The Odds Of Winning At A Casino Are Higher Than Those Of Collecting On A LTC Insurance Policy

The Odds Of Winning At A Casino Are Higher Than Those Of Collecting On A LTC Insurance Policy

broken promises from congress on long-care insurance claims

When I write about the hidden obstacles that consumers face when filing and managing LTC insurance (LTCi) claims, I often cite this passage written by U.S. House Of Representatives Select Committee On Aging:

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.

It came from a report endorsed by 65 Congressional Republicans and Democrats, titled “Private Long-Term Care Insurance: Unfit For Sale?” What’s most bizarre is that it was published in May of 1989! I discovered it (along with other LTCi-related reports) years ago, but only after the U.S. Library of Congress began digitizing Congressional records and making them available to researchers. This short post is just a tiny glimpse inside the deep knowledge base our LTCi policyholder advocacy and claims management company (LTCAE) has built over the years.

From 1978-1987, only a handful of companies sold LTCi, and only 125,000 policies had been sold. But private and federal government investigators quickly grew alarmed by insurers’ questionable practices and found ever-increasing policy language tricks that were likely to scam consumers decades later when they filed claims.

The 1989 Congressional report came after an exhaustive, five-year investigation by the federal government’s General Accounting Office (GAO). The GAO revealed that restrictive language, trick wording, loopholes, hurdles, catch-22s, and various other limitations created so many traps and obstacles that consumers should have no “reasonable expectation” of being able to collect every dollar on their policy.

The most troubling discovery was the sheer degree of customized policy terms (often with terms the insurers had essentially invented) and often contradictory meanings. The Select Committee was all but certain that the insurers were building a system designed to fail. More concerning was the fact that consumers wouldn’t realize that until decades later – when the time came to file a claim. They were right and the ticking time bomb started almost 35 years ago.

The Select Committee was wise and recommended that Congress immediately do one of the following: 1) Enact strict federal legislation to standardize policy terms and language and tightly regulate the LTCi industry, or 2) ban the sale of LTCi completely. But there was one huge problem: the insurance industry contributed more lobbying and “campaign contribution” money than any other industry in the country. The Select Committee’s recommendations went nowhere. They tried again two years later, and those efforts failed again.

Insurance companies across the country saw the enormous potential created by a lack of regulation. They also saw the enormous financial rewards associated with decades of premium revenue before claims would ever come due. The number of companies selling LTCi policies absolutely exploded. Within a couple of years, the number of companies grew from a handful to 120+. The number of policy variations grew even more, as well, with those 120+ companies creating over 400,000 variations.

Another serious complication was that the companies who sold those policies had zero experience in LTC or the greater healthcare industry. They were indemnity insurers who sold property and casualty insurance. And those companies refused to invest in resources and systems to actually process claims and assist policyholders. They left that monumental problem to the future leaders who would be in place years after they retired.

Congress didn’t say that it was impossible for consumers to collect every dollar from their policies. And it’s not. They simply said that the odds of getting your money would be better at a race track or in slot machines. When considering the often-hundreds of thousands of dollars at stake with an LTCi claim, few people would accept those odds.

At LTCAE, we aren’t consumers – the people Congress was so rightly worried about. We are a multi-disciplinary team of professionals who protect consumers. We know the intricacies, hoops, hurdles, and tricks played by LTC insurers. We are dedicated to expediting approvals, maximizing reimbursement, saving families time and frustration, and most of all - delivering peace of mind.

Interesting in learning how we can serve you? Schedule a free consultation today or reach out to us at We’re always here for you. One more thing: Ever wonder where the billions in premium payments went while millions upon millions of policies were sold from the late 80’s to the early 2000’s? That’s a story for another day (hint: executives pocketed much of the money and then abandoned ship before claims came due).

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