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Why The WSJ Is Wrong About Long-Term Care Planning

A recent Wall Street Journal article, “Millions Bought Insurance to Cover Retirement Health Costs. Now They Face an Awful Choice,” has been circulating on the internet but for all the wrong reasons. The WSJ piece essentially falls into the “bad news sells” category of reporting. While the article itself provides plenty of great statistics and touches on a very important topic, the article really misses the mark on two main points about long-term care insurance.  Its “Woe is me!” theme actually pushes people away from doing quality long-term care planning. Instead of lamenting past missteps, the article could have emphasized some of the new techniques for building effective and sustainable solutions to the budding long-term care crisis.

Let’s start with what the article gets wrong. Unfortunately, we have to start with the title of the article. The title misrepresents the issue, as it refers to insurance as a way to cover “health care costs,” which is not the intended purpose of long-term care insurance.  Long-term care insurance is not designed to cover health care costs. It is designed to cover custodial care, which is more accurately defined as needed assistance with basic daily functions like eating and dressing. Second, numerous references within the article itself reverberate with the same sorry theme: that long-term care insurance policy holders, when regularly socked with steep premium increases, are faced with a sobering choice — to either pay the higher price or drop the policy altogether. This is just flat out wrong. In fact, most long-term care insurance policies can be modified to alter benefits or riders to keep costs down. For instance, you can reduce the inflation rider or shorten the benefit period to keep benefits in place but reduce premium costs. So, dropping the policy or paying the higher premiums are not the only options available to the policy holder.

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