LTC Bullet: The State of LTCI: Myths, Facts and the Wall Street Journal Article
Friday, April 6, 2018
LTC Comment: Tired of reading misguided and bad information in media coverage of long-term care insurance? MAGA’s Brian Gordon offers a much-needed reality check by rebutting the infamous “Wall Street Journal article” with facts, after the ***news***.
*** Those who attended the closing session (The Coming Revolution in Long Term Caregiving: The Future is Now!) at last month’s ILTCI conference know that technology and robotics will play an increasingly substantial role in caregiving going forward. However, in the meantime, caregiving continues to affect real people in real ways. Here are two recent articles we sent to our Clipping Service subscribers that deal with the current and forthcoming caregiving challenges we face. To inquire about our Clipping Service, contact Damon at 206-283-7036 or email@example.com. Please enjoy these sample clippings:
4/4/2018, “Caring for elderly parents can put a dent in your budget,” by Sarah O’Brien, CNBC
LTC Comment: Sound advice.
3/26/2018, “As Trump Targets Immigrants, Elderly Brace To Lose Caregivers,” by Melissa Bailey, Kaiser Health News
Quote: “Nationwide, 1 million immigrants work in direct care — as CNAs, personal care attendants or home health aides — according to the Paraprofessional Healthcare Institute, a New York-based organization that studies the workforce. Immigrants make up 1 in 4 workers, said Robert Espinoza, PHI’s vice president of policy. Turnover is high, he said, because the work is difficult and wages are low. The median wage for personal care attendants and home health aides is $10.66 per hour, and $12.78 per hour for CNAs. Workers often receive little training and leave when they find higher-paying jobs at retail counters or fast-food restaurants, he said.
Politics + demographics = LTC - TLC. ***
ltc Bullet: The State of LTCI: Myths, Facts and the Wall Street Journal Article
LTC Comment: Recently we, at the Center for Long-Term Care Reform, celebrated 20 years in operation. In those 20 years, we’ve published over 1,200 LTC Bullets and have all of them archived on our website by date and by subject. One of those vital subjects we call “Reality Check: The Facts on LTCI.” This is where we store over 120 LTC Bullets, dating back to 1998, that address inaccuracies and faulty data that abound in media coverage of long-term care insurance. Lately, with the abundance of LTCi-related inaccuracies, faulty data and bad advice in the popular press, we’ve added a lot of “Reality Check” LTC Bullets to our archive. Today, we add one more. This latest addition is a guest LTC Bullet by Brian Gordon, president of MAGA Ltd., a CLTCR corporate member. We wish to thank Brian Gordon and MAGA for their role in protecting people from the risk and cost of long-term care. Reprinted with permission is Brian Gordon’s piece: “The State of LTCI: Myths, Facts and the Wall Street Journal Article.”
“The State of LTCI: Myths, Facts and the Wall Street Journal Article.”
by Brian Gordon
By now, you've probably read Leslie Scism's Wall Street Journal article, "Millions Bought Insurance to Cover Retirement Health Costs. Now They Face an Awful Choice." The "awful choice" in question is Ms. Scism's assertion that today, LTCI policyholders must either 1) accept large premium increases or 2) drop their coverage.
We found this gloom-and-doom argument-that there is no other reality and no other options-to be misleading and incomplete. Most disturbingly, it invites consumers to throw up their hands in despair, rather than encourage thoughtful long term care planning.
On the plus side, this opinion piece sparked an important conversation, eliciting a range of responses. Here is our rebuttal to some of the key points in the WSJ editorial.
Today, LTCI insureds have two bitter choices: pay stiff premium increases
or forfeit coverage.
LTCI carriers made a huge pricing mistake and now their insureds will pay
for it forever in the form of steep rate increases.
However, in recent years, carriers have corrected their pricing. Consider this: rate assumptions made in 2014 were based on 16 times as much actuarial experience as those made in 2000. Companies are more informed. We do prime clients purchasing traditional LTCI today to expect some modest rate increases, just like their car and health insurance.
When an insured's LTCI premiums increase, they're getting a raw deal.
Since hybrid/combo LTCI products are costly, they aren't worth
WSJ: With such limited choices, why bother with long
term care planning at all?
If you'd like to explore this topic further, we suggest reading the recent Forbes article, "Why the WSJ Is Wrong about Long- Term Care Planning," by Jamie Hopkins, the Co-Director of the American College's New York Life Center for Retirement Income and an Associate Professor of Taxation at the American College. And if you'd like to discuss this further with us, please don't hesitate to get in touch.
MAGA Ltd is a LTCI pioneer established in 1975. The award winning MAGA team provides education to consumers, financial advisors and insurance professionals. Licensed nationally, they represent highly rated carriers for both Asset-Based and Traditional LTCI products. The Founder Murray Gordon, along with Brian Gordon CLTC and Peter Florek CLTC, have over 90 Years combined experience in the LTC Industry. MAGA clients have received millions of dollars in LTC insurance benefits thanks to their dedication to service.