARP2. Yet caregiving benefits are typically only a small piece of an employer’s benefits package. As stated by the Society for Human Resource Management6, only 2% of employers offer backup eldercare coverage or services.
There are signs of a shift, however, as insurers increasingly seek to expand into this underserved market by offering additional coverage options. For example:
This shift is not limited to insurers. In fact, the unique threat COVID-19 poses to the elderly may be accelerating an expansion of employer-sponsored caregiver benefits. One insurer recently increased its existing backup care benefit from $65 to $100 per day, per dependent. The allowance can be used to pay individuals of the associates' choosing, including family members who provide backup care. Another insurer has partnered with Compassion Society Benefits, Inc. to introduce a Caregiver Family Leave (CFL) insurance, a stand-alone group paid leave plan for caregivers available as either an employer-paid benefit or on a voluntary basis. The coverage option provides up to 80% income replacement for an employee with a caregiving need requiring an extended or intermittent leave from work. Another offering from a large multinational provides caregivers with 35 hours a year for planned paid leave and an additional 35 hours for emergencies, as well as the same entitlement to unpaid leave as parents with dependent children.
Disability coverage has emerged as another area of innovation. A Canadian carrier is launching a new rider for its disability insurance to help consumers balance their workplace and caregiver responsibilities. The new Family Compassionate Care Rider (FCCR) is an option for select disability plans.
Telemedicine and homecare services are also proving popular, with insurers forging new partnerships to add benefits. A U.K. insurer provides Nurse Support Services, a telephone-based case management service that includes emotional and practical support for caregivers. A multinational insurer in its Later Life Options plan6 has teamed up with SuperCarers to give clients and their family access to care advice and discounts. Similarly, a major Asia-based insurer partnered with Caregiver Asia to offer on-demand homecare services to employees as part of regular staff benefits. Through a wellness platform, employees can select and schedule homecare services such as home nursing, therapy, babysitting, post pregnancy confinement, companionship, and medical escorting services for themselves and immediate family members.
Some employers are partnering directly with caregiving providers. As part of its Well-Being Program in partnership with Homethrive, law firm Greensfelder offers employees a fully covered family caregiver service benefit with bespoke coaching and concierge services for aging homebound relatives. Similarly, telecommunications giant CenturyLink, Inc. has partnered with Care.com, an online marketplace for finding and managing family care, to provide an umbrella of services.
See also: Aging: The Trillion-Dollar Opportunity
See also: Community Connected: New Technology Addresses the Challenge of an Aging World
From expanded leave to telemedicine services and insurtech apps, a range of insurance innovations are emerging to address an urgent need. As many of the homebound elderly are not self-sufficient and are reliant on an overburdened and shrinking pool of unpaid caregivers, insurers have a unique opportunity to help bridge this critical care gap.
