LTC Bullet:  The Completely Understandable LTCI Buyer’s Guide

Friday, March 30, 2012


LTC Comment:  Craig McCormick’s new book is a good read and needed.  Check out my unabridged “Foreword” to it after the ***news.***

*** SPOTLIGHT ON:  “LTC Embed Reports” are special on-site reports from wherever the LTC policy battle takes us.  Whether it’s a Congressional hearing in Washington, D.C., an LTCi conference, or field reports from our latest project, we’ll take you deep into the trenches of LTC policy reform with our first-hand coverage.  If you can’t be there, count on us.  Center for Long-Term Care Reform members receive our “LTC Embed Reports” immediately upon release and have access to our Embed Report archive chronicling major LTC policy events back to 2004.  If you’re a Center member, log in and browse the archive here and read our latest report from the recent ILTCI conference in Las Vegas.  If you are not a member, but are interested in becoming one, click here or simply contact Damon (206-283-7036 / ***

*** HAVE YOU READ OUR LATEST publications?  Check ‘em out:

“How to Fix Long-Term Care:  Six Briefing Papers,” Center for Long-Term Care Reform, Seattle, Washington, February 3, 2012;

"Near-Term Prospects for Long-Term Care Financing Reform:  Final Report to the Milbank Foundation for Rehabilitation,” Center for Long-Term Care Reform, Seattle, Washington, January 27, 2012; ***

*** WHY GET OUR CLIPPINGS?  How much time do you spend each week reading articles on the internet about health and long-term care?  Is it all time well spent?  Or do you scan a dozen articles to find one that you really need to read?  Why not delegate the searching to Steve Moses?  Prioritize your research time by reading the best of the best articles, which he’ll send you daily.  Details on our “clipping service” are here, but in a nutshell Center members can subscribe by becoming premium members at the $250 or $500 level; non-members get the clippings for $120 per year.  Spend pennies a day to save dollars and precious professional hours daily.  You’ll get an average of three articles per day with a pithy quote, a link to the source, and when necessary, a sentence or two of interpretation. ***



LTC Comment:  You’ll find my opinion of Craig McCormick’s “The Completely Understandable LTCI Buyer’s Guide” in the following “Foreword.”  This is the only place you can read the full “Foreword” as it was condensed slightly to fit into the final version of the book.  Find author McCormick’s professional credentials here.  Buy his book here.  The Center for Long-Term Care Reform thanks Craig McCormick for his steadfast support of our work and for writing this valuable contribution to the literature on long-term care financing.


Foreword to “The Completely Understandable LTCI Buyer’s Guide”
Stephen A. Moses

Let this Foreword's first and main message be "Forward!"  If you're considering this book, buy it.  If you've bought it, read it.  When you've read it, act!

Why this book?  I don't have to go any further than the title to answer. 

"The Completely Understandable LTCI Buyer’s Guide" is completely understandable.  For a complicated subject like long-term care financing, clear, concise and comprehensive exposition and analysis are critical.  You'll find them here.

But odds are you'll still demur.  The single biggest problem we have with long-term care in America is procrastination.  "Denial is not a river in Egypt," they say.  Rather, it's the main reason most people don't plan responsibly for the risk and cost of long-term care.

But if the risks and costs are so great and if the private insurance solution is so obvious, as this book makes crystal clear, then why are less than ten percent of eligible Americans insured for long-term care?

I think answering that question is the most important contribution I can make to persuade you to buy this book, and more importantly, to get the LTC insurance protection you need.

All right.  We know 70 percent of seniors will require some long-term care and 20 percent will need five years or more.  We know LTC is very expensive whether it's provided in a nursing home, assisted living facility or in your own home.  We know private long-term care insurance is inexpensive compared to the cost of care if needed.  We know most Americans could afford LTC insurance, but too few buy it.  Why?

The usual explanations don't pass muster. 

