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LTC Bullet:

Barron's Analysis Not All It's Cracked Up To Be

Tuesday April 18, 2000

This Bullet is the fourth in the Center for Long-Term Care Financing's "LTC Reality Check" series.

In her article "Less Than Meets The Eye: Long- Term Care Insurance Isn't All It's Cracked Up To Be" (Barron's, March 27, 2000), reporter Maria Luce claims to uncover the hidden facts about long-term care insurance. According to Luce, "the coverage [is not] the panacea that the insurance agents and slick brochures would have you believe." Unfortun- ately for readers, Luce proceeds to weave together blatantly incorrect and outdated information into a flawed analysis.

Eileen Tell, Vice President with the Long Term Care Group, responded with a letter to the editor of Barron's which painstakingly corrects reporter Luce's many mistakes and exaggerations. Ms. Tell's complete letter is available on the Center's web site at Just click the link "Barron's Analysis: Not All It's Cracked Up To Be" on the Center's home page.

Through "LTC Bullets" (especially those in our "LTC Reality Check" series), the Center for Long-Term Care Financing tries to provide and explain accurate, well-documented, thoroughly-contextualized inform- ation about long-term care financing. Thanks to Eileen Tell for another terrific contribution to this effort.

Below is an excerpt from Eileen Tell's letter:

"The article cites the slower rate of increase in nursing home admission rates relative to rates of population growth among the elderly as evidence of the declining need for nursing home care. This is then given as a reason not to worry about long-term care insurance. But what is behind this declining need for nursing home care is the increased use of alternatives to nursing home care -- in particular care at home, in the community and in assisted living facilities. Long-term care insurance covers care in these varied alternative settings, not just in nursing homes. In fact, it is almost the only payment source for these important alternatives; Medicaid seldom covers care outside of a nursing home. Also, data suggest that the need for long-term care is on the rise. The GAO predicts that the number of elderly needing long-term care will double in the next 25 years (GAO, 1994). "

Click here
for the full text of the letter.