LTC Bullet:  The LTC Blind

Friday, October 25, 2013

Corning, California—

LTC Comment:  “There are none so blind as those who will not see.”  That proverb applies perfectly to a recent column about long-term care, after the ***news.*** [omitted]


LTC Bullet:  The LTC Blind

“There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard

LTC Comment:  Case in point?  A Forbes column last week by a perennially insightless writer.  Excerpts and our analysis follow.


Excerpts from “Americans Worry About Long-term Care Costs, See Insurance and Government Solutions” by Howard Gleckman

“Americans have little idea how long-term supports and services are paid for, according to a new poll by Harris Interactive HPOL -0.51% and the medical publishers HealthDay. Yet, they are worried about the cost, believe most people should buy long-term care insurance, and also favor a new government program to pay some or all of the costs of LTC.

“It is hard to make much sense of these results, although the public's confusion in this poll seems consistent with past surveys.

“For instance, although Medicaid pays for as much as 60 percent of long-term care costs, only about one in five of those surveyed believe the program is the major payer of these services. One-third think Medicare is the biggest funder, though the program pays for almost no LTC costs. Half think individuals pay the most. In reality, families pay only about one-fifth of the cost of paid services, though of course they do provide the vast bulk of uncompensated care.

“When asked who should pay these costs, 29 percent said individuals and their families while 27 percent said the federal government. Interestingly only 9 percent thought state and local governments should pay even though states are already a major payer through their share of Medicaid. Fully one-third said they don't know who should pay. . . .

“The survey also asked if people were worried about the cost of long-term supports and services. Overall, 68 percent said they were very or somewhat worried. Women more much more likely to be concerned than men by 74 percent to 61 percent. By age, those least likely to be concerned were 18-24 (not surprising) and those 65 and older (very surprising). Those most likely to worry were aged 40-49. . . .

“What's the take-away of all this? Americans recognize that long-term supports and services are a major financial risk, yet they are deeply uncertain about how long-term care is paid for today and what to do about it. And they seem open to some sort of new government program to help, perhaps one that is insurance-based in some way.” 


LTC Comment:  If the findings of this poll leave you stumped like the Forbes columnist, you haven’t been reading your LTC Bullets.  Let’s review.

Survey after survey and poll after poll produce the same results:  Americans don’t know who pays for long-term care.  Nevertheless, they do know LTC is high risk and high cost.  But they don’t do much about it, such as buying LTC insurance.

Academics, pundits, policymakers and even some LTCI marketers scratch their heads, throw up their hands and whine:  “What’s wrong with the American people?  How can they be so dense?  It must be denial, self-delusion, or early onset Alzheimer’s.” 

Guess what?  The public has a better grasp of reality than the “experts” who “refuse to believe what is true.”  Here’s what’s true and why it explains the poll findings that befuddle so many analysts.

(1) Americans don’t know who pays for long-term care because they haven’t needed to know.  Since 1965 Medicaid has paid for most expensive long-term care.  It still does.  It pays after the insurable event occurs and without significant income or asset limits as we’ve explained so many times before.  Ending up on Medicaid is a terrible outcome because of the program’s access and quality problems, but consumers don’t confront that reality until after it is too late to prepare responsibly.  By then their heirs are so relieved their inheritances are safe that they blank out about their own need to plan for LTC risk.

(2) Americans know LTC is high risk and high cost?  Of course.  It’s been drummed into them by newspapers, magazines, TV specials, “Own Your Future” campaigns, and every altruistic, masochistic genius who’s ever survived for more than a few weeks selling long-term care insurance.  A truly strange poll finding would be that Americans hadn’t gotten the message of LTC’s high risk/cost and somehow thought long-term care was an emotional and financial cakewalk. 

Now, all you have to do is add paragraph one to paragraph two to get paragraph three.

(3)  When asked who pays for LTC, Americans either don’t know or say “Medicare.”  Well good guess, but the real payer is Medicaid.  The only thing that matters is that somebody pays, and Medicaid does.  So, even though people do know that LTC may hit them with huge costs, it’s all just theory to them because in fact somebody really does pay if LTC becomes high-cost.  Why don’t they plan to save, invest or insure for LTC?  Simple.  Consumers have many demands on their attention and finances.  They only focus on real risks and costs and they prioritize which risks and costs on which to focus.

End result?  You get the survey and poll findings that baffle deniers.  They refuse to acknowledge how Medicaid works in reality and cling to the myths that (1) it requires impoverishment and (2) LTC wipes out life savings nationwide.  To resolve their conundrum is as easy as opening their eyes and accepting reality.  But they have clamped their eyes shut.

Want some good eye-openers?  Read just about anything at, especially our “Articles, Speeches, and Reports.”  We’ve provided the evidence to back up the argument in this Bullet often and irrefutably.  We’ll gladly debate anyone publicly who disagrees.