The Race to Modernize Long-Term Care Claims: Insurers Face a Make-or-Break Moment
A System Under Strain: The Perfect Storm for LTC Claims
The numbers paint a stark picture. By 2030, the U.S. Census Bureau estimates that 73 million baby boomers will be 65 or older, with long-term care needs rising sharply in parallel (U.S. Census Bureau, 2023). According to McKinsey & Company, LTC insurers are already struggling under the weight of increasing claims, with processing times averaging over 45 days—a timeframe that frustrates policyholders and inflates operational costs (McKinsey, 2023).
Regulatory complexity compounds the problem. With state-specific compliance requirements constantly evolving, insurers relying on legacy claims systems face higher regulatory risks, increased error rates, and costly penalties. Gartner reports that 85% of insurers cite compliance management as a top operational pain point—yet many still lack the automation needed to mitigate these risks effectively (Gartner, 2023).
Meanwhile, consumer expectations have shifted dramatically. The latest Aite-Novarica research shows that 80% of LTC policyholders prefer digital-first claims processing, yet fewer than 40% of insurers have implemented fully automated workflows (Aite-Novarica, 2023). The gap between what customers expect and what insurers deliver has never been wider.
Why Legacy Systems Are No Longer Sustainable
The reliance on manual workflows, paper-based invoicing, and outdated policy management tools creates bottlenecks that are no longer sustainable in today’s digital era. Industry analysts from Celent and the International Claims Association identify four key failure points in traditional LTC claims processing:
- Slow Payout Cycles – Policyholders wait an average of six weeks or more for claim resolutions (Celent, 2023).
- Rising Administrative Costs – Labor-intensive claims processing eats up 30-40% of operating budgets (Datos Insights, 2023).
- Compliance Risks – Without automated tracking, insurers face higher exposure to regulatory fines (International Claims Association, 2023).
- High Staff Turnover – Claims teams are stretched thin, leading to burnout and talent shortages (Claims Journal, 2023).
A senior analyst at Datos Insights summarizes the industry’s challenge:
“The LTC insurance market is at a breaking point. Without automation, insurers will struggle with efficiency, compliance, and customer satisfaction—all of which are critical to remaining competitive.”
Hypothetical Case Study: A Mid-Sized LTC Insurer’s Operational Challenges
Consider a mid-sized LTC insurance provider that, like many in the industry, has been relying on a decades-old claims system. Their team faces mounting challenges:
- Claim resolution times exceeding 45 days, frustrating policyholders and leading to an increase in customer complaints.
- A manual invoice processing backlog, delaying payments to caregivers and assisted living facilities.
- Regulatory compliance challenges, with frequent errors in state-specific filing requirements.
- Escalating operational costs, as hiring additional staff becomes the only way to keep up with growing claim volumes.
- Lack of seamless coordination, forcing insured individuals to navigate complex, manual processes when trying to file and manage claims.
These challenges are not unique. Many insurers face the same obstacles, making it clear that legacy claims management processes are no longer sustainable.
Enter Benekiva's Claims Automation Platform
For insurers struggling with these inefficiencies, a modern, AI-enabled claims platform like Benekiva could provide a comprehensive transformation. Designed to address key pain points in LTC claims processing, Benekiva offers:
- Seamless Coordination of the Insured to Go on Claim – Filing a claim for LTC benefits can be a complex, frustrating experience. Benekiva streamlines the process by providing intelligent intake forms, automated eligibility verification, and real-time status tracking. This ensures that policyholders and their families can easily initiate, track, and manage their claims without the confusion and delays of manual workflows.
- Automated Invoice Processing – Benekiva eliminates bottlenecks in invoice validation and payments by automatically verifying, categorizing, and processing invoices. This ensures timely reimbursement to care providers, assisted living facilities, and in-home caregivers while reducing administrative burdens for insurers.
- Accelerated Claims Resolution – Processing cycles could be shortened allowing insurers to deliver faster benefit payouts and improving policyholder satisfaction.
- Seamless Compliance Tracking – Automated adherence to state-specific LTC regulations could reduce compliance risks and mitigate potential penalties, ensuring insurers stay ahead of regulatory changes.
- Lower Operational Costs – A potential reduction in administrative expenses enabling insurers to scale their operations without the need for additional staff.
By digitizing and automating claims intake, invoice validation, and compliance tracking, Benekiva ensures a smoother experience for both policyholders and insurers—bridging the gap between legacy inefficiencies and modern expectations.
The Future of LTC Claims is Digital—And Time is Running Out
The LTC insurance market is on the brink of a fundamental shift. Insurers that modernize now will gain a competitive edge, offering faster, frictionless experiences that build long-term policyholder trust. Those that delay risk falling behind as digital-first providers set new industry standards.
The question isn’t if insurers should modernize—it’s how fast they can move to avoid being left behind.
Are you ready to future-proof your claims process?
Let’s talk.
Sources
- U.S. Census Bureau (2023). Aging Population Projections.
- McKinsey & Company (2023). Insurance Industry Trends and Challenges.
- Gartner (2023). Compliance Challenges in Long-Term Care Insurance.
- Aite-Novarica (2023). Consumer Preferences in Digital Claims Processing.
- Celent (2023). The State of LTC Insurance Technology.
- Datos Insights (2023). Operational Costs in Claims Management.
- International Claims Association (2023). Compliance and Automation in LTC.
- Claims Journal (2023). Workforce Challenges in Insurance Claims.
