long-term care

Like Many Other Companies, General Electric Has Been Swept Up in the Long-Term Care Financing Crisis

The costs of long-term care (LTC) for older Americans can be catastrophic, often reaching hundreds of thousands of dollars over the course of a lifetime.  While insurance carriers and corporations jumped at the opportunity to market LTC insurance products as a consumer safeguard in the 1980s and early 1990s, many of these companies are now finding themselves in a serious financial predicament.  Having sold billions of dollars in LTC products to consumers, these entities are struggling with how they are going to cover the cost of care as more and more policyholders are making claims for benefits.  

A recent article in the Wall Street Journal highlighted the serious financial issues that LTC  insurance carriers and other corporations are grappling with.  In particular, this article focused on the problems General Electric Co. (GE) is facing in light of the concerns surrounding the health of the long-term care industry.  Although GE spun out its unit associated with long-term care years ago, the company is still being impacted by the long-term care financial crisis.  This is because GE still maintains billions of dollars in reinsurance obligations stemming from the reinsurance coverage it sold to other insurance carriers in the long-term care market. To the extent these LTC carriers now lack sufficient reserves to cover their policyholders’ claims, GE may be on the hook.

Factors Leading up to the Crisis

GE is certainly not alone as companies across the nation are finding themselves at risk for LTC reserve problems.  As the block of LTC insurance matures, more and more aging consumers are making claims for LTC benefits.  With the costs of long-term care growing exponentially, insurance carriers are discovering that they may have underestimated the costs associated with LTC.  In many instances insurance companies offered top level LTC benefits to keep up with the competition but failed to charge sufficient premiums to cover the future costs of care.  Actuaries may have also overestimated the lapse-rates associated with long term insurance – the number of people who would stop paying premiums and hence forfeit their LTC coverage.  Additionally, lower than predicted interest rates have contributed to the reserve problem because insurance companies invest and generate interest on policy premiums until they are needed to cover the claims filed by LTC policyholders.

Impact Upon Policyholders

While companies are grappling to wrap their arms around the long-term care insurance reserve problem, consumers are bearing the brunt of the crises.  Policyholders who have faithfully paid their premiums are now finding themselves in an uphill battle against carriers that are denying and delaying their claims for LTC coverage.  Additionally, many consumers have been slapped with substantial premium increases as insurers gain regulatory approval from state insurance commissioners to increase their long-term care insurance rates.   

Unfortunately, with the aging population and long-term care costs continuing to explode, this problem is unlikely to go away anytime soon.  Consumers who need to file claims for LTC benefits or who have been denied coverage by their insurance carriers should seek out he advice of a qualified Chicago insurance lawyer.  Bryant Legal Group PC has decades of collective experience assisting clients with long-term care coverage and other types of insurance products.  We have a solid understanding of the LTC insurance industry and are currently monitoring developments on the state and national level.  We invite you to discuss your situation with an attorney at our firm by calling 312-561-3010 or emailing us at info@bryantlg.com.

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The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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long-term care

Bryant Legal Group PC announces that Attorney David Bryant has been invited to speak at the Illinois State Bar Association, Elder Law Section Council’s fifth annual boot camp on April 26-27, 2018 in Chicago.  Attorney Bryant will discuss private pay options to cover the cost of home health care, nursing homes, assisted living facilities and other forms of care in the current long-term care environment.

A member of the Illinois State Bar Association’s Insurance Law Section, David Bryant is the founding partner of Bryant Legal Group PC – a Chicago-based law firm focused on helping policyholders collect insurance coverage and benefits.

Attorney Bryant has decades of experience assisting clients with all aspects of insurance coverage, from evaluating policies, to submitting claims, to litigating and appealing coverage denials.  He has a comprehensive understanding of the insurance industry and offers particular insight into the financial challenges insurers across the nation are facing as more and more policyholders are seeking benefits under their long-term care (LTC) policies.

Regardless of whether the care is provided by a home health aide, in an assisted living facility or in a nursing home, long-term care costs have exploded.  Back in the 1980s and early 1990s, insurance companies and corporations recognized that there was a growing demand from consumers for long-term care insurance plans.  These companies marketed long-term care insurance as a product designed to help sway people’s fears that they their savings would be depleted and they would run out of money trying to pay for future long-term care expenses.

While consumers purchased these policies to avoid potential financial hardships down the road, problems surfaced when the block of long-term care insurance policies began to mature.  As more and more policyholders filed claims for long-term care benefits, insurance companies found it increasingly difficult to pay these claims.  These struggles continue today with more and more companies coming to realize they had underestimated the exposure associated with their long-term care products.  Faced with tremendous financial challenges, many insurance companies are denying claims and pressuring their claims departments to thoroughly scrutinize every aspect of a claim before any payments for long-term care benefits are made.

In light of the current environment, consumers are increasingly asking whether they should purchase long-term care insurance.  Attorney David Bryant carefully monitors the financial conditions of insurance carriers and will share his experiences with and insights into the long-term care insurance market during this program.  He will also discuss various private pay options consumers may want to consider to fund the costs of long-term care, including savings and retirement income.

If you have questions about long-term care insurance coverage or want to learn more about and the services provided at the Bryant Law Group PC, we invite you to contact Chicago insurance attorney David Bryant at 312-561-3010 or email us at info@bryantlg.com.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Bryant Legal Group

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

Request Your Free Consultation

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

This field is for validation purposes and should be left unchanged.