Certified Medicaid Planner Designation

Long-term Care Insurance Takes Another Hit

Long-term Care Insurance Takes Another Hit

Private financing of long-term care is becoming even more difficult as companies are finding that their business models are unsustainable. Recent news from Genworth financial indicates that even the largest long-term care insurance provider is not immune.

Genworth Financial offers the most popular long-term care insurance in the nation. Recently, they have begun the most serious review of their product since their start in 1871 – particularly their claim reserves. One plan in particular,
Genworth’s long-term care insurance, seems to be losing popularity among clients. So much so, in fact, that if they cannot acquire regulatory approval for the needed changes, they may have to withdraw from the market altogether.

Genworth is seeking to not only shorten benefit periods, but to also lower day-to-day benefits, and more tightly underwrite policies – as if their standards weren’t already tight. All of these changes are not only making long-term care insurance more difficult to acquire, but increased cost makes paying for it an even bigger challenge. If you are fortunate enough to qualify, you will then have to pay increased premiums, which are likely to be followed by frequent and significant rate hikes as costs skyrocket.

Genworth Financial is not the only company feeling the pain. Other companies like John Hancock have pulled back or have gotten out altogether (e.g., MetLife and Prudential) from the long-term care insurance market.

Medicaid Planning assists those who need long-term care and cannot afford or purchase the insurance or qualify. What most consumers don’t understand is that any uninsured person who needs long-term care automatically becomes part of the Medicaid spenddown – and are required to spend their assets down to a pre-set formula in order to get assistance for their long-term care expenses. Because of the complexity of the formula, many married couples end up spending more than they are required in order to qualify.

For those who have long-term care insurance policies that cannot sustain them because rate hikes have made them too expensive or for anyone who has been denied long-term care insurance coverage because of a pre-existing health condition, a Certified Medicaid Planner™ can help make sure that you don’t pay more for long-term care than the Medicaid rules require. This type of planning can be provided in advance or even during a medical crisis – often helping a family avoid total financial ruin.

 

[1] Genworth Financial Provides Additional Disclosure On Long Term Care Insurance, The Wall Street Journal, July 31, 2014.