LTCShop.com is designed for consumers seeking to learn more about long-term care insurance. On the right-side of the page you will see “LTCI DICTIONARY” with a drop-down list of long-term care insurance terms. Some terms will have definitions only, and some will have other useful articles about that term. You may search this site on the right-side of the page, or ask your own question by choosing the button at the top of the page.
What is Long-Term Care?
Long-term care includes a variety of services that may be both medically and/or non-medically necessary for people with a chronic illness or disability. Health and personal needs are met through long-term care. Generally speaking, long-term care provides people assistance with activities of daily living, such as bathing, dressing, eating, toileting or transferring. People of all ages may need long-term care.
Choosing long-term care is an important decision. Planning for long-term care requires you to think about possible future long-term care needs and costs. It is important to plan for long-term care before you need it, and before a crisis occurs. By thinking and planning your choices now, you will have more control over your individual situation, possibly remaining independent longer. Even when you plan ahead, making long-term care decisions can be very difficult.
You may never need long-term care. Even if you make careful plans and arrangements, you may never need it. According to the US Department of Health and Human Services, “This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly. A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more.”
If you could design “perfect” long term care coverage for yourself, what would it look like?
I recently asked someone this question and she said:
“It should have premiums that are guaranteed to never go up. It should be able to return most, if not all, of my premiums to my heirs if I never need long-term care. It should have some type of cash value so that if I decided to cancel it for any reason in the future I could get most, if not all, of my money back. It should give me the choice to receive my care at home and not just in a facility.”
What most people don’t realize is that policies like this are available and have been available for many years.
To learn more about this type of policy, contact me at:
I was reading an online “newspaper” the other day. There was an article about long term care insurance and the importance of planning for the financial consequences of needing long term care.
I like to read the comments at the end of articles. I often find the comments more interesting than the article itself. I was surprised that a number of people left comments believing that only those with “perfect health” could qualify for long term care insurance. Nothing could be further from the truth!
Since 1995 I’ve helped hundreds of people with health problems obtain quality long term care insurance policies, from highly rated insurers, at affordable prices. The key is knowing each long term care insurer’s “underwriting nuances”.
For example, one long term care insurer might not insure someone who has had a Transient Ischemic Attack (aka T.I.A. or “mini-stroke”) in the past 5 years. Whereas another long term care insurer can insure someone who has had a “mini-stroke” just 12 months ago.
An application submitted to the first insurer would result in an automatic declination. An application submitted to the second company would most likely be approved.
This is an over-simplified example, but it illustrates the central point: Most of the leading long term care insurers have very different ways of determining who is insurable and who is not insurable.
Is there hope for someone who has been declined for long term care insurance? ABSOLUTELY!
In 2003, the Iowa Insurance Division (IID) foresaw the need to protect Iowans from uncontrollable long-term care insurance rate increases. Therefore, the IID enacted a Rate Stability Regulation effective February 1st, 2003. (Iowa Administrative Code 191—39.26 & 39.28)
Policies purchased in Iowa before February 1, 2003 are not protected by this regulation.
Policies purchased in Iowa after February 1, 2003 are protected by this regulation.
Those long-term care policies that have had premium increases, over 98% of them were issued before February 1, 2003. In other words, nearly every Iowan who purchased LTC insurance after February 1st, 2003, is paying the exact same premium today that they were when they first purchased their policy.
Why didn’t the staff of the Des Moines Register mention Iowa’s Rate Stability Regulation (and its success) in their editorial?
Scott A. Olson
P.S. Iowa as well as 40 other states (and the District of Columbia) have enacted a Rate Stability Regulation in order to protect consumers who purchase long-term care insurance today.
The Des Moines Register recently wrote an editorial on long-term care insurance. (“Long-term care policies have their risks”, Sunday, September 21st, 2014)
Everyone has a different opinion about long-term care insurance. But if the largest publisher in Iowa is going to draw conclusions about long-term care insurance, the least they should do is some basic research into the existing insurance regulations. Below is the response that I posted to their website:
Unfortunately, this editorial does not tell even half the story about long-term care insurance premium increases.
In 2003, the Iowa Insurance Division foresaw the need to protect Iowans from uncontrollable long-term care insurance rate increases. Therefore, the Iowa Insurance Division enacted a Rate Stability Regulation effective February 1st, 2003. (refer to Iowa Administrative Code 191—39.26 & 39.28)
The “Iowa Guide to Long-Term Care Insurance”, published by the state of Iowa, explains on page 21:
“Regulations effective February 1, 2003 make rates more stable and increases less likely. These regulations apply to all new individual and group policies issued on or after February 1, 2003. However they DO NOT apply to individual policies issued before February 2003.”
