Here comes the next health insurance crisis

Seniors with long-term care coverage, which Obamacare doesn't touch, are getting a double whammy of premium hikes and benefit cuts.

By Aimee Picchi Jul 2, 2013 12:53PM

Medical doctor with elderly woman in wheel chair (© Creatas/SuperStock)Back in the 1980s and 1990s, insurers offered long-term health-care policies designed to cover nursing homes or in-home care as their clients aged. The only problem? Insurers underestimated the ramp-up in medical costs, as well as how long their customers would live. 

Now, seniors are getting hit on two fronts. Not only are long-term insurers increasing their rates, but many are also cutting back on benefits. On top of that, only about a dozen companies are still selling "meaningful numbers" of policies, down from about 100 just 10 years ago, The Wall Street Journal reports.

For better or worse, long-term care insurance is one area of the health care industry that the Affordable Care Act won't touch, at least for now. That's something many consumers are confused about, according to the American Association for Long-Term Care Insurance (AALTC).

The health care insurance overhaul that goes into effect in 2014 is designed to provide insurance for most if not all working Americans, but President Barack Obama's plan doesn't include long-term coverage. However, a congressional commission is examining the issue, the AALTC notes. 

In the meantime, policyholders are dealing with the stresses of rate bumps and benefits cuts. 

Take Rob and Katherine Deane, an older couple profiled by The Journal. Manulife Financial's (MFC) John Hancock division told them their premiums would jump by 25% and 77%, respectively. After the couple complained, the company reduced that 77% hike to only 46%, but the policy's benefit period was whittled down to six years from its previous 10. 

Genworth Financial (GNW), which holds one-third of the market for long-term care policies sold to individuals, stopped selling through AARP last month, and it said in May that it would hike premiums for its oldest policies by more than 50%. 

That's tough to swallow for a lot of policyholders, who are worried about the skyrocketing cost of nursing homes. Medicare pays for only short stays, and the median annual rate for a nursing home room in 2013 is almost $84,000, according to Genworth.

As retired surgeon Rob Deane told The Journal: "Seniors are really getting hammered."

Follow Aimee Picchi on Twitter at @aimeepicchi. 

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Jul 2, 2013 3:53PM

Its all a bunch of Crap Nothing is affordable or free, Folks are going to be

in for a big surprise. Hell they cant manage Medicare or Social Security

How does anyone think they can run Health Care.

