A column two months ago about long-term care insurance drew many questions from interested readers. I called up Jesse Slome, the executive director of the American Association for Long-Term Care Insurance, to get expert answers for some of them.
One reader wrote:
dementia. Long Term Care Partners LLC gave us a start date for our claim in October 2011, but despite 60 pages of documented payments made by Medicare to various hospitals and rehabilitation facilities since the start date, they are still reporting that we have not met their 90-day waiting period before benefits can begin."
First of all, the American Association for Long-Term Care Insurance can help individuals having problems with claims. Contact them at 818-597-3227 or http://www.aaltci.org/contact/.
Secondly, Slome says to make sure you read the fine print when you sign up for care, as it varies quite a bit from policy to policy. In order to meet the condition for "long-term" care, you must need help with the activities of daily living for 90 days. However, let's say a doctor recommends that you have care only two days a week. One policy might count that entire week toward the 90 days, while another policy might count only those two days -- meaning that it might take almost a year to reach the term.
Another reader, "age 78 and healthy," wondered how to find low-rate coverage. "We had been paying $500 a month but had to cancel due to being cash-strapped in retirement," the reader explained.
Slome considers $500 a month to be high. Each year, his association studies the price of a middle-of-the-road plan that pays out about $180,000 for an individual or $300,000 for a couple, indexed to rise with inflation. For new enrollees at age 65, the median price is about $4400 annually for a couple. Coverage is available for those who are older, but the medical exams will be very thorough.
That said, several providers have raised premiums recently. In the case of a rate increase, it may be possible to negotiate your benefits down and keep the same rate, for example by lowering the inflation index from 5 percent a year to 3 percent.
A reader with fibromyalgia and some back issues wrote worrying about the outcome of her medical exam.
Slome says that the "sweet spot," or best time to sign up for a long-term care policy, is between your mid-50s and age 64. That's because, at 65, everybody goes in for a Medicare qualifying exam, which may turn up new problems. Before you sign up for the insurance exam, make sure you're up-to-date, taking all medications so that indicators like blood pressure and cholesterol are as good as possible -- Slome admits he himself is a "bad boy" when it comes to this -- and that you haven't been smoking.
Finally, a reader noted with worry that insurers seemed to be getting out of the business of writing long-term care insurance policies. Met Life, for example, stopped offering these policies in 2010.
Slome says it's undeniable that the business of long-term care insurance is currently in flux, partly due to historically low interest rates. Keep in mind that, even if no new policies are being written, the company must honor current policies. Three insurers that he recommends as being committed to the business and having the volume to sustain it are Mutual of Omaha, John Hancock and Genworth Financial.
He also says that in order to find the best plan, you need to find a qualified agent. You should look for someone who sells 20 or more long-term care policies a year; who represents 10 or 11, not 2 or 3, of the leading companies; and who has clients who have gone on claim (meaning the agent has probably been selling the policies for several years).
Don't be afraid to ask a prospective agent directly whether he or she meets these specifications.
(Anya Kamenetz' latest book is "DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education." She welcomes your questions at email@example.com)