Unfortunately, influential people continue to spread misleading, harmful information about long-term care insurance (LTCi). Too often, I must correct mass media. Michael Hiltzik, a business reporter for the Los Angeles Times, has harmed his readers with his April 7, 2010 column by giving false information and using inflammatory language to incite the reader. Mr. Hiltzik slanders long-term care insurance (LTCi).

The first third of Mr. Hiltzik’s article describes the Klotzs, an elderly couple he feels was duped by the big bad long-term care insurance company CalPERS, and he succeeds in getting his readers worked up.

There’s a giant flaw in Mr. Hiltzik’s premise, however. The CalPERS “long-term care protection” the Klotzs own is not true LTCi.

Here’s how Wikipedia defines CalPERS: “The California Public Employees’ Retirement System (CalPERS) is an agency in the California executive branch that ‘manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families’^[1].”

According to my colleague and widely respected expert Claude Thau, “CalPERS is not an insurance company! It is a state pension fund and because it is specifically exempted from requirements imposed on insurance companies, it has a financial competitive advantage. Although many people trust government organizations and non-profits more than for-profit entities, Mr. Hiltzik’s article demonstrates that government and non-profit entities do not necessarily produce better results.”

Once he puts the CalPERS LTC program in the same category as group or individual LTCi policies, Mr. Hiltzik is off to the races with fear mongering as he builds on this false information.

One particularly crazy thing Hiltzik says is, “The insurers assumed, correctly, that regulators would wave rate increases through or allow for reductions in benefits to keep customers from being abandoned outright.” This hasn’t happened. In fact, rate hikes are difficult to obtain. LTCi has been a very rate stable product. If you want further insight on this, please give me a call at 713-988-4671.

Mr. Hiltzik acknowledges the need for LTC planning in this quote, “…government agencies are trying to encourage more Americans to buy long-term-care insurance so the burgeoning cost of their care doesn’t completely drain the public purse. Almost half the states already are planning to slash Medicaid, which currently pays for 70% of nursing-home patients, according to the Kaiser Family Foundation.”

Although this small quote is the only acknowledgement Mr. Hiltzik gives for the need to plan ahead for long-term care, he spends the rest of his article discouraging readers from protecting themselves with legitimate LTCi by presenting the Klotzs story plus additional invalid criticisms of LTCi.

See the comments others have made on Mr. Hiltzik’s piece for responses to his inflammatory and false accusations.

Of course, we all sympathize with the elderly Klotzs and can only wish they had consulted with a competent LTCi specialist to avoid the mess they find themselves in.  Mr. Hiltzik seems to be playing on his readers’ emotions to generate fear that LTCi is nasty stuff they can’t trust. Such sloppy reporting will undoubtedly lead some readers to believe this incorrect information and react by doing nothing about long-term care planning.

After slandering legitimate LTCi, Mr. Hiltzik acknowledges that the government cannot meet the demands for care but offers no alternatives for his readers! A more responsible journalist might have used the Klotzs’ experience as a cautionary tale to encourage readers to carefully investigate and understand what LTCi is and can do.

No solution is perfect, but LTCi is the best solution I’ve seen to fund care needs. LTCi has worked splendidly for my few hundred clients who have collected from their policies. It has preserved wealth, lowered family stress levels, and given my clients more dignity and options.

The fact is that LTCi works better than any other funding solution for care. Americans must talk about long-term care planning NOW. Otherwise, if care is needed, we often see financial catastrophe and family hardships that could have been largely avoided.

I was quite amused to find the following as I researched another project. I’ve lifted it verbatim from the Wikipedia entry, Baby Boom Generation.

“As of 1997, it was reported that, as a generation, Boomers had tended to avoid discussions and planning for their demise, and avoided much long-term planning. However, beginning at least as early as that year, there has been a growing dialogue on how to manage aging and end-of-life issues as the generation ages. In particular, a number of commentators have argued that Baby Boomers are in a state of denial regarding their own aging and death, and are leaving an undue economic burden on their children for their retirement and care. Research on memory loss has indicated that the Baby Boom Generation has been confronted with increasing loss of memory due to the agitated life they lead, which requires that attention is put on many different things at a time. Since older generations were not faced with this rapid lifestyle, and newer generations have lived with this society all their lives, it is said that the Baby Boom Generation was the most damaged one in terms of memory loss due to age.”