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Reaming Diane Rehm

June 22, 2012 by Honey 6 Comments

Believe-it-or-not, not everything you hear on the radio is true! I’ve just mailed the following letter to Diane Rehm, who recently aired a show on Long-Term Care insurance (LTCi) that contained many inaccuracies.

I’ve been specializing exclusively in sales and support of LTCi for over 22 years. Sadly, I can still only dream of the day that long-term care insurance will be truthfully and accurately covered by the media.

June 21, 2012

Dear Ms. Rehm:

I enjoy listening to your show whenever I can.

As an expert who has specialized in the placement of long-term care insurance (LTCi) policies for over 22 years, I took great interest in your May 29, 2012 program.

I have just listened to this show again online, this time isolating many inaccuracies.

Not a single one of your panelists represented the LTCi industry! One is a journalist, three are academics and or work at a non-profit. None are insurance licensed or have direct experience selling LTCi.

This was not a program on long-term care insurance. This show was about exploring how and why the government needs to pay for long-term care. This show could or should have more aptly been called “Options for Publicly Paid LTC” or “How to Fix Long-Term Care,” or “Why Publicly Paid LTC Needs Re-vamping.” This is Mr. Gleckman’s area of expertise and you spent a lot of on air time with him. Mr. Gleckman is unqualified to answer many of the questions you asked about LTCi, however, as were your other panelists.

I know how strongly you must feel about helping your listeners, but this program has hurt them. I understand this was inadvertent, but because your guests attempted to address questions they were unqualified to answer, LTCi was unfairly disparaged.

On the following pages I have identified just a few specific instances where false on-air statements and/or answers were given, resulting or the unwarranted disparagement of LTCi.

Your listeners deserve to know the truth about LTCi. Studies show that over 95% of all LTCi claims are paid and that LTCi policyholders are very satisfied at claim time. The reasons that claims are rejected are straightforward and should have been clearly explained to your listeners.

LTCi premiums do not have to be expensive. What can be expensive is needing LTC for a lengthy amount of time and not owning LTCi.

LTCi is about making sure that people have the dignity, options and choices they’ve been accustomed to throughout their entire life, including at the end of life, when the cost of healthcare is most likely to be catastrophically high. You did not emphasize this, yet this is what should have been highlighted. In addition, LTCi preserves wealth. Most people buy LTCi for the first reason and consider wealth preservation to be a secondary benefit. (This is why people with high net worth AND people with barely any net worth often buy LTCi.)

The primary reason why more people do not own LTCi is because they are simply unwilling to discuss or imagine a future in which they might require long-term care, not because premiums are high.

Mr. Gleckman’s goals for public LTC financing sound great in theory, but in light of practical issues like today’s political environment and huge budget shortfalls, LTCi policyholders do not and will not count on this. And neither should Americans without LTCi.

Currently, the majority of LTC in the USis paid for with government dollars. Few things in life are easier to demonstrate than the already inferior quality of government-paid nursing homes, and this is before the deluge of Baby Boomers starts overwhelming this system.

This program has hurt your listeners badly. You would do your listeners a true service if you would invite some guests who are actually experts on LTCi onto your program. I would be happy to help you identify such individuals.

Please see the following pages for examples of falsehoods aired on your program.

Sincerely,

Honey Leveen

Documentation of May 29, 2012 Diane Rehm Show LTCi disparagment

Minute 2:10

Ms Langford states that Lifetime benefits are “extraordinarily expensive,” which is false and disparaging of LTCi.

Minute 2:45

Ms. Langford states that built-in 5% compounding is what has driven recent Long-Term Care Insurance (LTCi) rate hikes. This is patently false. The primary reasons are: higher than anticipated persistency and artificially protracted, low interest rates on the sizeable reserves that insurance companies are required by law to maintain to cover claims. For more information on the causes of recent LTCi rate hikes, read the article National LTC Events, found at

http://archive.constantcontact.com/fs024/1102230271684/archive/1109959361711.html

Ms. Langford quotes the average cost of care as $238/day. This is the average cost of nursing home care. People who own LTCi are highly unlikely to receive care in nursing homes because LTCi enables them to afford preferable options like assisted living and home health care. However, people who do not own LTCi and spend down their life’s savings until they qualify for Medicaid will likely wind up in nursing homes. It is wrong to peg the average cost of care for a LTCi policyholder at $238/day.