Policies purchased before February 1, 2003 are not protected by Iowa’s Rate Stability Regulation. Nearly all of the premium increases that have been approved by the Iowa Insurance Division have been on policy forms that were issued before February 1, 2003.
In fact, of the nine A-rated long-term care insurers that sell about 90% of the individual LTCi policies today, NONE of them have had premium increases on the policies they’ve sold in Iowa since February 1st, 2003.
Why would the Des Moines Register not mention Iowa’s Rate Stability Regulation (and it’s success) in this editorial? The answer is probably that the Des Moines Register was unaware of the regulation. The insurance industry and insurance regulators have done a poor job of educating the public (and journalists) on the long-term care insurance rate stability regulations that are in place now, in over 40 states.
Scott A. Olson
For years “experts” have concluded that the long-term care insurance industry is dead. Here are some of the headlines:
“Long-term care insurance begins to fade away”–New York Times, Nov. 2010
and, most recently:
“Dodge the long-term care insurance mess”–Forbes March, 2013
CalPERS plans 85% rate hike for long-term-care insurance–Los Angeles Times Feb. 2013
The CalPERS 85% rate hike on their long-term care policies validates my comments made on the Forbes article.
CalPERS is NOT an insurance company.
CalPERS is NOT regulated by the California Dept. of Insurance.
If CalPERS was regulated by the Calif. Dept. of Insurance, the CalPERS policyholders would have been protected.
Bottom line: The reports of the death of the long-term care insurance industry have been greatly exaggerated.
The facts are indisputable.
- Contrary to what is often published on the internet, 4 of the top 10 long-term care insurers have never had any premium increases on any of their LTCi policyholders. 2 of the top 10 long-term care insurers have not had any premium increases on any of the LTCi policies they’ve sold since the rate stabilization regulations began to take effect in each state (2001-2004). I wish my medical insurance premium was the same as it was in 2001.
- Although those who purchased the CalPERS LTCi policies are faced with a big premium increase, there are over a dozen different LTCi policies that were for sale in California, at the same time, that have not had any premium increases.
- Today, about twice as many people own long-term care insurance as did in the year 2000.
- The industry is paying about $7 billion every year in claims to over 200,000 LTCi policyholders that are on claim.
- While some LTC insurance companies’ sales have been down over the past few years, other long-term care insurers have had growth of over 20% each year the past few years. In this economy, that is a remarkable feat for any industry, particularly long-term care insurance.
- Since the financial meltdown of 2008, two of the top long-term care insurers have even had their financial ratings go up–improving from an “A” rating to an “A+” rating. In fact, those two companies are the only insurance companies to have their ratings upgraded since the mortgage crisis of 2008.
Is the long-term care insurance industry in a state of flux? Of course. Every industry today is in a state of flux. Every industry has been changing rapidly since the mid-90′s and the pace of change is getting faster and faster.
It wasn’t that long ago when personal computers were referred to as “IBM-compatible”. Yet, in December of 2004, the company that set the standard for personal computers stopped selling personal computers. After dominating the PC market for most of two decades, IBM abruptly left the PC market.
No journalist was silly enough to write the headline:
“IBM stops selling personal computers–the future of personal computing is in doubt!”
Yet, in the Spring of 2012, after one of the larger long-term care insurers announced that it would stop selling new long-term care policies, “experts” concluded that the future of the long-term care insurance industry was “in doubt”.
IBM made a simple business decision in 2004. They concluded they were not nimble enough to profit from low-margin, price-sensitive, computer manufacturing.
Insurance companies also make simple business decisions. There are significant overhead expenses to create, market, and underwrite long-term care insurance.
These expenses are incurred regardless of how many (or how few) policies are actually sold. If sales are too low, the overhead costs per policy make it unprofitable for the company to sell new policies.
Those companies that are providing a good product at a good price are experiencing significant growth–some companies as much as a 50% growth in sales in the past two years.
Not only are some LTC insurers growing, but some that had gotten out of the business have decided to get back into the business.
Two highly-rated insurers that sold long-term care insurance for nearly 20 years, and then stopped selling new LTCi policies, started selling new LTCi policies again after significantly reducing their overhead and streamlining their business processes (something every company, regardless of industry, must do today in order to remain competitive.)
Healthcare reform (aka “Obamacare”) does not provide any long-term care benefits. The “CLASS Act” is now defunct. Medicaid is not the solution for long-term care for the middle class or the wealthy.
Long-term care insurance policies are not the perfect solution. But, a well-designed long-term care policy, especially a government-approved long-term care partnership policy, may be the best way to prepare for the “long-term care tsunami” headed to our shores in the next 15 years.