Jul 2, 2013 3:46PM
Exactly what should we expect given the very large donations made by and on behalf of insurance companys to the Democratic Party. Never trust a Liberal to do anything that doesn't benefit him/her directly.
Jul 2, 2013 3:34PM
What the real problem is: Insurance companies don't want to pay for aging care and hospitals prey upon those that are elderly. It's a double whammy if you're old or supporting someone who is. I've seen first hand where they take advantage of the elderly - IF THEY KNOW THAT THEY HAVE INSURANCE. My mom was in the hospital, she was trying to sleep when a woman walked in and said "hi, can I have you raise and lower your arm for me?" She did it without asking why. She trusted the hospital worker. SHE WAS THEN LATER BILLED $700 FOR A "PHYSICAL THERAPY" SESSION!
Jul 2, 2013 4:35PM
when I get old and sick, just dress me in a dog costume and take me to the vet.
Jul 2, 2013 3:39PM
Why does a person take out a "long term insurance" policy which allows the insurer to increase premiums and decrease benefits, basically at the insurers whim? Is this all that is offered by the insurer?
Jul 2, 2013 2:56PM
It appears that things will get worse, with or without Obamacare.  The industry has us by the balls.  My Mom is 85 and hanging in there, has one of those good policies.  When I get up there, my guess is that there is no way I could pay, and I'd rather just sign off than to put my kids in debt, etc.  So, my fate will likely be to just do myself in... might be best for everyone.  Sometimes people really live too long. 
Jul 2, 2013 2:57PM
If there are is going to be premium hikes and benefit cuts. Why does the media show a picture of an elderly lady smiling along with a big smile for the women she's with, daughter maybe ! What's wrong with the media portrayal of this problem ?
Jul 2, 2013 2:35PM
THE issue is that the insurance companies continue to screw us. As soon as they figured out that the Affordable Health Care Act did not cover this part of health insurance, it was like vultures pouncing on a carcass.  " Raise the premiums, and cut the benefits"?  How's that sound?  Of course you will here that there are many " factors" in these" adjustments".  So many " factors" that you might become confused as to the real reason this is happening, but it is just an old fashioned screwing. 
Jul 2, 2013 4:29PM
It's not all about the insurance companies. Healthcare is broken from all directions. Should the nursing home owner be allowed to make millions per year? Should the surgeon who operates on someone knowing it is not going to improve their quality of life be allowed to make millions per year? Should the lawyers who make millions by filing frivolous lawsuits be allowed to make those millions when the actual people being harmed get a pittance? And finally, should insurers be allowed to raise rates in order to show a profit to stock holders? Well, nobody complains about McDonalds showing a profit. Why not the insurance companies? If you look at it logically, the insurance company is the ONLY one watching your wallet. If they can keep claims down, then they don't need to raise rates as high. But government mandates have them in a stranglehold. And waste, fraud and abuse are killing the system.  I'm an independent insurance agent, and I see no future for our healthcare system without complete government control- unless everyone is willing to give a little to help what has become the largest crisis facing our country. And just remember, with government control, rationing is sure to follow. Just my view- I could be wrong.
Jul 2, 2013 4:51PM
Do people not realize that one day that is going to be us?
Jul 2, 2013 6:49PM
Health care costs in the U.S. are twice that of other developed countries and they are beating us in life expectancy and care. we are the only developed country in the world that dosnt have national health care. Our political parties and our corporate media have brainwashed into accepting our current unsustainable and overpriced model, a model that puts profit first, second and third and patients dead last.
Jul 2, 2013 4:10PM
This may surprise many of you but insurance companies are also the victims of this health care mess.  You conservatives need to chill out.  There is literally no price regulation when it comes to what a hospital charges you, that is why medical bills can vary so much.  Get mad at the non-for-profit hospitals that turn 80 million a year in profit.  They charge you whatever they feel like and nobody is telling them they are wrong.  Insurance companies try to negotiate down but the settle for a 40% discount when the markup can be 300%+.  They consumer has no power because you really can't "shop" around for an ambulance/emergency room.  Insurance companies are consumers in the health care market, they just subsidize it for you for a monthly fee.  Get a brain and stop watching fox news.   Obamacare sucks because it does nothing with price regulation, bet you didn't expect me to say that.
Jul 2, 2013 4:47PM
The last thing a senior needs is for someone to tell them "Listen up, I know you're all sick and can't help yourselves and are basically a captive audience but I'm from the government and here to help"

You want to talk abuse of the elderly?  That's it right there.

Jul 2, 2013 4:27PM
Well it would appear that this insurance was not "untouched" by obamacare, but rather that the price went up because of it (like much of the other health-related insurance policies).
Jul 2, 2013 3:59PM
Single Health Care System for All Americans
Jul 2, 2013 5:29PM
I  hope   to   check   out   in  a   planned   and   orderly   fashion  long   before   I   reach   old   age  and   frailty.   Why   so  many  people   watch   themselves  deteriorate    into   dependency   has   always   been  a  mystery   to  me.   And   I'll   have  no  part  of  it.
Jul 2, 2013 5:10PM

This is all just crazy.  I mean at some point, its going to make more sense to make a real effort to live a healthy life.  No fair! 


But until then, give me some beer, wings, weed, and a big screen tv!

Jul 2, 2013 5:15PM

Most premiums are in the $25,000.00 range per year.Some are higher.The cost of an bed in an nursing home for the year is nearing $100,000.00.It is an no win situation for anyone.The carrier has to go up,the nursing home has costs going up all the time.Thus the insured has to pay more.Your just touching the ice burg.Good Luck.


Jul 3, 2013 7:56AM
So if you are here illegal everything is free, but people who worked here their entire life and now need help in the senior years are getting screwed.  Amazing - did we vote for these people??? 
Jul 2, 2013 6:53PM

"The health care insurance overhaul that goes into effect in 2014 is designed to provide insurance for most if not all working Americans"  This is just an outright lie!!!


It requires everyone to PURCHASE health care insurance.  That's a far cry from providing it.


If you can't afford it, you will then be fined for not complying.  It's a joke, just like everything the government gets involved with.  

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