The truth about long term care insurance

Los Angeles Times:  The Los Angeles Timeson Saturday examined how consumer advocates and state insuranceregulators expect lawsuits “to mushroom in the coming years as morebaby boomers and their ailing parents make claims on long-term careinsurance.” Sales of long-term health insurance policies increased by65% between 2000 and 2004. However, according to the Times,”actual and projected payouts have already caused a shakeout that couldleave some policyholders with huge bills worried that insurers can’t orwon’t pay,” and some “insurers who underestimated their potentialobligations have sharply hiked their premiums or abandoned the market.”According to attorneys, long-term care insurers have denied claims fora number of reasons, such as “inadequate documentation from seniors toosick or distracted to be diligent record keepers” and some have”rescinded policies, saying the individual didn’t fully disclose apre-existing medical condition on his or her application,” the Times reports.  Sandy Praeger, the insurance commissioner of Kansas and vice president of the National Association of Insurance Commissioners,said that increased sales of long-term care insurance policies place”pressure on us as regulators to ensure that policies live up to theirpromise to pay” (Selvin, Los Angeles Times, 10/14).

Ed:  Long term care insurance isn’t available to those who need it–underwriting restictions make it almost impossible to buy this product if there’s a perceptible chance that you will actually need long term care.  The DRA’s “Long Term Care Partnership” program is nothing more than a cash cow for the industry–it doesn’t require insurers to sell a policy to particular persons–indeed, it sets no standards at all on the industry with regard to who gets the benefits of the program.  The solution to the long term care problems we’ll be facing in the next twenty year?  A long term care benefit in Medicare, financed by a small additional payroll tax on middle aged and older wage earners.  You read me right!  Politicians, pay attention.  The future you save is your own–and your kids’.