companies have ceased doing business altogether, some have stayed and continue marketing their other products but have discontinued their long- term care insurance lines, and some companies have participated in mergers and acquisitions. 128 Thus, the consequences of exit and consolidation in the long-term care insurance industry for consumers so far have proven to be mainly negative, due to both increased costs and diminished coverage scope. 129
D. Consumers Paying for LTSS Through Medicare
Contrary to popular belief, 130 Part A (Hospital Insurance) of Original Medicare131 does not provide an open-ended entitlement to payment for all LTSS for eligible Medicare beneficiaries. Rather, Medicare coverage for LTSS is quite limited, not to mention complicated. 132 Medicare Part A covers, generally, up to 100 days per spell of illness in a skilled nursing facility (SNF) for needed nursing services, but only if admission to the SNF is post-acute (meaning that such admission proceeds immediately after a hospital admission which lasted for at least three consecutive days). 133 Part A also pays for certain home health care for homebound individuals so long as those
128. Nancy Anderson, Insurers Are Getting Out of Long Term Care—Is it Time for You to Get In?, FORBES (Oct. 4, 2012, 9: 40 AM), http://www.forbes.com/sites#/sites/financial finesse/2012/10/04/insurers-are-getting-out-of-long-term-care-is-it-time-for-you-to-get-in; see generally MARC A. COHEN ET AL., U.S. DEP’T OF HEALTH & HUMAN SERVS., EXITING THE MARKET: UNDERSTANDING THE FACTORS BEHIND CARRIERS’ DECISION TO LEAVE THE LONG- TERM CARE INSURANCE MARKET (2013), https://aspe.hhs.gov/sites/default/files/pdf/177866/ MrktExit.pdf. 129. Long-Term-Care Insurance: Insurers Are Forced to Boost Premiums or Stop Selling Policies, CONSUMER REP. (Aug. 2012), http://www.consumerreports.org/cro/2012/08/long- term-care-insurance/ index.htm. For example, consumers who already own long-term care insurance policies, but whose insurers decide to discontinue this product line, may find themselves medically rejected when they apply for policies with the fewer, more selective remaining companies or will be forced to pay substantially more in premiums for the same or lesser coverage. 130. See generally Richard L. Kaplan, Top Ten Myths of Medicare, 20 ELDER L.J. 1, 11– 12 (2012) (“Many Americans believe that Medicare covers the costs associated with these various options. In fact, the most recent survey of Americans age forty-five and over found that fifty-nine percent of respondents thought that Medicare pays for long-term care provided in a nursing home while fifty-two percent thought that it covers assisted living facility care.”). 131. 42 U.S.C. § 1395 (2011). 132. See, e.g., Richard L. Kaplan, Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World, 20 CONN. INS. L.J. 433, 433 (2014) (explaining that “[ i]n virtually every significant aspect of retirement planning. . . change has spawned increasing uncertainty, unpredictability, and anxiety for persons affected” by changes related to Medicare’s limited coverage, and the complexity associated with that coverage, and how “retirees and prospective retirees are now the locus of increasing risks relating to retirement security, and the foreseeable trends suggest that this situation will only exacerbate in the future”). 133. 42 C.F.R. §§ 409.20-409.30 (2011).