U.S. Short-term Care Insurance Market

U.S. Short-term Care Insurance Market Outlook (2023 to 2033)

The U.S. short-term care insurance market was valued at US$ 41.1 billion in 2022 and is projected to reach US$ 110.1 billion by the end of 2033, expanding at a CAGR of 9.6% over the decade.

Short-term care insurance is a type of insurance that provides coverage for a limited period, typically up to 12 months, to help individuals pay for care when they are unable to perform some activities of daily living (ADLs) due to an illness, injury, or disability. Short-term care insurance policies generally cover a range of services, such as in-home care, adult day care, and assisted living facilities, and may also cover some medical expenses.

The deductibles for temporary health insurance are typically higher. A majority of temporary health insurance policies are non-renewable, and the most popular short-term health insurance plans often have a duration of six months or less. To prolong their short-term health insurance coverage, a person must reapply.

The United States accounted for 19.1% share of the global short-term care insurance market in 2022.

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What are the Factors Influencing the Growth of the U.S. Short-term Care Insurance Market?

“High Long-term Care Insurance Premiums Driving Demand for More Affordable Short-Term Care Insurance Plans”

Insurance companies, both big and small, offer short-term care insurance policies to consumers. In response to the increasing demand for short-term care insurance coverage, several leading long-term care insurance providers have begun offering such policies as well.

In terms of supply trends, there has been a significant increase in the number of insurers offering short-term care insurance policies in recent years. This has led to greater competition in the market, which has resulted in more choices for consumers and more affordable premiums.

With the aging of the baby boomer generation, demand for short-term care insurance is expected to continue to grow. This is likely to lead to further expansion in the supply of short-term care insurance policies in the coming years.

• In September 2021, Cigna announced the launch of a new STCI product called Cigna Supplemental Health Short-Term Recovery Care. The policy provides coverage for in-home or facility-based short-term care services, with benefit periods ranging from 30 to 360 days.
• In March 2021, Mutual of Omaha announced a partnership with the telehealth company Amwell to provide STCI policyholders with access to virtual healthcare services. The partnership aims to improve healthcare access and convenience for STCI policyholders.

“Growing Aging Population Driving Up Demand for Short-Term Care Insurance Products”

Increasing aging population in the United States will boost the short-term care insurance market. Short-term care insurance policies typically provide coverage for nursing home care, home health care, and assisted living services for a limited period, typically up to one year.

As the population in the United States ages, demand for these types of services is likely to increase. Short-term care insurance can provide a way for individuals to finance these services without having to rely solely on their savings. Growing aging population in the United States will likely lead to increased demand for short-term care insurance products, as individuals seek ways to finance their long-term care needs.

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Category-wise Insights

Which Distribution Channel Accounts for High Sales of Short-term Care Insurance Plans?

“High Sales of STCI Products through Brokers/Agents Due to Their Expertise in Insurance Policies and Capability to Customize Policies”

Brokers/agents play a crucial role in boosting the U.S. short-term care insurance (STCI) market. Brokers/agents are insurance professionals who work as intermediaries between insurers and customers. They can help customers navigate the complex insurance landscape and find the right policy that meets their needs.

Brokers/agents have a deep understanding of the insurance industry and can provide expert advice to customers. They can explain the nuances of STCI policies and help customers understand the benefits and limitations of each option. Brokers/agents can customize STCI policies to meet the specific needs of their clients. They can tailor policies based on factors such as age, health status, and budget.

Brokers/agents can be valuable as they provide expertise, customization, convenience, cost savings, and market expansion. This distribution channel is expected to dominate the market with a 40% share in terms of revenue in 2023.

How are Preferred Provider Organizations (PPOs) Influencing the Short-term Care Insurance Space?

“Preferred Provider Organizations (PPOs) Offer High Flexibility and Cost-effectiveness”

Preferred provider organizations (PPOs) are a type of managed care health insurance plan that offers customers increased flexibility in choosing healthcare providers from a network of preferred providers. PPOs negotiate lower rates with preferred providers, which can result in cost savings for customers. This increased flexibility and cost savings offered by PPOs are influencing the U.S. short-term care insurance (STCI) market.

The flexibility and cost savings offered by PPOs are driving increased demand for STCI policies that are compatible with PPOs. Customers who opt for STCI policies that are compatible with PPOs can choose from a wide range of providers within the PPO network, which widens their options and can potentially reduce costs.

STCI policies that are compatible with PPOs can offer lower premiums compared to policies that are not compatible with managed care plans like PPOs. This can make STCI policies more affordable and accessible to a wider range of customers. The preferred provider organizations (PPOs) segment is projected to expand at a strong CAGR of 9.4% over the forecast period.

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Competitive Landscape

The insurance industry in the United States is prioritizing collaboration with other companies in the sector to enhance insurance services and introduce cost-effective plans to attract more customers. This trend is evident in recent developments:

• Aon, an insurance brokerage firm, acquired Willis Towers Watson, another brokerage firm, in August 2021. This merger is expected to have an impact on the market and create one of the world's largest insurance brokerages.
• In July 2021, AIG partnered with healthcare technology company Medalogix to provide STCI policyholders with care management tools and services to improve health outcomes and reduce costs.
• In 2020, National Guardian Life Insurance Company (NGL) launched Essential LTC, a new short-term care insurance policy that offers a range of benefit options and riders for customized coverage.
• Aetna, a subsidiary of CVS Health, acquired Genworth Financial's Medicare Supplement business in 2019, which included short-term care insurance policies.

Recent developments related to key players providing short-term care insurance solutions in the U.S. have been tracked by the analysts at Persistence Market Research, which will be accessible in the full report.

Zaid Sheikh
Client Partner

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U.S. Short-term Care Insurance Industry Report Scope

Key Segments of U.S. Short-term Care Insurance Industry Research

By Distribution Channel:

• Direct Sales
• Brokers/Agents
• Banks
• Others

By Age Group:

• Senior Citizens
• Adults
• Minors

By Type of Plan:

• Preferred Provider Organizations (PPOs)
• Point of Service (POS)
• Health Maintenance Organizations (HMOs)
• Exclusive Provider Organizations (EPOs)

By End User Type:

• Groups
• Individuals