Mr. A states that LTCi is for the relatively affluent, this is false.

Minute 4:38

Repeatedly, points are made about LTCi preserving wealth. LTCi is primarily about preserving dignity and options, then wealth. I did not hear discussion of how much choice LTCi offers at all. This was a very large omission.

Minute 5:00

LTCi is not just for the top 15%, it predominantly for the middle class, who are most exposed. Very affluent people, as well as those with little net worth, also purchase it. Virtually all my policy holders want to ensure their dignity by having options and to reduce and/or avoid family arguments about money. LTCi is a solution that can be reasonably priced for almost anyone insurable, if they willing to learn about it.

Minute 5:50

Ms. Langford states the Lifetime benefit periods have driven recent LTCi rate hikes. Again, consult the brief article National LTC Events at

http://archive.constantcontact.com/fs024/1102230271684/archive/1109959361711.html

for the correct explanation of recent rate hikes. Ms. Langford also stated that Lifetime benefit periods and 5% compounding have caused recent LTCi market contraction. The cause of LTCi market contraction is the same cause as the recent LTCi rate hikes: higher than anticipated persistency and artificially protracted, low interest rates.

Minute 6:40

The discussion was on nursing home care. This is not where most LTCi policyholders get their care. People who own LTCi can normally get care at home or in an assisted living facility.

Minute 7:20

Mention was made that LTCi premiums are too high for moderate income people. This is false! What a disservice to your listeners! The panelist further discourages purchase of LTCi by stating that it is not a product for the broad middle class. This is false. LTCi can be made very affordable. The conversation was steered towards the use of Medicaid for LTC provision. This is economically irrational and unsustainable, and what about the quality of Medicaid-paid LTC? What is your preference? To be marooned in a Medicaid LTC facility, or would you prefer to receive your LTC at home or in an assisted living facility? The quality of Medicaid-paid LTC is a subject that was simply not addressed by your panelists. Furthermore, they are unqualified to answer your in-depth questions about LTCi and came to you with a clear anti-LTCi bias.

Minute 20:00

There was discussion of the stability of LTCi carriers. If you’d had actual LTCi experts on, they would have explained how and why LTCi carriers are enormously stable, and in fact a lot more trustworthy and capable of paying for LTC than the government is. What a pity LTCi was again disparaged.

Minute 20:18

A comment was made about the “disarray” of the LTCi industry, I believe by you. This is an inflammatory, false, and disparaging comment. The LTCi industry is in a state of contraction, not disarray. This comment was not useful to the public who are eager to actually learn about LTCi. Instead, throughout this program, the public was dissuaded from carefully evaluating LTCi. This was a true disservice.

Minute 22:04

Mention of LTCi’s high cost was made. LTCi can be made very affordable. What’s not affordable is needing LTC for a lengthy amount of time and not owning LTCi. If your panelists were qualified to talk about LTCi, they would have said this.

Minute 30:50 and again at minute 51:40

There was discussion of “surprise” rate hikes. LTCi rate hikes are unusual. LTCi rate hikes are neither arbitrary nor easy to get, due to strict government regulation. Disclosure of the possibility and carriers history of rate hikes is made obvious in all LTCi sales materials. Agents are carefully trained to explain this possibility and can be sanctioned if they don’t. All clients should understand this can happen when they place their applications.

Long-Term Care Insurance is Good for America!

April 9, 2014 by Honey Leveen Leave a Comment

I want to share part of a powerful address that Tom McInerney delivered at the recent Society of Actuaries Long-Term Care Conference. His talk had great impact on me.

Mr. McInerney is the CEO of Genworth Financial, a leader in the long-term care insurance (LTCi) marketplace. He stated the federal government faces at least $40-70 trillion in entitlement liabilities (Medicare, Social Security and Medicaid). A 2009 GAO Report supports a $45 trillion number. A more recent Heritage Foundation report estimates $45 trillion for Social Security and Medicare alone. All three of these programs are “Pay-As-You-Go”, which means they need to be paid for through current payroll or income taxes.