  • Too expensive?  So you'd rather spend dollar-dollars later than nickel dollars now?
  • Won't happen to me?  So you're exempt from the laws of probability?
  • I'd shoot myself first?  So, you'll do it before Alzheimer's Disease makes you forget why you bought the gun?
  • My kids will take care of me?  So you're OK with your daughter giving up her career to change your diapers someday?

Come on!  The excuses people give to avoid or delay getting long-term care insurance are not the reasons they don't buy.  The real reason is subtler and more pernicious.

The American public has been anesthetized to the risk and cost of long-term care by well-intentioned but perversely counterproductive public policy.

The vast majority of all expensive long-term care in the United States has been paid by government programs since 1965.  They include Medicaid, Medicare, the VA, and Social Security income that people on Medicaid have to contribute to offset their cost of care.  These have accounted for more than three-fourths of LTC expenditures for more than four decades.

Consequently, most people look backwards at long-term care risk, at how their parents or grandparents ended up in nursing homes on Medicaid or some other government-financed program.

No wonder they don't want to think about it.  The outcome is undesirable (hence denial) and inexpensive (hence easy to ignore).

The book you're about to buy and read explains why it is not a good idea to rely on government programs to pay for your long-term care.  It explains how financially vulnerable the entitlement programs are that pay for long-term care.  It warns about the problems of access and quality you're likely to face.  It describes the downsides of Medicaid estate planning.

So let me just add this:  What's actually going to happen to America's entitlement safety net?

Social Security and Medicare now face unfunded liabilities of $107 trillion.  Their "trust funds" are empty, having already been spent for other government priorities and replaced with bonds, that is, IOUs. 

David Walker, former Comptroller General of the United States, says the government will have to double payroll taxes or cut benefits by half just to save those programs.

That's not even counting Medicaid, the dominant payor for long-term care, for which we can't even calculate an unfunded liability because it lacks even the phony trust funds disguising the financial disaster about to confront Medicare and Social Security.

Query:  do you really think politicians will double taxes or cut benefits by half to deal with this fiscal crisis?  Not likely.  What will happen instead?

I predict much stricter Medicaid LTC eligibility rules.  Soon people won't be able to shelter half a million dollars in home equity and get the government to pay for long-term care.  Unlimited exemptions for businesses, automobiles, prepaid burials and term life insurance will disappear.  Mandatory recovery from recipients' estates of Medicaid benefits paid will be aggressively enforced. 

But it's not just the Medicaid safety net that will be pulled away from the middle class.  Look for traditional "social insurance" programs like Social Security and Medicare to be converted to means-tested welfare programs too.

Alas, that process has already begun.  Social Security benefits are taxed above relatively low income levels.  You'll lose one dollar of Social Security income for every two dollars of earned income between age 62 and your full retirement age.  President Obama wants to charge payroll taxes, that now stop at $110,100 in income, on incomes above $250,000.  Look for more means-testing measures like these to curtail access to Social Security benefits for affluent, and increasingly, middle class people.

Will Medicare be affected too?  It already is.  Part B premiums skyrocket for higher income earners.  The newer Part D pharmaceutical program premium is also tied to income level.

Bottom line, the social safety net for long-term care, retirement income security, and acute care financing is being and will continue to be slowly retracted.  More and more, you'll hear our first priority must be to protect the truly poor.  With fewer resources available to meet that goal, more and more of the cost will come from cutting access to the social safety net programs for people of means.

So here's the main reason you should take my opening advice and move forward, buy, read and heed this book.

When it comes to all aspects of retirement planning, but especially long-term care, you must ignore the rear-view mirror and look bravely through the windshield.  Because what's coming toward you at 100-miles-an-hour is a brick wall of fiscal reality. 

You can avoid the collision, protect yourselves and your families.  But only if you act decisively and soon.

You're lucky to have such a fine road map as "The Completely Understandable LTCI Buyer’s Guide" to point the way.