If you have been following the news, you’ve likely seen some fairly frightening headlines about General Electric and alleged fraud related to long-term care (LTC) insurance deals.
So far, GE is denying the allegations but here are some things to know—and things to watch out for when it comes to your own LTC policy (or your loved one’s policy).
The report that was released by whistleblower Harry Markopolos stretches to 175 pages and details GE’s cash flow, accounting practices, and loss ratios to demonstrate $29 billion in long-term care losses that the company allegedly hid.
Markapolos, who is a forensic accountant and fraud investigator best known for discovering evidence of Bernie Madoff’s Ponzi scheme, argues that GE should have done more to stabilize their insurance reserves. Instead of taking immediate action, the company waited years until committing $15 billion to their reserve in 2018. The report says that GE shorted that commitment by $29 billion, leaving an already-struggling company in an even bigger lurch.
LTC insurance has evolved considerably over the years. Long-term care policies may have initially been designed strictly to cover nursing homes, but now they are commonly used to help policyholders get the home health care, assisted living, hospice services—and more—that they need.
And as people continue living longer, those policies are being expected to pay out longer than the underwriters anticipated. “What no one disputes, however, is that older long-term-care insurance policies have problems,” a recent Barron’s article reports. “The industry underestimated the cost and the frequency of claims.”
Don’t wait to review your policy or begin filing claims if you’re getting long-term care services. This is a complicated industry that’s likely to become even murkier as reports like this one come out and the industry continues to evolve in the face of changing needs.
The experienced team at Family Solutions for Care has read thousands of policies and worked with carriers, service providers, and living communities to ensure that our clients get the benefits they’re entitled to. We would love to work with you and your family to help you access your benefits each and every month!