In the statistically unlikely event that you are still reading this after so many posts, you might be wondering if my skeptical attitude toward long term care insurance is shared by anyone else.
Not by government, of course, since they have a vested interest in keeping entitlement spending down. (Like everyone else, I want entitlement spending cut – but not MY entitlements, of course).
Not by insurance companies. If you have a product that can make money, why would you want to question it? Not making money – just increase the premium, even on “level premium” policies. Making lots of money – no one can force you to lower premiums. Sounds like a good business.
These quotes are from http://www.californiahealthline.org/Features/2008/State-Partnerships-for-Longterm-Care-Policies-Under-Fire.aspx Consumers Union publishes Consumer Reports.
Betsy Imholz from Consumers Union. "I think it's a really bad idea for government to be sanctioning private insurance companies. Especially when this particular kind of insurance is of such questionable value."
Imholz, director of special projects and lead advocate on health issues at Consumer Union's regional office in San Francisco, points to a Consumer Reports assessment of long-term care insurers in California that granted passing marks to only three of 47 policies examined in the study.
The long-term expense of long-term care, lack of drug coverage in the policies and questions about the financial viability of insurers are all areas of concern, critics say.
"If you start paying for insurance in your 40s and you live into your 80s, you're going to be making payments for an awfully long time," Imholz said. Imholz said drug coverage -- often the most expensive part of care -- frequently is not included in long-term policies.
But it wasn't the value of the insurance offered, drug coverage or other shortcomings that caused so many policies to earn failing grades in Consumer Reports' survey. It was insurers' long-term financial viability.
"Financial stability is where most of the policies fell short," Imholz said. "I think there's some question whether these companies are up to the task over the long haul."
Imholz urges people to do a lot of homework before investing in an LTC policy. "Most of them are not a good idea. People should be very cautious."
And, if California Health Line will forgive me for yet another quote, I’ll add this one:
Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, agrees.
"There are a few problems with these partnerships, starting with a government agency acting as frontmen for big business," Court said. "Another problem is the product they're pedaling you is suspect to begin with. These policies aren't great and they're getting worse -- more expensive and harder to cash in on. They keep moving the bar higher for determining when you qualify for coverage."
And this executive from the Kaiser Family Foundation in the New York Times. http://newoldage.blogs.nytimes.com/2009/06/16/congress-airs-concerns-on-long-term-care-insurance/
“There are no guarantees that the policies purchased today will serve your needs 20 to 30 years down the road,” Diane Rowland, executive vice president of the Kaiser Family Foundation, told the Senate Special Committee on Aging earlier this month.
Consumers must balance premium affordability with the types of services they may want, the daily benefit amount, the length of coverage and other options, such as inflation protection. But personal needs and the marketplace can change in the decades between purchasing and using a policy, Ms. Rowland said.
Moreover, some purchasers find they can no longer afford the premiums, even after years of payments. And it is even more expensive to acquire coverage late in life. A long-term care policy costs almost twice as much when purchased at age 70 than it would have at age 60, according to a Kaiser policy brief (PDF).