Misinformation Taints Public's Image Of LTC Ins.

By Frederick Schmitt

HILTON HEAD, S.C.--True or false: Long-term care is only for the elderly? There is only a slight chance you or one of your family members will ever need long-term care? When purchasing long-term care insurance, it is best to wait until you are older?

If you answered true to any of those questions, you have been misled, said John O'Leary, director of marketing and product development at John Hancock Mutual Life, Boston.

Speaking at the 11th Annual Private Long-Term Care Insurance Conference here, Mr. O'Leary pounded home the message that misinformation abounds regarding long-term care and LTC insurance.

"Because people don't think they'll need long-term care, companies have to more aggressively market to that end," Mr. O'Leary explained. "Companies should face up to the realities of long-term care, specifically that the actual amount of people who will need the services is quite significant."

The Health Insurance Association of America estimates 36 percent of 65-year old males and 50 percent of 65-year old women today will eventually need nursing home care.

According to a Department of Health and Human Services survey on medical expenditures, in 1990 7.1 million people over age 65 had long-term care needs. Of those, 1.5 million were confined to nursing homes, while the other 5.6 million were disabled in the community.

Yet, only one in five adults considers purchasing an LTC insurance policy.

Another study by the HIAA revealed non-buyers would be more likely to purchase a policy if they thought they were at a higher risk for eventually needing the services.

With regard to waiting to purchase a policy, HIAA said its analyses indicate consumers can save 40 percent to 50 percent in terms of total premium cost if they purchase a plan between the ages of 35 and 45, and not when they are 55 or older.

HIAA also surveyed the top 12 companies selling long-term care coverage and found that for a 50-year old, the average national annual premium for a policy with $100 a day nursing home benefit or a $50 a day home health care benefit, a 20-day elimination period, and four years of coverage was $397. The same policy at age 65 cost $1,058, and at 79, $4,512.

"These findings indicate there is an increasing need for more education about long-term care," said Bill Gradison, HIAA president. "People need the coverage, but they're just not buying it."

"The need for long-term care goes far beyond the elderly," Mr. O'Leary said, citing actor Christopher Reeve as a prime example.

Several years ago, Mr. Reeve was fit enough to be cast in the movie role of Superman. After a horse-riding accident, however, he is now confined to a wheelchair.

"Here is the false image of long-term care: a lot of old people in wheelchairs in a corner with their heads down. This is just not accurate," Mr. O'Leary said. "It can happen to the rich, the poor, the famous, the old, the young."

If companies do a better job of educating people about long-term care and the need for LTC insurance, "our business will take care of itself," he said. "We don't need to sell as hard, what we really need to do is inform people."

"The reality is there is a ton of myths and misinformation, and a proliferation of bad information out there about long-term care," he said.

Mr. O'Leary suggested companies begin placing greater emphasis on breaking down the misinformation.

"Helping people to better understand some of the alternatives out there is very important," he said.

Education should be the number one priority when speaking of long-term care, he concluded.

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