Bullet: The LTCi Conspiracy
Wednesday, October 17, 2007
LTC Comment: Is
excessive criticism of private long-term care insurance a tactic to
promote more government financing of LTC?
Read about "The LTCi Conspiracy" after the ***news.***
*** TECHNICAL DIFFICULTIES prevented our publishing
Monday and Tuesday, but we're back with you today.
*** KUDOS TO JESSE SLOME AND AALTCI for this great
news: The United States House of Representatives has passed
Concurrent House Resolution (HR 133) supporting the goals of Long-Term
Care Awareness Week that takes place November 4-10, 2007.
"This marks a historic milestone for long-term care planning
and we applaud the leadership of U.S. Representative Charles W. Boustany,
Jr., M.D., (R-LA) who initiated and co-sponsored the House resolution
with Congresswoman Stephanie Herseth Sandlin (D-SD).
The resolution was co-signed by 27 Congressional
representatives," declared Jesse Slome, Executive Director of the
American Association for Long-Term Care Insurance (AALTCI).
The national organization established Long-Term Care Awareness
Week in 2001 as a focal point to encourage awareness of the importance
for planning by both consumers and financial professionals.
"As the number of aging Americans increases, long-term care
planning will become increasingly important for Americans and their
families," noted Congressman Boustany.
"Every American owes it to themselves, their family and
their loved ones to consider a plan for the potential need for long-term
care." A special Website [http://www.yourltcsuccess.com/]
for Long-Term Care Awareness Week has been established by the
Association. For more
information contact the American Association for Long-Term Care
Insurance at (818) 597-3227. ***
ANOTHER LTCI VICTORY. The
following news blew me away, knowing as I do how difficult it is to get
big bureaucracies to do anything. Jesse
Slome forwarded a letter he received from Cheri Arnott, Associate
Commissioner for the Social Security Administration.
Again, thanks to an initiative by Congressman Charles W. Boustany
(R, LA) the Social Security Administration will clarify its "Social
Security Statement about the Medicare program" to "stipulate
that Medicare does not pay for long-term care" and to advise
readers "that they may want to consider options for private
insurance for that purpose." These statements are mailed annually to millions of Americans
who are not yet retired and need to start planning for the eventual risk
of needing LTC. ***
VICTORIES like those don't just happen.
They take months and years of hard work and dedication to pull
together. Show Jesse Slome
you appreciate what he, AALTCI and the carriers who support LTC
Awareness Week have done. Register
for and attend the "Seventh LTCi National Producers Summit." Says Jesse:
out the largest national conference focused on selling and marketing
long-term care solutions. The
American Association for Long-Term Care Insurance (AALTCI) organizes an
outstanding national conference attended by hundreds of leading
producers, marketers, insurers and others focused on building their
sales of long-term care solutions.
The conference, held every 18 months, will take place February
24-26, 2008 at the Omni Hotel at CNN headquarters in Atlanta, GA.
The 3-day conference features outstanding sessions with many of
the nation's leading LTC experts. Early
registration is an affordable $295 (all attendees must be Association
members, which is only $49 for one year).
Complete information including the program and registration
information is available online at http://www.aaltci.org/2008summit
or by calling the Association at (818) 597-3227."
Jesse adds: "Steve
Moses will be there along with the 'Silver Bullet of Long-Term Care'
(his Airstream-trailer home-away-from-home and the media magnet for the
Center for Long-Term Care Reform's 2008 National Long-Term Care
Consciousness Tour)." Learn
about the Center's "LTC Wake-Up Tour" and check out the Silver
Bullet at the top of www.centerltc.com.
LTC BULLET: THE
LTC Comment: Private
long-term care insurance is not a perfect product. Nor are its purveyors always without fault.
But compared to the serious problems of access, quality,
reimbursement, discrimination and institutional bias that plague
government LTC funding programs, private LTCi is far better and safer.