Our current federal tax revenues are $2.7T per year (see CBO Report FY 2013 estimate). If you add $40 – 70 trillion of entitlement to our existing $17 trillion deficit, even a doubling of taxes, which would further slow our economy, wouldn’t put much of a dent on the public sector’s true liabilities of $60 – 80 trillion! To add to this dilemma, we currently have a ratio of fewer than three workers per retiree supporting Social Security. According to the Social Security Administration, this ratio gets worse every day.

Let me add that our legislators know that Medicare, Social Security, and Medicaid need reform urgently. But for their own reasons, neither party will broach this subject. I have blogged about this here and here. With each passing day, the entitlement crisis grows worse, and Mr. McInerney states that counseling that we should rely exclusively on a taxpayer-funded solution to pay for long-term care in the US is irresponsible. I don’t think it’s irresponsible. I think it is off-the-deep end unrealistic and irrational to believe publicly paid long-term care is possible! Yet such irrational, “feel good” solutions seem to prevail.

Here’s a blog that gives an example of the prevalence of such irrational points of view. It’s called “Reaming Diane Rehm“. During her show on long-term care, Diane Rehm paid most of her attention to a supporter of government paid long-term care. She did not have a single representative of the insurance industry on this show, yet plenty of time was spent smashing and bashing LTCi. I pointed out some of the many false and irrational statements made on this show in a professionally written letter I sent to Diane Rehm by surface mail and email; I never even got an acknowledgement from her or her staff.

Meanwhile, Americans haven’t saved enough to cover their long-term care costs. The private long-term care insurance market can’t cover everybody, but it can cover some of us. The more LTCi policies issued, the less pressure on Medicaid budgets and other entitlement spending in the future.

Jawboning De Rigeur, But of Little Use

November 26, 2013 by Honey Leveen Leave a Comment

Recent coverage of long-term care by the parent company of the Public Broadcasting System’s NewsHour, and the SCAN Foundation, caught my eye. (Watch below)

I want to thank Steve Moses, President of the Center for Long-Term Care Reform for bringing this story to my attention.

Steve has given me permission to re-publish portions of his blog, below. You will read how Steve pokes holes in the testimonies of some of the most reputable LTC experts in the country.

Before you read Steve’s comments, I wish to editorialize. All we ever seem to see covered in the news – whether it’s mainstream media reporting on long-term care or political posturing – is jawboning about the need for long-term care conversation, discussion, and planning. The words strewn by various LTC pundits appease and sound appealing, but they are without teeth. Nothing concrete is recommended for addressing the 5,000-pound elephant in the room, which is: how do we pay for long-term care presently and when we are deluged with a Silver Tsunami of Baby Boomers who are woefully unprepared to pay for their long-term care? The lack of solutions to this mounting dilemma is disheartening, frightening, and frustrating for my colleagues and me.

I am doubly disappointed when I see such insipid, superficial reporting from sources I normally have great respect for: PBS and NPR. Here’s a blog I did about comparably inept, superficial, inaccurate LTC reporting on the Diane Rehm Show on NPR: /2012/reaming-diane-rehm/

Here’s a blog I called Neither Party has a solution for the oncoming deluge of Medicare/Medicaid services. This blog describes why neither Republicans nor Democrats wish to broach the subject of long-term care planning. Another blog, entitled Dismal Outlook for Medicare, Social Security, also explains why it is a politically unsavory no-man’s land for either party to broach the subject of realistic long-term care financing. Here’s a blog I did titled National Commission on LTC Finds No Solutions for LTC Crisis. Here are the National Commission’s actual recommendations: http://www.ltccommission.senate.gov/recommendations.cfm. Read them, and you will see the same insipid jawboning and fluff as Steve describes in his comments below.

By the way, Steve, thanks for your acknowledgement and praise for my AMG (Altruistic, Masochistic, Genius) status! (Read Steve’s comments to learn about AMG’s.)

Here is Steve Moses’s critique of the recent LTC forum, titled “Global and Regional Models for Long-Term Care: Can They Work Nationally?“:

LTC BULLET: PBS’S 6 TIPS FOR LTC MISS THE MARK

LTC Comment: Millions watch the Public Broadcasting System’s NewsHour every night. So when that show addresses long-term care it’s worth paying attention.

You can read about and view videos from a forum, titled “Global and Regional Models for Long-Term Care: Can They Work Nationally?,” that MacNeil/Lehrer Productions (the NewsHour’s parent company) and the SCAN Foundation sponsored on Monday.

