WA State Long Term Health Care Drove Insurers Away-Are They Back?

Ever hear of The Gang That Couldn't Shoot Straight?  How about the Washington State Legislature?

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State Plan Chased Insures Away

They're kinda the same thing when it comes to the Long Term Care Act. (LTC)   You may recall many of the insurance companies that provide long-term care insurance left the Washington marketplace.  Because the operational details of the State's mandatory .58% tax on payroll plan were so limited, weak, and unfair that many residents raced to find short-term solutions to avoid being pushed onto the state plan.

Insurance companies knew that many of the policies in the rush of last-minute sign-ups would be dumped after they were used to convince the state that individuals had coverage so rather than be a part of that, the companies left the state.

Residents Get A Second Chance At Real Insurance

Capital Advisor's Wealth Management financial planner Rob Vickers says many LTC insurers have now returned to the state which is good news for individuals who want to apply for classic long-term care insurance vs. hybrid LTC gimmicks designed to avoid the state plan.

The legislature has a chance to fix the plan before it comes back -and it will come back- but don't hold your breath on any significant improvements.

Chances Favor Your Need For Care

Vickers says estimates now show that an estimated 70% of Americans will require some form of LTC in their lifetime.  That means they will need help with at least 2/6 of the activities of daily life…eating, bathing, dressing, transference, toileting, and continence.

Since we'll all have to have it one way or another, what's the real purpose, what's being protected with this insurance?  Rob Vickers:

chiefly, your assets for yourself or for a community spouse.  Your standard of living as well.  Though your standard of living is diminished, you can still choose where to receive that care if you have insurance, resources, or both.

 

 How expensive is coverage

Two words - it’s spendy.  But Vickers adds you can mitigate that cost by applying in your 50s instead of your 60s when you're likely a better insurable risk with fewer health problems.  Savings can also be had by choosing a higher deductible!

If you don't have any assets to protect?  Vicker suggests you would likely be better off to skip it since people on a fixed income will most likely qualify for Medicaid from the state.

Botton Line-Not Everyone Needs It

The takeaway that drives the frustration of all who chafe at the State's LTC Plan is that despite what lawmakers claim the reason for coverage is, the REAL reason is the demonstrable need to protect assets or quality of life for yourself and your spouse   Not everyone needs or should be forced to purchase this coverage.

Vickers concludes:

 if you have assets to protect and can’t self-insure, LTC coverage may be the most valuable insurance you ever own

Capital Advisors Wealth Management financial planner Rob Vickers appeared on morning radio to talk about the need and prospects for Long Term Care insurance.