The chances are infinitely better that private
insurance, which underwrites products carefully, sets aside large
reserves, and pays claims according to legally enforceable contracts,
will be there to meet its obligations when insureds qualify for
benefits. Compare that security with the unfunded liabilities,
non-existent reserves, and miserably inadequate reimbursements of
Medicaid, the most likely payment source for the uninsured.
Could it be that the often groundless, usually
exaggerated criticism of private long-term care insurance by advocates
of expanded public financing reflect ideological bias of the critics
more than the truth about private vs. public LTC funding?
The following article explores that question and is
republished here with permission from the author.
Conspiracy Theory of LTC Insurance"
are we hearing so much bad press about long-term care insurance all of a
sudden? The authors of much of it would have you believe it's because of
a plethora of failed attempts to collect benefits. Much of the attention
stems from a March 26 New York Times article that asserted that
one in four long-term-care insurance claims in California were denied.
The Des Moines Register has been printing a point-by-point
investigation of LTC insurance problems since July.
The Good News
Ignagni, President and CEO, America's Health Insurance Plans [www.ahip.org]
appreciate the opportunity to report what we have learned and give a
clear assessment of our commitment to providing retirement and health
security. In brief, we conducted a comprehensive survey of
long-term-care insurance companies - representing 92 percent of the
long-term-care insurance market - using data submitted to insurance
departments across the country.
our survey found that only 3.3 percent of long-term-care insurance
claims are denied...The numbers our survey found for California mirror
the national numbers and are nowhere near the high number reported in
the Times. In addition, representatives of the California
Department of Insurance have been quoted as saying that their own
internal review has revealed inaccuracies in their reports and that they
are doing a comprehensive review.
furthermore that denied claims may be properly denied as ineligible for
payment under the insurance policy, which denial protects all
policyholders by preserving reserves for legitimate claims.]
addition to low denial rates, companies that are actively offering
products in the market report that a full 80 percent of their policies
have never had a rate increase."
have been finally looking up for long-term care insurance due to these
The Own Your Future campaign - Tennessee was the 16th state to send
mailings to everyone in the state between the ages of 45-65 (some states
have mailed 50-70) over the Governor's signature saying it's a good idea
to plan for long-term care. Our
state had a 5.3% response and this isn't atypical for the program in
other states. The strong
message here is "If the governor thinks it's important, so should
The Deficit Reduction Act effective February 8, 2006 has made Medicaid
LTC benefits much more difficult to access for those who are
transferring assets or otherwise gaming the system.
The Long-Term Care Insurance Partnership is making a long-awaited
expansion. About a dozen states are diligently going through the steps
to make this extremely important program a reality and many more will
The NAIC has passed producer training requirements of at least eight
hours initially and at least four hours every other year for all sellers
of LTC insurance, and I don't care what anyone says, a better trained
producer will result in more sales.
(Yes, Phil Sullivan and I are introducing a training course to
satisfy these requirements at www.LTCiTraining.com.)
We've survived the rash of rate increases and some companies are still
standing without having one or with having only a moderate increase.
Pricing has somewhat stabilized as companies are adjusting to the
realistic (low) lapse rates and lower interest rates.
More companies are advertising LTC insurance which is increasing public
The reverse mortgage industry is finally getting good press. This will
help people who are "cash poor, house rich" find the money to
pay for LTCI.
individual LTCI premium for the first quarter of 2007 was up for the
first time in four years! And even more amazing, employer-sponsored
group sales are up almost 50% in both lives and new premium! (LIMRA
2007) We have an unprecedented opportunity to sustain and improve this
growth, particularly with the consumer education and producer training
surrounding the Long-Term Care Partnership expansion.
things going so much better, why all of a sudden are we facing so much
criticism? Let me ask it another way: Why are critics coming out of the
woodwork to dismantle the good news?
Government Accountability Office has issued two reports - one that says
very little transferring of assets to access Medicaid LTC benefits is
happening and a second to say that the Long-Term Care Partnership won't
save money for Medicaid so, why do it?
on the producer training are saying the occasional producer won't do the
training, so it will trim the number of LTCi sellers.
guess you can say that I'm extremely disturbed about these developments,
but I don't think the criticism is stemming from a failure to collect
LTCI benefits. I have a different theory - you can call it The
Conspiracy Theory of LTC Insurance if you like.
