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Long term care insurance, a form of insurance purchased to pay for the kinds of care generally required in old age such as nursing homes, in-home health care and assisted living facilities, may not provide the peace of mind that had been intended due to high costs, the increasing shortage of caregivers and questionable insurance coverage.

High cost

Long term care insurance premiums have skyrocketed over the years due to the increasing cost of healthcare. While many Americans purchased long term care insurance in the 1980’s and 1990’s, most have seen their premiums double and triple since they purchased their policy.

Many older policyholders who purchased long term care insurance while they were working have reported having to let their policies lapse because they simply could not afford the increased premiums since retiring and trying to live on a fixed income. Others, who can barely afford to continue their coverage, report feeling nervous about canceling the policy as they may not be able to find, or afford, coverage elsewhere because of the age.

Shortage of caregivers

As the baby boomer generation continues to retire, the need for caregivers also continues to rise. According to the U.S. Department of Health and Human Services (DHHS), the number of people needed as caregivers (which includes all types and levels) will reach 2.7 million by the year 2010. It will more than double to nearly 6.5 million by the year 2050. There is already a shortage of nurses in this country and the DHHS predicts that the shortage will continue to increase to over 1,000,000 by the year 2020.

Questionable coverage

Nearly every insurance company offered long term care insurance 15 years ago. It was a hot commodity. However, due to unforeseen increases in healthcare costs, many insurers quickly realized that this form of insurance might cause them to lose money down the road. Slowly, but surely, many insurers began to sell their long term care books of business to other insurers. Unfortunately, the insurers who bought these books of business have been slow on paying policyholder claims – if they pay at all.

Bad faith lawsuits against insurance companies have already begun and many experts predict that litigation in this area will only increase in the future. Policyholders and their families have reported horror stories of insurers denying coverage for no reason and ignoring pleas for payments of valid claims. In most cases, insureds have said that their carriers simply wanted them to ‘go away’.

If your insurer is not paying your valid long term care claims, contact an attorney who can help.