Solving The Family Crisis Created By Long Term Care Insurers
Long term care financing isn’t simply a numbers issue. It’s a family issue. Similar to all other areas of healthcare, your ability to receive high-quality health care relies on one factor: your ability to pay for it. In long term care more than any other field, high rates of mortality are closely linked to both receiving fewer hours of care than needed and receiving care from lower-qualified caregivers.
When insurers don’t foot the bills as they promised, they impose a crushing burden on everyone. In those cases, 60% of the time a friend or family member ends up devoting 20 hours or more per week to informal caregiving. In some cases, they have no choice but to quit work.
In the remaining 40% of cases, families rely on a combination of adult children funding care and/or winding down their loved one’s savings (often selling their home). Meanwhile, the average person who needs long term care will need it for four years or more.
The cost of long term care in 2022 is projected to range from $64,000 to $112,000, depending on care type (from home health aides to a nursing home room). Discounting the fact that care costs are projected to increase several thousands of dollars per year, that’s a minimum of $256,000-$448,000 for four years.
Millions of people own private long term care insurance policies
Despite being owned by over 14% of people age 65 and over, private long term care insurance (LTCi) doesn’t get a lot of public attention. Primarily because it relates to a need that 7 in 10 people will have, but that no one enjoys thinking about (I admit that I don’t). To a lesser extent, it’s also because out of all the claims insurers expect to be filed, only 15% have come in so far.
When will the rest come? Very soon. From this year until the year 2030, 10,000 people will turn 65 every day. By 2030, the entire generation born between 1946 and 1964 will be that age or older (the oldest being 84). What was once a distant concern is now a present-day issue.
LTCi marketing campaigns focused on two fears and a legal promise to soothe all worries. The first fear they instilled was that the rising costs of healthcare would drive you to bankruptcy, which would then make your children financially responsible for you.
The second fear was that your kids might not be able to afford professional caregivers, and instead would have to feed, bathe, walk, and look after you themselves. The solution they promised was premium care, at a quality level far exceeding Medicaid. They called their policies “Cadillac Coverage.”
People didn’t want to lose everything they ever worked for and they didn’t want to force their children to give up their lives just to take care of them. The marketing push was extremely effective. It was so deeply etched into the minds of consumers that fewer than 1% of people who bought policies ever dropped them.
Broken promises and claims handling misconduct
When it comes time to file a claim, most people are shocked to find that good coverage rarely leads to good reimbursement. In fact, LTCi is the most under-reimbursed type of insurance in modern history. Denials are common, months (or years) of delays are expected, and underpayment of billed expenses is near-universal.
One insurers’ executive boasted in an industry publication that their standard practice is to underpay bills by 1/3 or more, in a “take it or leave it” fashion. Another admitted in court that they routinely stop payments after a few months and force policyholders to file appeals and fend for themselves (knowing some will give up).
The events that insurers promised to protect from are the exact things that are happening to policyholders who paid for that protection.
The root of the problem
When LTCi came into existence in the 1980s, insurers successfully lobbied Congress to keep it free from federal regulation. Instead, they promised to govern themselves. For nearly 20 years, that absence of regulation flew under the public’s radar because policyholders were still young and not many claims had come in.
Years later, in a renewed but failed attempt to implement regulation, The U.S. House Of Representatives Select Committee On Aging stated the following:
At present, the consumer’s odds of collecting off most of these policies are better at a race track, or Las Vegas slot machines. Adequate consumer safeguards are not in place.
Insurers are failing to provide the elderly and other consumers with even a reasonable expectation of getting their money’s worth when purchasing such insurance.
Nowhere good to turn
Families have been left with only two options: 1) file their claims and accept mistreatment and underpayment; or 2) hire an attorney after they’ve been mistreated, spent countless hours on the phone, and lost appeals (all while paying for care out-of-pocket).
As a healthcare attorney, I know that legal action is an effective way to win against insurers. But it’s expensive, it’s reactive, and the legal system is made for recovering losses after they’ve occurred (not preventing them).
Most of all, I believe it’s inhumane for any family to have to spend the final years of their loved one’s life fighting an insurance company.
A new solution to an unmet need
I wanted to create a system that allowed families to prevent denials, delays, underpayment, and inconvenience. I wanted to develop a way for policyholders to get their claims approved and get paid in full, without the need for legal battles. I also believe that health decisions are best left in the hands of families and healthcare professionals and that the best value I can provide is to prevent insurer interference to increase their ability to do just that.
For several years, I studied evidence from the growing number of lawsuits against dozens of insurers (including employee testimony & claims handling manuals), government investigations, and interviews with both families and providers. I discovered that nearly all of the insurers’ deceptive practices can be bypassed with the right strategy and preparation.
Equipped with that knowledge, I made a blueprint, designed processes, and implemented technology that accomplishes three primary goals: 1) expediting approvals, 2) unlocking full benefit payments, and 3) managing ongoing bills.
Alongside Registered Nurses, I opened The Long Term Care Advocacy Experts (LTCAE) in 2018. We’re a patient advocacy and professional LTCi claims management service; not a law firm. If a family chooses to hire us after a free consultation, our concierge service manages every aspect of the claim from start to finish. You never have to call the insurance company or worry about getting the right documents from caregivers or primary providers. By getting claims approved up front and avoiding disputes, our services are a fraction of the cost of legal action.
Figuring out how to pay for long term care is very important, but it should be second to you finding the best caregivers and ensuring that your loved one is safe, comfortable, and well taken care of. We provide peace of mind by letting you do exactly that and making sure your insurance company keeps its promises by footing the bill.