Consumers are not the only people who need educating about the cost of long term care and the need for long term care insurance.
How about our legislators?
Example: The $50 to $60 daily LTC benefit that is being considered by a Senate panel is breathtaking for its lack of financial awareness.
Even at $70 or $80 a day, people would be hard pressed to find a care facility that could deliver good care and still stay afloat financially. If the care is provided at home, it is doubtful that the same $70 would cover more than a few hours of care.
As Frank Keating, president of American Council of Life Insurers, Washington, D.C., notes in a letter he sent to Senate leaders, the cost of nursing home care currently averages $75,000 per year and home health services run as high as $46 per hour. (See related article here.)
Sure, the actual numbers will differ depending on the part of the country in which care is delivered, type of care facility or situation, and specifics of the care regimen. Still, the proposed daily benefit would hardly put a dent in the actual cost of service in most parts of the country.
Most likely, the patient, family and/or local service agencies would make up for the shortfall between the $50-$60 a day benefit and the actual daily cost of $100-$150 or more.
But if multiple payers are involved, that would bump up the facility’s operating costs, since facilities would have to increase their record-keeping, billing, and related financial services and also deal with the many extras that come with non-stop financial finagling. These costs will eventually show up in higher daily benefit costs–and rising payments by the patient, family and social agencies, with no noticeable improvement in care.
That is just one of many problems with the proposed Community Living Assistance Services and Supports (CLASS) Act. It suggests that the framers of the legislation are not fully informed about what LTC is or entails–and what it costs.
A bigger problem is: Why is any LTC benefit being included in federal health care reform proposals at all? Yes, as a discipline, LTC is allied to health care. But there are long-term housing, custody, care coordination, community, and many other aspects of LTC that present different issues and needs than are found in traditional health care.
Perhaps it is time for the LTC industry to develop an LTC education program for legislators, both federal and state. Where Washington is concerned, how about a fly-in only for LTC and LTC insurance?
A good question to ask is, if any legislative action is to be taken involving LTC, should that not occur as a separate initiative? This would enable LTC experts, including LTC insurance experts, to provide focused input, so that decision makers are more informed than they are now. It could be that solutions would emerge that are far better for government and consumers alike.
In any case, experts with deep knowledge of this field and its funding mechanisms should be weighing in on any proposals involving LTC and LTC funding.
[ To weigh in, click write to the editor or blog your comments below. ]
–Linda Koco, Managing Editor, Products and Managing Editor, e-Publications
National Underwriter Life & Health