But if you have better things to do, such as advising consumers on how to protect themselves from LTC risks and costs without depending on tottering government programs, let me save you some time.

Following are quick summaries of PBS’s “6 tips for averting America’s looming long-term care crisis” followed by our critique of each.

PBS Tip #1: “Keep it Local” The Urban Institute’s Howard Gleckman says don’t seek a “single answer.” Rather work from the bottom up with friends, neighbors and families taking the lead. “To the degree that we can, government can at least try to stay out of the way of those solutions . . ..”

LTC Comment: Hear, hear! Finally something from this writer with which I can agree. But true to form, he reverts to form a few sentences later, advocating more and bigger government programs.

PBS Tip #2: “Change the Financing” Former CMS Administrator Dr. Mark McClellan, currently with the Brookings Institution, says “let people control how [Medicaid] money is spent on their behalf. That’s what’s behind our ‘Money Follows the Person’ [MFP] initiatives in states around the country . . ..”

LTC Comment: Terrific. MFP programs are a vast improvement over the current LTC financing system which makes providers–not patients–the program’s customers. But “Money Follows the Person” still depends on payments coming from an unsustainable welfare program. Making Medicaid more attractive to more people is not a solution.

PBS Tip #3: “Focus More on the Poor” Dr. E. Percil Stanford, president of Folding Voice and the KIND Corporation, says “Unfortunately, considerable [LTC policy] attention from the most well-intentioned institutions and organizations has focused primarily on the middle and upper classes.” Instead, he says, they should focus laser-like on the poor elderly.

LTC Comment: Right on, but how? No answer from this source. Research shows Medicaid’s LTC program benefits the middle-class and affluent as much or more than the poor. The solution is to target scarce public benefits to the needy and use some of the savings to incentivize early and responsible LTC planning by more prosperous people.

PBS Tip #4: “Build a Comprehensive National Strategy” AARP’s Debra Whitman wants us to spend more government money to help family caregivers, grow Medicaid, expand “affordable” housing and transportation, “integrate” health care services, and eliminate LTC impoverishment.

LTC Comment: Typical AARP eyewash. Not a word about where the money will come from to pay for such wishful public program expansions. The federal government already borrows a third or more of everything it spends. It forces interest rates to near zero to make such borrowing feasible temporarily. Watch out when this bubble bursts.

PBS Tip #5: “Begin the Conversation” Jennie Chin Hansen, CEO of the American Geriatrics Society [AGS], thinks we should “chat and chew” LTC issues with our friends and colleagues creating a “study group” opportunity to “discuss the universal journey.” She says “Let’s proactively help each other build greater confidence, clarity and capacity.”

LTC Comment: Doesn’t that advice sound vacuous coming from the head of the AGS? We’ve been jaw-boning long-term care for decades without addressing the real problem, i.e. government pays for most high-cost LTC which anesthetizes consumers to the risk and crowds out responsible LTC planning and private financing.

PBS Tip #6: “Make It a Human Right” Dr. Laura Gitlin of the Center for Innovative Care in Aging says “We need to grow a long-term care system based on . . . [the] principle . . . that long-term care is a basic right.”

LTC Comment: Of all the empty rhetoric in this program, the prize for thoughtless irresponsibility goes to this proposal. If people have a basic human right to long-term care whether or not they are able or willing to pay for it, their “right” means someone else must provide LTC whether or not they are compensated for their effort. That is the definition of slavery, which is what this ostensibly caring academic actually advocates.

Closing LTC Comment: When I see the subterranean quality of LTC policy analysis displayed in program’s like this one, I’m nearly ready to despair. The one thing that keeps me going is that a few of you AMGs (altruistic, masochistic geniuses) are still out there having truly valuable conversations with real consumers about how actually to protect themselves from escalating LTC risks and costs.

The whole wobbly Rube Goldberg apparatus of government-financed LTC puts enormous obstacles in your way. It gives away what you’re trying to sell. It makes your product unprofitable by manipulating interest rates so that its programs are artificially viable. It falsely assures citizens they’ll be taken care of by bankrupt social programs already under-funded by trillions of dollars. Yet you soldier on. Somehow.

Hail to the AMGs!

Search Results for: rehm

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