Archives for February 2018

Previously, on Long Term Care Insurance Myths…

We have seen multiple examples of the press misrepresenting the current state of the Long Term Care insurance (LTCi) industry. In my last blog post (you can read it here), I called out a specific article in the Wall Street Journal (Jan 2018) that predicted the imminent downfall of the industry. They cited financial instability and unexpected rate hikes as the central culprits.

Multiple experts from the LTCi industry penned their objections, offering well-sourced facts. Like me, they were compelled to present a number of articles in response. The status of long term care insurance is not only financially stable, but also more popular than ever.

More Answers to Long Term Care Insurance Myths

This blog focuses on the response from my colleague, Steve Moses, President of the Center for Long Term Care Reform. Moses is a noted expert on both state and national levels.

In a letter addressed to the author of the WSJ article, Moses highlighted the glaring omission from the article: the dominant role that Medicaid plays in the long term care solution*. He reminds the author that government policy is central in determining the financial stability of long term care.

He concludes: “It is a tragedy to blame private insurers and the dedicated people who’ve tried to make the LTC insurance product work for problems caused by poor public policy. Blame the culprits, not the victims.”

As we’ve recently discussed, people who own long term care insurance (LTCi) have necessary funds and are far more likely to be able to avoid Medicaid, stay at home, or access quality assisted living if they need long term care.

Click here to receive your personal quote for Long Term Care Insurance.

---

*In his monograph, “How to Fix Long Term Care Financing” (July 2017), Moses explains:

In my almost 30 years as a Long Term Care insurance (LTCi) specialist, I have seen and shared multiple articles with you on the subject of faulty journalism. Some LTCi articles are more accurate than others. The press tends to have a negative view of long term care insurance. I work hard to help you sort the facts from fiction.

We know that negative news sells more papers. The press covers LTCi rate hikes in an often uninformed, inflammatory fashion, making it falsely appear that policyholders have no satisfactory in-between options. Journalists pretend to be expert financial advisors. This can lead policyholders to the conclusion they have no other option than to cancel their LTCi coverage. It discourages people who should and can afford LTCi premiums from considering it. Such non-factual, misinformed reporting has devastating results! We’ll talk about this in greater detail, later.

Here’s the other thing:  LTCi is a complicated product with a lot of moving parts. One cannot become an expert overnight. These journalists (even at the more respected publications), in their zeal to bring you the story, get a lot of the information wrong.

Long Term Care Insurance Myths

Let’s talk about those rate hikes.

In January 2018, the Wall Street Journal published an alarming article that essentially reported the implosion of the LTCi industry. The journalist predicted that the increasing financial instability of the industry was going to result in massive rate hikes, for which most aging policy holders were unprepared. The fear over looming rate hikes is one of the prevailing Long Term Care Insurance myths.

FACT:  It is almost never necessary to drop a LTCi policy due to a rate hike. We normally downgrade the policy instead, which lowers premiums while conserving high LTCi policy function.

FACT:  Inciting panic over these policies results in dissuading people from acquiring this important coverage. It gives them one more excuse to avoid responsible and reasonable long term care planning in advance.

My colleague, Matt McCann, wrote a thoughtful piece to address the rate stability and affordability of LTCi:

“An insurance company can not ask for increases on current product series policy holders based on the mistakes of the older plans. This provides substantial peace-of-mind for those who are planning today.

“It is also not easy to raise premiums; the insurance company must show a substantial need based on actuarial data and have it based on a class basis only.”

FACT:  The sale of LTCi policies is increasing. The real financial risk comes from lack of coverage, providing asset protection and peace of mind to families.  McCann adds, “It safeguards their retirement accounts… while making their aging issues much easier on their family.”

Matt McCann’s complete article can be found here.

There are a number of well-intentioned articles providing misinformation. We’ll be addressing more of these in future blogs. Stay tuned!

In the meantime, if you’d like to get a free quote for your own LTCi policy, click here.