Here's the Real Question The Wall Street Journal Should Be Asking

Yesterday The Wall Street Journal published the article “Should You Purchase Long-Term Care Insurance?” Actually, it was a debate between two people. Mark Meiners, a professor of health administration and policy at George Mason University, argued in favor of long-term-care insurance. Prescott Cole, a senior staff attorney at California Advocates for Nursing Home Reform, argued against. I feel compelled to respond because of Mr. Cole’s misrepresentation of the facts about long-term care insurance.

Much of Mr. Cole’s argument seems based on the belief that most care is still done in nursing homes. However, the facts are that over 85% of care is now received outside of nursing homes, making much of his argument moot. Nursing homes are one of the myriad care options available to those with long-term care insurance, but most claimants now prefer care in settings ranging from the comfort of their own home, to adult day care, to assisted living facilities and more.

Instead of asking “Should You Purchase Long-Term Care Insurance?” a better question is “What Is Your Long Term Care Plan?” because that’s what this argument really boils down to. It’s not the risk of experiencing a long-term care event; it’s about the consequences if it does happen. Insurance can’t prevent the risk, but it can help your caregivers manage the consequences.

Let’s face it, when you need care, someone will provide that care, most likely a family member. So, it becomes a matter of how providing your care will affect their health, finances and emotional state. Numerous studies have shown that family caregivers experience a higher level of physical fatigue and are more prone to illnesses. They experience almost double the normal rate of depression as they try to juggle work, their own family and your care. Family caregivers also experience financial difficulties as they work less, lose job opportunities, and pay out of pocket for some of the expenses of your care. Also, for a spouse, any money they spend on your care now is that much less that they can rely on for their own future needs. An insurance plan might not completely eliminate any of these stresses on caregivers, but it may reduce them to a more manageable level.

Mr. Cole also claims that in “the game” of long-term care insurance, you are playing with a “stacked deck.” What he fails to realize is that some of the insurance options available can stack the deck in your favor. For example, the shared-care option with many policies allows two people to share the risk by linking their benefits together. If one exhausts their policy benefit, they can use some or all of the spouse’s policy. Another option is to select a policy that links long-term care benefits with an annuity or life insurance policy: a win-win proposition. If you ever need long-term care, the policy will pay for the care, leveraging your premiums to many times your initial investment. If you never need care, your heirs will receive a death benefit from your plan. Linked benefit policies eliminate the “if I never use it, I lose it” argument.

As medical advances help us live longer, many of us will need some form of long-term care. The time to plan for how you will handle that eventuality is while you are younger, are in good health and have options. Like any kind of long-term strategy, you should first educate yourself on the options available to you, and then work with an experienced professional to make an informed decision. That way, whether you choose to insure with traditional long-term care insurance or one of the linked benefit policies, or you self-insure using your own money, you will go into that decision knowing all the pros and cons of your decision, and know how it will affect not just your care, but the lives of those around you.

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