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LTC Bullet:

Report Biased Against LTC Insurance for Women

Wednesday July 28, 1999


OWL (Older Women's League) recently published a report on health care for older women entitled, "The Face of Medicare is a Woman You Know." In the section on long-term care, Dr. Cynthia Costello writes, "Private long-term care insurance is not an option for most women." Following is the response of Center for Long-Term Care Financing Research Coordinator Nadia Morgen (sent to Dr. Costello with examples of the Center's work):

July 28, 1999

Dear Dr. Costello:

In the process of reviewing your report entitled "The Face of Medicare is a Woman You Know" several concerns grabbed my attention.

In your section on Medicaid, you assert that few women can afford long-term care insurance; this premise is untrue.

Planning ahead is especially important with long-term care. Long-term care insurance is much cheaper at younger ages, as older clients are much closer to the insurable event. A recent newspaper article featured a woman who bought a policy for just over $400/year (or approximately $45/month) at the age of 43 (Hawes, Charleston Post & Courier, 4/12/99 p. A01). A 65-year-old paying $2500/year (as in your study) will have paid $50,000 by age 85; the 43-year-old will have paid approximately $17,000. Both will have paid considerably less than the cost of long-term care: $50,000 would cover just one year in a nursing home in some parts of the country; $30,000 would cover about one year of assisted living; and $17,000 would cover costs of home health aides about 3 hours/day for one year.

For those already 65 and over, an easy way to reduce premiums is to reduce the number of bells and whistles in the policy. A 75-year-old, for example, may not need inflation protection. Just as raising the deductible on an auto policy lowers its premium, adding a waiting period to an LTC policy reduces the LTC insurance premium. Other options include limiting the total dollar amount of the policy benefit, limiting the duration of benefits, and involving family members in financing long-term care insurance premiums. After all, who's going to get the inheritance protected by the insurance?

I also question your source of LTC insurance statistics. The Long-Term Care Campaign strongly pushes the government for increased LTC funding. I recently asked the Campaign how they propose funding expansion of publicly-financed long-term care. My inquiry was answered by Jon Dauphine at AARP. Mr. Dauphine told me the LTC Campaign advocates for: "(1) better use of funds currently in the LTC system and (2) increased funding for LTC needs." He added that, "We don't prescribe to legislators what the appropriate funding stream must be…." According to their web site, they want Medicaid and Medicare to cover all types of LTC instead of just nursing homes. While I'm sure the Campaign has good intentions, their agenda clearly lends itself to heavy
bias against privately financed long-term care.

I'm always excited to see any research on long-term care; it's not a cherished topic people are eager to discuss. However, your analysis essentially gave LTC insurance a token glance instead of careful consideration. You neglected to evaluate the objectivity and credibility of your sources, and arrived at a grim conclusion. While that may serve the political agenda of OWL, it does every woman a grave disservice: it instructs them they can't take care of themselves. Women would be much better served if taught that with some preparation and ingenuity they can choose and finance the type of care most appropriate for them.


Nadia Morgen
Research Coordinator