February 27, 2008
Letters Editor
The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Letters Editor:
“States Draw Fire for Pitching Citizens On Private Long-Term Care Insurance," (February 26, 2008), represents both unfair reporting and a shallow depiction of the nation's emerging long-term care crisis.
It is unfair because the entire long-term care industry, which is paying out more than $3.3 billion in benefits annually, is depicted on the basis of the alleged problems of a few companies. Its shallowness is demonstrated by a lack of recognition of the threat of increasing Medicaid costs to state budgets fueled by the pending long-term care needs of 78 million baby boomers.
The budget threats prompted widespread support for the private-public long-term care partnership legislation. The data helps tell the story of the seriousness of this problem: Medicaid’s long-term care expenditures were $100 billion in 2007 alone, and rising, the single largest expenditure for Medicaid. For individuals, a one-year stay in a nursing home can cost on average $75,000. That same cost is anticipated to rise to $140,000 by 2030.
The partnership legislation seeks to address both of these concerns. It provides an incentive for Americans to take personal responsibility for their future needs. Consumers who purchase long-term care insurance policies in the program would utilize their benefits as a first step before possibly becoming eligible for Medicaid. To avoid impoverishment, they will be allowed to protect personal assets up to the level of benefits provided by their policy. It is designed to make sure that federal and state expenditures are directed at the truly poor, for whom Medicaid was actually established. Put simply, it's not the states helping insurers in a marketing campaign, as you allege; it’s states taking proactive steps to address a serious concern.
Equally important is that the program helps raise awareness of the steps people need to take to prepare for their potential long-term care needs. While allegations of misconduct by a handful of carriers may give some pause about seeking long-term care insurance, consumers should know that the vast majority of companies offering long-term care insurance take their reputation with consumers seriously and have a strong commitment to customer service. Moreover, the industry strongly supports model laws and regulations developed by the National Association of Insurance Commissioners that help protect consumers’ interests and provide guidelines for the payment of claims.
The long-term care partnership program provides an important vehicle for addressing America’s long-term care issues. It is not anticipated to address all the deep and complex issues involving long-term care. Neither its value, nor the crisis it is designed to help address, should be easily dismissed.
Sincerely,
Frank Keating
Frank Keating is President of the American Council of Life Insurers. He is also a former two-term Oklahoma governor.