The current wisdom is that 70 percent of us will need long term care at some point. Alaska’s long term care is the most expensive in the nation. So long term care financing is on a lot of people’s minds, with good reason. However, if you are thinking about purchasing long term care insurance, it really pays to do the research so you understand the product.
I highly recommend the consumer guides which the state Division of Insurance has on its website at http://commerce.alaska.gov/insurance/Insurance/faq.html#longTerm.
The guides can decipher terms and definitions, so you know what policy booklets actually mean.
I want to describe the top four complaints I hear from Alaskans about long term care insurance policies. My purpose is not to dissuade you from purchasing long term care insurance, but to make you a better informed consumer.
Policies that leave out Alaska
First up are the complaints about policies that appear to pay for in-home personal care assistance, but which have provider requirements that many Alaskan agencies cannot meet, thus limiting policyholders’ access to caregivers.
For instance, the Alaska public retirees’ long term care insurance at the silver, gold and platinum levels covers home health aide care, but only if it is provided through a licensed, certified home health agency. As it happens, most in-home personal care assistance in Alaska is not provided by a licensed, certified home health agency, so policy owners are frustrated to find they can’t just arrange for an in-home caregiver and expect to get their claims paid.
Public retirees who are beneficiaries of these policies can call Barbara Ferguson at the State Division of Retirement and Benefits, (907) 465-5695, if they have these problems. I’m hearing from retirees that she has been tremendously helpful.
Premium increases
Second are the complaints about dramatic premium increases, in some cases over 50 percent. This is an industry-wide problem.
Many insurers underpriced their long term care insurance products, underestimating how many policy holders would submit claims and how fast the cost of services would rise. Additionally, unlike most states, Alaska does not have a regulation requiring insurance companies to submit proposed premium increases to the state for review. Although other states’ rate review processes haven’t solved the problem of rising insurance rates, they at least give consumers confidence that the state believes a rate increase is justified.
Before you buy any policy, check to see the company’s rate increase history. The Texas State Division of Insurance provides some useful information at http://www.tdi.texas.gov/consumer/cpmltchistory.html
Customer service woes
Third are the complaints about insurance companies’ terrible customer service. If your carrier is giving you the run-around, you can make a complaint to the Division of Insurance at (907) 269-7900 (800-INSURAK) or the Long Term Care Ombudsman at 334-4480 (800-730-6393).
Inadequate coverage
Finally, people who bought their policies a long time ago may only be covered for skilled nursing care. Many people do not need, and won’t qualify for, around the clock skilled nursing care. They need custodial care, which means non-professional help with bathing, dressing, eating, elimination and transferring. So a good policy should be comprehensive, covering a range of services in a range of settings, including chore services, in-home care (both skilled nursing and personal assistance), respite care, hospice, day services, assisted living and nursing home care.
If you are interested in becoming a Volunteer Long Term Care Ombudsman, call 334-4480 or 1-800-730-6393.
