Comparing Long-Term Care Insurance Policies: Bewildering Choices for Consumers

Comparing one Long-Term Care Insurance Policy with another is a challenge, even for professionals, and little objective guidance is available to consumers. In this AARP Public Policy Institute Issue Paper, Bonnie Burns of California Health Advocates looks at the myriad decisions facing consumers considering the purchase of Long-Term Care Insurance (LTCI), and makes recommendations designed to ease the process. The paper examines

• Types of Policies
  
  
• Policy Features
  
  
• Premiums and Premium Increases
  
  
• Regulatory Issues

and reviews the critical questions involved in selecting the right LTCI policy, including

• How many activities of daily living (ADLs) must be impaired to trigger benefits?
  
  
• Which family members will not qualify as care providers for benefit payment?
  
  
• What type of assisted living facility qualifies for benefits?
  
  
• How is the daily benefit amount calculated?
  
  
• How long will benefits last?
  
  
• What risks are involved with limited-term policies?

Recommendations include:

• Standardize policy definitions, benefits, features, and provisions.
  
  
• Require all insurers to offer at least the same benefit packages that are offered through the Federal Long-Term Care Insurance Program.
  
  
• Expand funding for the federally funded State Health Insurance assistance Programs (SHIP) so that more consumers could take advantage of the information and counseling they provide.
  
  
• Require companies to offer a standardized option for paying family caregivers with appropriate monitoring.
  
  
• Revise and update regulatory standards.

(33 pages)