A Perspective

THE MIGHTY BASICS...That is what I called the presentation I made in the early 2000’s to elder law attorneys, financial planners, and health care professionals about long-term care (LTC) insurance. There were many major companies competing in the market, virtually all of them offering products with the same benefit triggers so that they would be compliant with the Health Insurance Portability andAccountability Act (HIPAA) and thus provide certain valuable guarantees to their insureds. They varied in the optional benefits they offered, but many were similar in their pricing and health underwriting practices.

THEN SOMETHING HAPPENED...Not suddenly, but gradually, companies began to raise their rates for new policies, and, inevitably, for existing policies. And over time many insurers withdrew from the marketplace. They were, and are, still responsible for the policies they had sold (thanks to HIPAA), but the number of companies selling traditional LTC policies has dropped dramatically.

A RESOURCE EVOLUTION...Resources for an insured cushion against the cost of long term care have evolved from stand-alone or traditional policies to choices between so-called hybrid products combining life and LTC benefits to asset based LTC contracts (e.g., annuities).

Very limited benefit period (e.g., 360 days) policies are now also available, clearly not providing long term care coverage, but which do offer care at home, in assisted living, or in skilled nursing facilities.

Many life policies now offer riders that also provide options for care at home, in assisted living, or in skilled nursing facilities. Some provide LTC riders while others offer chronic illness riders. The difference between them can be critical in the event of a claim. While benefits for both must meet the same triggers as in a traditional LTC policy, one requires that the condition be likely to last 90 days or longer while the other requires certification that the condition is permanent.

THE POINT...Some financial protection against the expense of long term care is now available through a variety of insurance products. Which, if any, may be appropriate for you depends, as always, on your reasonably foreseeable needs and economic circumstances. But you should be aware that this market has evolved and offers a much wider range of benefit and cost alternatives than in its early years.

Please allow me to note that, in October of 2016, Governor Wolf appointed me to the Pennsylvania Long-Term Care Council. Serving on the Access Committee of the Council has given me a perspective on the challenges, needs, and commitment of the professional caregivers working in the long-term care industry that I would never have had looking at long-term care benefits from only a product perspective.