United Kingdom Needs Private LTC Products

[Arthur Rudnick]

Consultants: United Kingdom needs private LTC products​

SEP 12, 2014 | BY ALLISON BELL

A new United Kingdom strategy for controlling public long-term care (LTC) program costs may expand the need for private LTC insurance products.

Consultants at Towers Watson make that argument in an analysis of the new U.K. Care Act of 2014.

The law calls for government programs to start paying LTC bills only when eligible costs exceed £72,000. Many consumers think of the £72,000 deductible as a cap on out-of-pocket expenses, but older individuals and their relatives will still be responsible for paying for room and board costs. If older individuals are staying in private facilities, they will have to cover any gap between the cost of government care and the fee the private facilities charge, the consultants say. The government will limit out-of-pocket costs for older people who have no assets and no relatives able to help pay for care, but families with assets could end up paying £500 per week or more for care out of pocket, the consultants say.

Insurers had trouble selling private long-term care insurance (LTCI) products in the United Kingdom in the 1990s, but conditions may now favorable for selling the kinds of life insurance-LTC hybrids that have been popular in the United States – especially if U.K. insurers set up the kinds of LTC planning specialist organizations that now exist in the United States, the consultants say.

 

[ltcadviser]

I just did my UK CE and got licensed in Manchester, Chelsea, London, and Edinburgh.

 

[Arthur Rudnick]

The only thing left is for you to learn how to speak their language........

 

[yankee466]

The only thing left is for you to learn how to speak their language........

I hear the Scots are bailing!!!! That should limit the territory.

 

[Arthur Rudnick]

Reprinted from the Center For Long Term Care Reform

Monday, September 15, 2014--

Seattle--

LTC Comment: In 2008, while I was on the Center's year-long National Long-Term Care Consciousness Tour, two officials from the United Kingdom interviewed me. I wrote this about our conversation:

"When I was in Washington, DC with the Silver Bullet of Long-Term Care, I received an e-mail from the Prime Minister's office of the United Kingdom. They wanted to know if it would be all right to send over a delegation to speak with me, and others, about long-term care financing. It seems Great Britain is unable to pay for its socialized acute care health system, much less for long-term care. They would love to have a private long-term care insurance market to help defray the public cost of funding long-term care.

"But when they looked at the United States, where it is commonly understood that no one qualifies for help with their long-term care costs until they have spent down into total impoverishment, they wondered: 'If Americans can't sell long-term care insurance in their dog-eat-dog, capitalist system, how could we ever hope to develop a long-term care insurance market in a socialized health care system like England's?' (My paraphrase.)

"I invited the U.K. delegation of two experts on aging to join me in the Silver Bullet at a very nice RV park on the outskirts of DC. I picked them up in the truck at the end of the D.C. Metro Green line, and drove them to the Airstream trailer. It was a hot and humid day, so we had the air conditioning on. The three of us sat in that little 16-foot trailer for three hours talking about long-term care financing.

"I learned something very interesting. In the United Kingdom, all you can shelter in home equity while getting the government to help with your long-term care costs is $40,000. We are 10 to 20 times more generous with our scarce public resources for long-term care in the United States as they are in their socialized health care system."

Well, that's all about to change now, and thankfully, we have a US expert on long-term care insurance close to the action in the UK. We'll interview actuary Vince Bodnar today and report on what we learn.