Camas resident Anna Miller discusses the many things we’re not told when we purchase Long-Term Care Insurance
Editor’s note: Opinions expressed in this letter to the editor are those of the author alone and do not reflect the editorial position of ClarkCountyToday.com
So, you meet with an insurance agent (salesperson) from a well-known and trusted company. After several hours of discussion, you choose the plan that suits you best. The salesperson informs you that you will pay $1500 a year. Your spouse signs up also. His yearly premium is $1500. Whew, at $3000 a year, it’s expensive! However, you think it will be worth your peace of mind and protect your heirs by not burning up their inheritance on medical bills for your care. You pay a yearly premium of $1500.00, and the Insurance Company will pay up to $147,939.00 for your medical care for up to three years. You are assured that the average person only needs Long-Term Care for no longer than three years.
You faithfully pay the premium on time for years. One day you go to your mailbox to find a four-page letter from your insurance company. Bad news. Your premiums are being increased. Gulp. It’s a big hike, but you are still willing to pay for it for peace of mind. But here is the thing that is annoying. The sales agent did not mention that the insurance company could petition the Insurance Commissioner every three years for permission to raise the premiums on your plan.
Fast forward. Since that first four-page letter in the mailbox from the insurance company, you have received that four-page letter, every three years. More bad news each time. Premium increases.
The Insurance Company out of an abundance of care for you (sarcasm – and likely legally forced to do so when they get permission to raise your premiums) will make a deal with you.
Option 1; Your yearly premium goes from $1500 to $2,693.78 and the monthly benefit of $5,923 will stay as is, along with the total amount they will pay over a 3-year benefit period of $147,939.00
Option 2; Reduce your annual inflation rate from 5% to 3%. This can result in your monthly benefits not keeping up with inflation and your policy limit may run out more quickly due to the higher costs of your care. That’s what the insurance company is betting on here, in my opinion. However, your yearly policy premium increase is lower at $2,072.14 and your policy limit of $147,939 remains the same.
Option 3; Reduce your Monthly Benefit (MB) from $5,923.00 to $4,555.00; a reduction of $1,368 per month. Also, a reduction in the amount the insurance company will pay (policy limit) from $147,939.00 to $113,783.00. A reduction of $34,156. With this option the yearly premium is $2,071.84.
Option 4; Paid Up Policy. You get a $5923.00 monthly benefit. No premium payments. No benefit period. No inflation option. Here is the kicker. Your policy limit (threshold) goes from $147,939.00 to $43,465.26. So, the insurance company will pay $5,923 a month until you reach $43,465.26 in care costs. That won’t last long.
Option 5; Buy Out. No premium payments. No benefit period. No inflation option. No policy limit.
The policy is cancelled, and the insurance company pays you a check for $17,782.54. You no longer have any long-term care benefits. But hurry! This is a limited time offer. Fill out the forms and sign on the bottom line and mail them back right away!
Who do I get mad at? Do I get mad at all? The Insurance Company for doing business like a for-profit business? The Insurance Commissioner for approving big increases on the elderly every time the insurance company comes calling? The salesperson who failed to mention the four-page letters that will start coming when you reach a certain age. (The fact that they start as you become elderly, is just a coincidence, I’m sure. Right?)
Like the cowboy said, “there’s a whole hell-of-a-lot of things they didn’t tell me when I hired on with this outfit.”
Anna Miller
Camas
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Same thing happened to us. Premiums kept increasing while benefits decreased over a 25 year period. Started at $87/month for each of us, last premium hike would have been around $500/month each. Rapidly reaching the point we would no longer be able to afford the premiums. Took the buyout and invested the money in other products. The insurance company made lots of money on our investment.
You blame the State of Washington for passing law-after-law and regulation-after-regulation that make long-term care more expensive, and possibly for a failure of adequate consumer protection.
There may be an option six, if the insurance company will honor it. Move to a different state where long-term care is more affordable and transfer your policy there. If the insurance company will honor a transfer, it may help preserve the money you’ve put in while reducing your rates (or at least reducing the increases).
Anna, I know you love the area, but I do not see the immediate relief you need coming to Washington in time to help you.
DON’T DO IT!! “Insurance” of every kind is nothing but a big scam anyway, but this is the WORST! First of all, Long-term care insurance DOES NOT EXIST. That’s because Long-term care DOES NOT EXIST.
What they’re doing is selling you LIFE INSURANCE with a writer? whatever they call it like an addendum they just incorporate it into the policy, you pay the (ridiculous) premiums to the LIFE INSURANCE policy,a small portion of it goes to where it would normally go life insurance doesn’t cost very much. The rest goes into this fictitious “fund” – not into an account that earns interest or reinvests-you don’t even have control of it or access to it. You can bet THEY are making money from it though! Fast forward to when you’re old enough or disabled enough to tap into it, stay with me here…..You’re on your own far as finding providers, hopefully being able to negotiate for reasonable rates. Remember these are NON medical services only. Then you’ll have to pay upfront out of pocket. Submit your receipts and hope it’s a qualifying expense so you can reimburse YOURSELF with YOUR MONEY that you’ve been paying into all this time.
You could just keep your money, and have an account earmarked for just that purpose, when the time comes use that account to pay for things. The whole idea for insurance, when it works the way it’s supposed to is: PAYING YOUR PREMIUMS GIVES YOU ACCESS TO THOSE PRE-NEGOTIATED CONTRACTED RATES!! Those rates are very low because they’re group rates so basically it’s the difference between wholesale and retail.
Might be ok to pay for a housekeeper to come twice a week, you could probably negotiate a reasonable price for that. Buuuut…….don’t even get me started on the assisted dying facilities. They don’t charge you monthly rent, they take everything you have left and call it a “deposit” for room & board. If you remember nothing of what I’ve said, remember this: THERE IS NO SUCH THING AS LONG-TERM CARE and ASSISTED DYING FACILITIES MAKE THEIR MONEY (BILLIONS) from guess what? TURNOVER. Let that sink in. Every time they call an ambulance to take someone to the ER, they have zero intention of that person returning, they’re already on to the next.
I’d swear on a stack of Bibles this is true. I witnessed it for myself and lost my brother because of it.
P.S. I have a big problem with the “WASHINGTON CARES” tax coming out of my check! No they don’t! (care) Because if they did – someone would be out there negotiating rates and contracting with reputable providers who actually agree to accept those rates (sometime in the future whenever I need them to?) yea right that’ll happen! NOT