"WHAT HEALTH CARE ADMINISTRATORS SHOULD KNOW ABOUT SOUTH CAROLINA

LONG TERM CARE INSURANCE!"

When a disaster like a hurricane strikes, the news media is saturated with stories reporting billions of dollars in damage and the impact it will have on the insurance industry. If not for insurance, the home and business owners would be financially wiped out.

Yet there is little attention paid to the future cost of one of the largest financial disasters facing the country—and the role played by insurance. What is this coming financial disaster? The future cost of long-term care.

Fact is, according to the National Association of Insurance Commissioners (NAIC), insurers reported actual cumulative ‘incurred’ claims of $11.1 Billion through the year 2000. In 2002 and for the first time in history, over 1 Billion was paid in claims for a single year, an amount expected to grow as policyholder’s age. A more recent study from the number one Long Term Care insurer reports over 2.3 Billion in claims paid, a figure that grows by over 1 Million per day. This insurers longest claim paid to date is 14 years and growing with over 1 Million paid in benefits to date for this single claim.

I’ve spoken with many Health Care Administrators about Long Term Care Insurance, and have gotten mixed results. This is not surprising because at last count there were over 100 companies offering Long Term Care Insurance; however, the top three companies issued over 50 percent of all premiums collected. The bottom line is that some companies are better than others at insuring this risk and paying claims in a timely manner.

Some helpful hints in choosing Long Term Care insurance include the following:

1-Buy early because the premiums are locked in at your current age; however, most companies can raise rates if they do so by class and in a given state. Also, the younger you are when you purchase, the better your chances of getting a policy issued because of health underwriting.

2-Stay with the top companies that have experience in this marketplace. These companies are more likely to be around later to pay your claim.

3-Use a Long Term Care specialist to shop around for the best deal among the top companies. An independent Long Term Care Specialist can represent several companies, unlike a career or captive agent who is bound to sell you just one company’s product.

4-Read the NAIC Shoppers Guide to Long-Term Care Insurance. This guide is published by the oldest association of state government officials consisting of the chief insurance regulators in all 50 states, the District of Columbia and four U.S. Territories. This guide will act as a source to answer most of the questions posed by consumers and provides many more shopping tips to aid in this often-complicated decision. *

What role can you play? Promote education and awareness to those who can still plan for long-term care. Have your admission directors talk to the family members and responsible parties and ask them what their plans are in the event of long-term care. Do they have Long Term Care Insurance? They will be more likely to consider this planning option once they have experienced long-term care with a family member.

The bottom line is that Long Term Care Insurance is good for your industry. Good polices will enable your resident to remain private pay for their entire long-term care stay. The families will not have to deplete their assets and depend on Medicaid to pay for their loved ones care. The end result is that you will have more private pay residents, a win-win for the resident and the long-term care industry.

J. David Scott is President of Long Term Care Benefits, Inc., an independent Agency he founded in 1987 to specialize in Long Term Care Insurance. Long Term Care Benefits, Inc. is licensed in multiple states and acts as a Managing General Agency, recruiting, training, and supporting agents who desire to specialize in this field.

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The information contained herein is for educational purposes only and does not constitute investment, financial, tax or legal advice. Further, this information is general in nature and is not intended to be reflective of any specific plan. Please contact your personal investment, financial, tax or legal advisor regarding your specific needs and situation.

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