The spate of bad publicity garnered by long-term care insurance (LTCI) last year generated a lot of attention, from calls for reform by Presidential hopefuls to a study by the GAO, released in July, on consumer protection standards and enforcement. The news isn’t all good by any means, with uneven adoption of new standards by the states; premium increases of varying sizes, with approvals that vary widely from state to state; claims difficulties; and a lack of definition for some vital terms such as “timely” and “reasonable.”
However, the news isn’t all bad either, insists Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI). “I think…because some of the more potentially inflammatory information [the GAO study] contains lacks any context, it really provides little guidance for legislators,” says Slome. And worse, he adds, the study assists people “who have an agenda” to advocate “government-paid-for long-term care insurance” the opportunity to do so with a “15-second sound bite.”
Slome goes on to cite a number of issues he has with the study. The biggest obstacle to increasing sales of LTCI, he says, is the perception that it is expensive. While some eight million people have LTCI policies, according to AALTCI, most people rely on Medicaid to provide long-term care–and Slome says that that makes the taxpayer the insurer of last resort. He says the study reinforces the perception of policies’ high cost by citing an annual premium of $2,200 for a 55-year-old purchasing a 3-year, $100/day comprehensive coverage policy in 2007 from one company in California. AALTCI does an annual price index, he adds, that shows a premium of $709 for 2008, albeit for an Illinois policy.
While IA‘s Directories for both last year and this year showed premiums considerably lower than the $2,200 mentioned in the GAO study, many did not include inflation protection; also, they were quoted for 50- or 60-year-olds rather than 55-year-olds, with numerous other variations, such as shorter terms. Most offered payment for care in nursing facilities as well as home care or some other venue.