Two simultaneous trends are creating a significant market opportunity for independent insurance agents: the desire to receive health care at home, and the U.S. government’s mandate for hospitals to reduce patient admission and length of stay.

As a result, more people will likely “age in place”—live in their homes for as long as possible—rather than relocate to an assisted living or other aging services facility.

According to the U.S. Census Bureau, the number of individuals age 85 and older will increase from about 14% of the older population today to 21% in 2050. One in four 65-year-olds can expect to live past age 90, and one in 10 65-year-olds can expect to reach age 95. Notably, 80% of adults age 65 and older remain at home; most members of the aging population would prefer to have health care services provided there.

“Government payments through Medicare and Medicaid are shifting from more expensive hospital services to in-home services,” says Alice Epstein, risk control leader, CNA Allied Healthcare Facilities. 

“The Centers for Medicare & Medicaid Services (CMS) is pressuring hospitals to contain costs, and it is simply less expensive for the government to pay for health care services delivered in the home than in a hospital,” adds Maureen Maughan, assistant vice president and industry leader, CNA Allied Healthcare.  “Since many people prefer to ‘age in place,’ this is creating a great demand for a variety of home health care services.”

According to a newly released CMS analysis, home health care services are rapidly expanding.  Almost $103 billion will be spent on home health care in the U.S. this year, and that number will reach nearly $173 billion by 2026. The annual growth rate for home health care spending is predicted to be 6.7% by 2020—higher than any other health care category tracked.

There are 12,268 Medicare-certified home health agencies in addition to non-Medicare certified home health agencies. In 2017, approximately 1.46 million people were employed in home health care services in the U.S.—an increase from 959,000 employees 10 years earlier, according to Statista. By 2024, this number is expected to reach 2.3 million.

Home health care services are not provided solely by doctors and nurses. Patients also require diagnostic and therapeutic services, which are delivered in the allied health care facility setting.

“Government spending on allied health care is expected to increase by 5.5% annually, although many patients also may decide to pay out-of-pocket for some services,” Maughan says. “This industry, currently underserved by independent agents, represents a rapidly growing customer segment.”

The allied health care facility marketplace may experience a higher level of growth than current studies indicate. For example, a variety of new “smart” clinical diagnostic and monitoring tools for in-home care have entered the marketplace, enabling a greater number of allied health care services to be provided outside of the hospital setting. 

To encourage agents to consider the growth potential of the allied health care facilities market, CNA—which insures more than 50 classes of allied health care facilities—is offering an additional 2% commission above customary rates. “Getting in on the ground floor today can lead to potentially substantial business tomorrow,” Epstein says.