I read the attacks on long-term care insurance, I get the same sick
feeling I get whenever I read a Consumer Reports article that attacks
LTCI, and I believe the same motivation that is behind the CR articles
is behind this wave of negative publicity.
The majority of the critics are those who advocate a
government-funded LTCI program and whenever long-term care insurance
looks like it is grabbing a toehold, it becomes their mission to beat it
owe it to the families we serve and will serve with long-term care
insurance that we simply can't go without a fight. There are too many
families who have been helped in a wonderful way by this insurance and
we must continue to get it to as many people as we can.
GAO studies? On the first
one, how do educated people expect to find an abundance of people who
will raise their hand and say that they transferred assets? On the
second one, how is it that the original four Partnership states make up
22% of the total long-term care insurance policies ever sold?
And how is it that only about 200 people have accessed Medicaid
among all four states in the 15-year history of the Partnership?
attended the first Partnership Summit in Washington DC as a participant
and a presenter. It was
such a moving experience to see state regulators from Medicaid and the
insurance departments working together with insurance industry
representatives and consumer advocates from organizations like Agency on
Aging. There were even some provider representatives there. We were all
discussing how the Partnership can be positioned to serve the masses, a
message near and dear to my heart.
producer training critics? If we do the job we need to do on consumer
education - and the Partnership provides the perfect catalyst for this -
consumers will ask their financial planner, P&C [property and
casualty] agent, life insurance agent, investment analyst, etc. about
long-term care insurance and they will simply be too embarrassed not to
get the appropriate training in order to sell it. (Even if these
financial representatives work with a long-term care insurance
specialist, they will still have to complete the training in order for
their name to go on the application to split commission.)
as a result of misunderstanding some research about claims utilization,
the American Association for Long-Term Care Insurance is quoted in USA
Today as saying that just 7% of all women and 2% of all men who are
healthy enough to qualify for long-term care insurance policies will
need long-term care for more than two years, so reading that, I think to
myself, why would anyone even consider long-term care insurance anyway
for such a low risk? In
talking with the researcher, I learned that those stats are at a
specific point in time for a 65 year old and there are different stats
for each age. The same study said that there's an 18% chance that a 55
year old will need longer than 5 years. (Dawn Helwig and Deborah Grant,
"How to 'Right Size' LTCi Protection to Match Real LTCi Claims
Usage", Milliman Consultants and Actuaries, Sales Strategies,
it isn't fair to just measure paid care.
What about the $300+ billion of caregiving that occurs each year
that is attributed to informal caregivers who make up by far the
majority of the caregivers? And what will happen as the availability of
family caregivers continues to decline over time because of rising
divorce rates, increasing childlessness and declining family sizes?
Don't we think more paid caregivers will be needed?
always been the first to say that just as public dollars can't totally
solve the long-term care crisis, neither can private dollars, but we
should be doing everything we can to help both work together.
For every dollar paid by private LTC insurance, that's a dollar
freed up that Medicaid or any other public program will be able to use
to help someone less fortunate.
Partnership opportunity for consumer education and producer training
won't come along again in our lifetime.
Let's make the most of it. We
all need to do our fair share to provide consumer education in our
communities, and please - don't treat the producer training as just a
requirement. Our training course is designed to make you the BEST and most
prepared LTCI professional in your community with the most current and
cutting-edge information, so if you care about being the best you can
be, then our course is for you!
challenge to the critics is to stop trying to punch holes in the very
thing that has the very real potential of saving the dignity of our
families and the American economy as the baby boomers march relentlessly
into their aging years.
Phyllis Shelton is President of LTC Consultants and LTCiTraining.com. She is a widely published author, a highly accomplished speaker, and a leading LTCi trainer. Contact her at firstname.lastname@example.org or 888-400-1118 or www.ltcconsultants.com.