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High nursing home bills squeeze insurers, driving rates
Iris L.
Posted: Wednesday, March 25, 2015 4:41 PM
Joined: 12/15/2011
Posts: 18713

This was in my newspaper today, from the Associated Press. Insurers cannot afford the cost of long term care, either.

"Thirty years ago, insurance companies had the answer to the soaring cost of caring for the elderly. Plan ahead and buy a policy that will cover your expenses.

Now, there's a new problem: Even insurers think it's unaffordable.

Life insurance firms pitched long-term care policies as the prudent way for Americans to shoulder the cost of staying in nursing homes. But those same companies have found that long-term-care policies are squeezing their profits. Earnings for life insurers slid 11 percent in the most recent quarter, according to Moody's Investors Service, and long-term care was the chief culprit.

"Insurers that sell these products lose money on them," says Vincent Lui, a life-insurance analyst at Morningstar. "So they're raising prices and trying to get out."

Four of the five largest providers--including Manulife and MetLife--have either scaled back their business or stopped selling new policies."

Here is another article on the same topic:

High nursing home bills hit insurers; more scale back long-term care policies or push rates up

Does anyone here have a current long term care policy or a plan?

Personally, I purchased investments years ago to cover the cost of possible long term care. I am thinking of purchasing a life insurance policy.

Iris L.

Iris L.
Posted: Wednesday, March 25, 2015 5:54 PM
Joined: 12/15/2011
Posts: 18713

The main focus of my plan is to maintain my independence with Best Practices so I won't need a long term care facility.

Iris L.

Paul Hornback
Posted: Thursday, March 26, 2015 11:50 AM
Joined: 8/9/2013
Posts: 584

Iris, that is my plan as well!

God Bless, Paul

Posted: Thursday, March 26, 2015 3:49 PM
Joined: 5/30/2013
Posts: 1194

My wife who has EOAD has LTC insurance. It has more than paid for itself. Since she is receiving benefits now, we no longer pay premiums, but for those that do, the company implemented a 75% premium increase in January. Those that didn't want to pay the increased premium had to agree to significantly reduced benefits.

Because of the issues mentioned by Iris, I would hate to pay into a policy for years and then have the company either go bankrupt or significantly reduce benefits. As I'm contemplating LTC coverage for myself, I think it is more prudent to work with a financial planner so that retirement and savings can be maximized. Then use those funds to help with LTC expenses.

Iris L.
Posted: Thursday, March 26, 2015 6:42 PM
Joined: 12/15/2011
Posts: 18713

That's a good point, Peter. My thinking is that since Medicaid would come into play after five years, then I should have at least 5 years of payments available to me.

I would have to liquidate all of my assets.

The trouble is knowing how much the cost will be in the future. I had anticipated $3,000/month for assisted living. But the costs seem to be more than that now.

Iris L.

Posted: Thursday, March 26, 2015 8:13 PM
Joined: 7/29/2013
Posts: 11

My spouse, (EOAD) and I both have LTC insurance. And it so happens that I am in the business of LTC planning.

I can tell you that insurance will always out do your own money, (whether it's under the mattress or invested in the market). Insurance is pennies on the dollar.

Companies that have so-called "gotten out of the business" still have policies on their books that they honor. It's a legal contract and heavily regulated by the Dept. of insurance. None of the current carriers have gone into bankruptcy. There have been some significant rate increases, but it's still better than paying out of pocket. None of my clients have dropped their policies.

Policies that are being sold today have a significantly less chance of a rate increase than when I purchased my plan (14 yr. ago). Per actuaries: 12% chance.

For folks that already have a diagnosis, obviously Medicaid planning is vital, but if you don't have a diagnosis, I would highly recommend at least investigating your options: My motto:
Getting educated about Long Term Care, doesn't cost you anything; but not getting educated about it , could cost you everything!"

Iris L.
Posted: Thursday, March 26, 2015 8:49 PM
Joined: 12/15/2011
Posts: 18713

Hb1and2, most of us who post on this board already have a diagnosis or enough symptoms to be ineligible for a LTC insurance policy.

What do you advise about "LTC alternatives"? I have been approached by agents but they want me to come into the office to discuss, and I am wary.

I have also read that life insurance policies can be claimed early at a reduced rate to help pay for expenses once a patient is hospice stage.

Iris L