We’ve received lots of questions about private long-term care options over the last few weeks. We understand the interest in opting out of the state plan – particularly for higher-income earners or younger people that will pay in for many years with future income increases.
A recent update to share: many insurance companies have responded to the flood of LTC applications by making changes to their applicant requirements. Changes include increasing the minimum issue age to 40, adding a minimum of 2 years of benefits, a minimum benefit level much higher than the state plan, and adding a mandatory COLA increase. A few carriers have also moved to immediately ordering medical records – which assumes applicants have seen their doctor recently and had a metabolic panel completed in the last 2 years.
Why have insurance companies made these changes? They want to prevent applicants from applying and simply canceling policies after the opt-out period. While the minimum requirements may feel like a major obstacle – those are the basic minimums for a decent LTC insurance policy. We have also just learned of the first insurance company to suspend new LTC policy sales in Washington State and we expect other companies will follow.
It may be wise to consult your employer and ask whether they have an LTC benefit available for employees and if so, whether it qualifies for the exemption. If you want to discuss your personal long-term care options further, we have a few specialists we can refer you to for more information.