Seniors ponder whether long-term care is too risky amid coronavirus
Millions of Americans who bought insurance to help them pay for nursing or home-health care are now facing a tough call: Leave benefits they’ve paid for over the years untouched, or face increased risk of contracting COVID-19.
Credit Suisse, in a note to clients in June, predicts more lapsed policies and fewer claims as a result of concerns that moving into a nursing home or bringing in an individual caregiver could increase policyholders’ potential virus exposure. It’s an even scarier choice as poor health or advanced age leave them especially susceptible.
George Carofino, 77, was diagnosed with stage IV lung cancer in December. He’d spent much of his life traveling the world providing free dental care to people in need, but was forced to retire after a car accident in Ecuador left him with a mild traumatic brain injury. To cope with the cancer treatment, he and his wife, Dianne, sought assistance in early March from their long-term care insurer, Manulife Financial subsidiary John Hancock, which they have paid for coverage since the late 1990s.
But by the time he was deemed eligible for home care, George’s physicians warned against it. Cancer treatment had compromised his immune system, meaning he requires “complete isolation except for his medical visits,” according to a doctor’s note provided to Bloomberg News.
“When this COVID virus started, they told me right away, you’re compromised,” George said. “If you get it, we’ll just dig the hole right away for you.”
Unable to accept the home care, the Carofinos asked John Hancock to waive George’s half of their $660 monthly premium since they would have taken the care were it not for the risks posed by the virus. They’ve reached an agreement, but it didn’t come easy.
It’s unclear how common the Carofinos’ situation is. Experts say many cancer patients face similar dilemmas around long-term care in the pandemic.
“They’re just tough decisions,” said William Cance, chief medical and scientific officer for the American Cancer Society. He doesn’t recommend against in-home care in all cases, particularly if foregoing it would put someone at risk of falling or other harm.
Help from relatives may allow some to avoid long-term care settings, said Marlee Kiel, an oncology social worker with the nonprofit CancerCare. But for those without family, she said, “unfortunately, there really isn’t much of an option, if they need that care to survive.”
Almost 7 million Americans were covered under long-term care policies at the end of 2018, according to the most recent data from the National Association of Insurance Commissioners. Genworth Financial is the biggest issuer of individual policies; John Hancock is second with about 13% of the individual market.
The rising cost of care and years of low interest rates made the policies a money-loser long before COVID-19 struck. The number of insurers that offer them shrank to about a dozen in 2018 from over 100 in 2004, according to NAIC. Many are pushing for rate hikes, though Moody’s Investors Service warned in April that authorities are likely to be reluctant to allow that.
John Hancock collected about $2.2 billion worth of premiums for long-term care policies in 2018. It took steep losses on individual policies, according to NAIC data, but its group insurance was more profitable.
Manulife said on an earnings call in May that it saw “early indications” that new claims were slowing, but it was too soon to gauge what would happen over the longer term.
My wife and I bought LTC through CALPERS in 1995. We chose “Lifetime” benefits and “Inflation Protection”. In 2000 they started pushing us to choose a 3-year benefit period instead of Lifetime. We refused. In 2001 they increased our premium payment 1%. In 2014 they increased our monthly premium 40%. We asked to be evaluated re: receiving benefits. Surprisingly we were found eligible and now receive up to $5000 each every month for medical services received for the rest of our lives. Thank you Cal Pers LTC program.