Experts: I-2124 Will “Demolish” Long-Term Care Benefit
Analysis of Consumer Complaints Shows the Pitfalls of the Private For Profit Insurance Market
Press Release from We Care For WA Cares and the Washington State Budget and Policy Center:
At a virtual media briefing today, experts in the fields of long-term care finance and public health insurance explained why making Washington’s long-term care benefit program voluntary through Initiative 2124 would have the effect of decimating it financially.
Fact Sheet on Fiscal Impacts of I-2124
Members of the We Care For WA Cares coalition that has championed WA Cares, the public long-term care benefit millions of working Washingtonians began vesting in last year, also released an analysis of consumer complaints about corporate long-term care insurance that have been filed with the state’s Office of Insurance Commissioner.
Bonnie Burns, a national expert on long-term care financing and consumer advocate with California Health Advocates, said: “If Washington’s program is made voluntary through passage of Initiative 2124, the program will collapse financially, taking away the support for many Washingtonians who will likely need care someday,” said
Jessica Gomez, manager of the We Care For WA Cares coalition, said: “I-2124 is a wolf in sheep’s clothing. Voters deserve the facts. I-2124 would take away a critically needed safety net for 3 million working Washingtonians to help pay for home modifications, medical equipment, meal delivery and home care in the likely event they need support as a result of a serious injury, illness, disease or other challenges that can happen at any age.”
Norma B. Coe, former UW School of Public Health Professor, current Associate Professor at University of Pennsylvania and Director of Research at the Leonard Davis Institute, explained: “Making long-term care insurance voluntary will guarantee that it is unsustainable. Premiums will rise, take-up will drop, and the cycle will continue until there is no longer a program. This is not a vote about voluntary participation; this is a vote about the program’s existence.”
Misha Werschkul, Executive Director of the Washington State Budget and Policy Center said: “Initiative 2124 is misleadingly framed as a small change to the Washington Cares program. The actual impact should I-2124 pass would be to defund Washington’s long term care benefit program and shift long-term care costs to the taxpayer-funded Medicaid program.”
Judith Bendersky, MPH and certified health education specialist who has extensive experience with public health insurance counsels consumers about resources for aging and long-term care support, said: “Long-term care is one of life’s biggest expenses that no one wants to think about or plan for. Everybody wants to stay at home and remain as independent as possible, and that is what Washington’s long-term care benefit aims to help with. Initiative 2124 is misleading and would rollback years of progress to protect our health and our economy.”
I-2124 backers say consumers should pay for long-term care from their own savings and look to the private marketplace for insurance to cover the costs of their long-term care needs. The typical American has $1200 in their savings account, and according to data from the National Council on Aging, 80 percent of older adults would be unable to afford two years of long-term care. Only about 3% of people nationwide have private long-term care insurance as a result of several factors: most people don’t think they will ever need care (even though 70% of us will), wrongly believe Medicare will cover long-term care, can’t afford the expensive premiums (average $2,000 to more than $8,000 a year depending on the policy for a 55 year old couple, with premiums due even after retirement), or would be denied a policy because of a pre-existing condition (about half of us).
A new report analyzed hundreds of consumer complaints filed July 2021 - July 2023 with the WA State Office of the Insurance Commissioner, supplementing a similar analysis of complaints filed 2015-2021.
Analysis of WA Consumer Complaints About Long-Term Insurance
Consumers who buy private long-term care insurance commonly experience:
unaffordable hikes in long-term care insurance premiums,
forced benefit reductions,
difficulty accessing benefits that they have been paying for for years,
policy denials based on preexisting conditions,
claim denials based on complicated and unclear bureaucratic processes, and
barriers to communicating with their insurance companies.
Kim Allen, a patient advocate in Seattle, shared: “Most of us don’t realize how important long-term care is in a financial plan, until we’re approaching retirement. I researched long-term care insurance in order to protect my retirement savings. I applied and was rejected for a long-term care policy because of my pre-existing condition. Unlike healthcare insurance, long-term care insurance companies can avoid serving people with pre-existing conditions like me. Even though I have the financial ability to buy private LTC insurance to protect my nest egg, I was denied coverage.”
Gifford Jones, a retiree in Seattle, shared: “When my wife and I bought our policies about twenty years ago, our combined premiums were about $5,000 a year. Every few years they increased substantially. By 2022 they had more than doubled to around $12,000. To date, I have paid $110,619.61 and my wife has paid $52,055.17 for our policies. They have you against a wall, you either have to meet the premium increase or take a reduction in your benefits. They win if we stop paying, they keep our money and we don’t have any benefit when we need it. We are fortunate that we are in a financial position not to be wiped out by these increases, but it doesn’t feel financially ethical. If I make a big fuss about it, their threat is ‘insurance companies have left, gone bust, this is what we have to do to remain in business to guarantee your insurance’.”
Philip Christofides, of Walla Walla, shared: “My mother’s big wish was to never be a burden to anybody. She had purchased a long-term care policy twenty five years before she needed it. But we found in the fine print there was a daily maximum which we ran up against quickly, and that the benefit did not increase with inflation. We ended up draining her money and our own to take care of her.”
To learn more about Initiative 2124 visit www.noon2124.com or speak with experts on long-term care, insurance, and impacted consumers: Press@NoOn2124.org
