In yet another attempt to scare the public and smear responsible long-term care insurance companies Michael Hiltzig and the Los Angeles Times got it all wrong, AGAIN, in an article published yesterday. That should be no surprise to anyone who has followed LAT’s coverage of insurance products over the years and in particular long-term care insurance.
First Michael, CalPers long-term care insurance is not state regulated insurance! It is a self-funded trust, exempted by ERISA, from just about every California Department of Insurance regulation that insurance companies and agents in this state are obliged to abide by. Calling CalPers long-term care coverage, “insurance”,is like calling me a tri-athelete! CalPers early effort to guarantee issue policies was one of the many reasons this program has had so many rate increases. This flaw is bound to doom CLASS as well but more on that in a moment. Trying to paint real insurance companies with the grease brush of CalPers long-term care insurance is the height of hypocrisy and inaccuracy and this error should, but most likely will not, be corrected in future issues of the Bird Cage Gazette.
Second, due to the fact that real insurance companies are regulated by the California Department of insurance we now have rate stabilization in place that apply to all real long-term care insurance policies sold. There are different sets of rules for pre and post 2002 LTCi policies but the fact remains that unlike CalPers, insurance carriers must get permission from the Commissioner of Insurance to increase rates and there must be actuarial justification for these increases. I don’t suspect that CalPers will voluntarily submit to the same oversight any time soon.
Third, the American Academy of Actuaries and the Society of Actuaries have declared that CLASS long-term care “coverage” (not insurance) as submitted to Congress in June 2009 is “actuarily unsustainable”. CLASS is rife with problems that make CalPers look good. LAT and its writers ought to reference something other than Democrat Party talking points when reporting, in an effort to accurately inform the public. Get the latest on CLASS and changes in long-term care insurance markets on April 14, 2010 at a webinar that Susan and I will be conducting. CLICK HERE to register.
This CalPers story in the LAT (it is mostly a fairy tale) is a great opportunity for you to reach out to your clients. The bloom is off the rose of CalPers long-term care and the warts on the nose of CLASS coverage are so obvious that it shouldl be clear to the most casual of observers that state or Federal sponsored insurance look-alikes are bad for consumers. We are in the process of completing our first CLASS Act review. It will be in an easy to understand FAQ format so that you can easily discuss it and real long-term care insurance with your clients.
Please comment to this Blog and let’s start a conversation.
I am wondering when our “newspaper journalists” will ever be held to account for spreading false information to the public. They obviously evade and misuse the public trust given them in their dissemination of biased reporting via their vehicle in the form of supposedly trusted newspaper publications.
Some years ago I attempted to answer misinformation that was published as it related to variable universal life insurance and its uses as a retirement vehicle supplement when properly implemented. My solid information was never published because it would have made the “noted economic maven journalist” look bad. Interestingly enough had it been published and the information widely utilized many “investors” adversely effected in recent years due to the economic downturn of late would have been in a much more secure position then they are today… Can you say journalistic malpractice?
I am a democrat, and very dismayed by this pathetic attempt at long term coverage by the government. That I would have to pay for 5 years before I can even file a claim is a joke; however, as I try to see all of these types of things – a great opportunity.
I have been asked more about ltci recently due to this bill, and I see it as a great opportunity to be able to provide real, true long term care coverage to clients. I anticipate that as more and more folks see the reality of this CLASS(less) act, we will be seeing many more clients; when an insurance policy would pay, with one premium payment, this act looks more ridiculous.
Thanks for the forum Barry and we’ll see you at the April 14th webinar. Take care.
Nancy
Good for you Barry. I read the article and got hotter and hotter as I read. A typical LAT report filled with half truths and flawed beyond belief. If you or I put out this much mis-information we would be looking for different work. Maybe that is a good idea for Mr. Hiltzig. Ken
Spot on comments from all of you. Barry