Insurance art

Julie Meyers deals in long-term care insurance.

She didn’t when she tried to buy it for herself years ago.

Meyers was then in her 40s and had a terminally ill mother with dementia and no real long-term care plan. That motivated her to investigate options for her own future. Having not entered the insurance business herself at that point, Meyers went through her sister-in-law, seeking a policy that would cover her care at home or in a nursing facility. However, she was starting to show symptoms of multiple sclerosis. Insurance companies pulled Meyers’ medical report. She was denied.

“So I became pretty passionate about the importance of long-term care insurance earlier on in my life because I’m a perfect situation of somebody who wanted to get it but couldn’t,” says Meyers, who now owns Julie Meyers Insurance Solutions in Lancaster.

The percentage of people being turned down for long-term care insurance has increased in recent years.

“It’s not just a matter of having the funds to pay for it,” she says. “The healthier you are the better options you are going to have for long-term care (insurance). It’s one of those coulda-shoulda-woulda situations. If you wait too long, you aren’t going to get it.”

Thinking about looking into it? Here are some things to know.

What is it?

The Pennsylvania Insurance Department’s primer on long-term care insurance at describes it as “insurance used to pay for services that assist an individual who is no longer able to adequately or safely perform daily activities for an extended period of time due to age or disability.” Some plans cover care at home, some in facilities and some in both.

Who has it?

Not a huge chunk of Americans. Only about 3% to 4% of Americans over 49 pay for a long-term care policy, according to Limra, a trade association for the financial services industry.

Why look into it?

“People think Medicare is going to cover them long term and it does not,” Meyers says. “Medicare only covers 100 days in a skilled nursing facility. And after that you pay 100% of the cost. An average day in a skilled nursing home is, I think, between $300 and $400 a day. And it may now be even higher than that.”

Some clients know they’ll need to look beyond their families for support.

“And some of these people have taken care of sick parents and they don’t want to be taken care of by their children,” Meyers says. “I have seen that side of the coin.”

Who in particular should look into it?

The primer suggests long-term care insurance as something to consider for people who: own assets of at least $30,000 (not including home or cars); have an annual retirement income of at least $25,000 to $35,000 as an individual or $35,000 to $50,000 as a couple; and can pay the premiums without financial difficulty.

Who sells it?

Several Lancaster County insurance agencies say they don’t offer it — including a couple who have it listed on their websites. The New York Times reported in November that the number of insurers dealing in long-term care dropped from more than 100 to fewer than a dozen by 2020. The American Association of Long-Term Care Insurance lists six insurers who are still doing stand-alone long-term care policies. That leaves agents with fewer choices to peruse when looking for options for clients.

What age is best to look into it?

A little over 47% of applications made by people between 70 and 74 were denied, according to the most recent figures posted on the website of the American Association for Long-Term Care Insurance. Denial rates for other age groups on the same chart were: 38.2% for 65 to 69; 30.4% for 60 to 64; 20.4% for 50 to 59 and 12.4% for 40 to 49, per that report.

Who is getting policies?

The association reports 6% are 40 or younger; 11% are 41 to 49; 78% are 50 to 69 and 5% are 70 or older.

What does it cost?

That varies greatly.

“I have some clients that pay about $50 for a limited policy,” Meyers says. “I have other clients who are probably paying close to $400 a month.”

The American Association for Long-Term Care Insurance runs an annual price index that examines plans in depth. You can see that at Price tags are a lot different for men and women. On average, men are less expensive. Women statistically live longer.

Plans also vary depending on what benefits one’s after.

The association looked at the top three selling long-term care insurance companies and here’s what people would pay this year for a $165,000 initial pool that would grow 3% compounded annually.

A couple both 55 years old would pay an average annual premium of between $5,018 and $6,321 per year. A couple who are both 65 would pay between $7,137 and $8,493.

“You can start with a budget of $50 to $100 to get established (with a smaller benefit) and add a point to your plan that will allow the amount to grow as you become more financially stable,” Meyers says. “You don’t have to start off big with a $200,000 or $300,000 long-term care policy. Usually that’s what somebody’s going to look at if they’re a little bit older.”

Is Pennsylvania doing anything new on this front?

State Rep. Ed Neilson, D- Philadelphia, last year introduced a bill that would establish a long-term care fund. If it were to pass, Pennsylvania employers would withhold 58 cents out of every $100 earned. That would establish a fund that could be accessed by people who pay into the program for 10 years (three if they experience a catastrophic disabling event) allowing them to access $100 per day up to a $36,500 lifetime limit.

Neilson’s proposed legislation has not made it out of committee.

The 58 cents and the lifetime limit he proposed are identical to legislation that was adopted in Washington in 2019, which has many critics including some who say the $36,500 is not enough to be meaningful.

What else should I know?

Everybody is different and so are the plans. The fine print is important. Look especially at how long you’d have to pay in before being able to use it. Shopping around is key.

“My husband was qualified to get a plan when I started in this industry,” Meyers says. “So we did sign him up for a plan and we were able to get me added to his plan as a rider even though I didn’t qualify for a plan on my own.”

If she were to become disabled to a point where she needs it, and he’s using it, she could, too.

“So there are some options for people who don’t normally qualify on their own,” she says.

What if I never use it?

“We pay home insurance, and we don’t use that half the time,” Meyers says. “When you look at the future, granted, maybe somebody does pay $40,000 or $50,000 over the course of their lifetime for a long-term care plan. But if they get a $300,000 benefit out of it? That’s a pretty good investment.”

Financial advisers are a hurdle in her world, she says.

“Financial advisers tend to talk us down and tell people ‘You don’t need that. You can self-fund yourself,’ ” she says. “Well, we don’t work all our lives only to get to the end and have to spend it all on long-term care. Insurance is insurance. It’s risk assessment. And people have to determine if it’s worth the risk to them.”

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