Mutual of Omaha Announcement Regarding LTCi in WA

[scagnt83]

The actual cost of care today in Seattle is $10,000 month. WA will need a 2% payroll tax for that. Everyone is upset over a 0.58% payroll tax. Good luck with that.

People in the financial world said "good luck with that" over the 0.58% tax.

Assisted living and home care cost half of that number. Which means they could incrementally increase it over the next 10 years. Which is what one of my clients CPAs is predicting.

 

[scagnt83]

I get it as I'm dealing with it.

No one wants what you're discussing. They all want the cheapest option. As I mentioned, we should all be doing the right planning by informing clients about options, pitfalls, changes, etc. but a lot of these folks are short-sighted.

Hopefully, they'll qualify for more coverage in a few years when what you said comes to fruition.

Most people Ive dealt with have their own CPA. Im putting the onus on them.

"Talk to you CPA about appropriate benefit levels for the future"

"What does your CPA think is a safe benefit level for 10 years from now?"

But Ive seen the same thing. Most want the minimum benefit. I wont do traditional LTCI anymore.

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I get it with some people. But others are making dream salaries and still are hesitant over a $4k or $5k per year premium. For something that not only protects their finances, but will even return their premium or grow their CV.

 

[ltcadviser]

People in the financial world said "good luck with that" over the 0.58% tax.

Assisted living and home care cost half of that number. Which means they could incrementally increase it over the next 10 years. Which is what one of my clients CPAs is predicting.

A private NH room in Washington averages $371 day. $11000 month. A home health aide in Washington averages $32 hr. A licensed home care agency will have an 8 hr minimum to send out a home health aide. That's $7600 month just for one 8 hour shift. God forbid 24 hour round the clock home care is needed through a licensed agency. Assisted living averages $5625 month for a 1 bedroom. Memory care will be much higher than that.

The state is funding a drop in the bucket.

And all of these 35-40 year old WA residents will apply for $100 day with only 3% inflation and will foolishly believe they've just solved their problem forever, and will not realize they will need $80000 month for care in 50 years.

 

[Arthur Rudnick]

Jack,
Well said and this program is typical of most other "group plans" where the applicant/policyholder has no realistic idea as to what they're purchasing or what they have.
At the end of the day, they all say: "Hey, I have a LTC policy and I'm good to go"

 

[term2u]

Omaha and Thrivent just shut WA down. NGL needs over age 40. Would not be surprised if they shut it down soon too. Everyone calling me is seeking $3000 month, 2 years of benefits. Companies can't spend resources to issue and underwrite policies with bare minimum benefits, just to have the policyholders lapse these policies once they get their tax exemption. I have spoken to a dozen Microsoft engineers in the past week making $360,000 in salary and they are calling around to find the smallest policy available for a $500/year premium solely to get out of the state tax.

Yeah, it's pretty wild stuff and I'm sure that more carriers will follow suit... I'm in the same boat as you in only wanting to write LTC business that will stay on the books and for people who are actually interested in the LTC in the first place, but this is going to be a disaster...

I also came across this guy who is actually advising that people keep the coverage until 1/1/2023 in order to satisfy the exemption and then cancel the LTC - Washington State Long Term Care Payroll Tax – OPT OUT NOW!!... Nuts.

 

[Tahoe Ray]

Hancock upped their minimum for a policy with an LTC rider in WA to 250k.

They said 1/3 of their weekly submissions were coming from Washington state, many at the minimum face.

Crazy.

 

[ltcadviser]

Hancock upped their minimum for a policy with an LTC rider in WA to 250k.

They said 1/3 of their weekly submissions were coming from Washington state, many at the minimum face.

Crazy.

This is why money managers have account minimums of $500,000 or $1,000,000. Can you imagine if there was a Qualified Retirement Plan payroll tax unless you opened up an IRA for $6000? Everyone calling Edward Jones and Raymond James offices asking for proposals for a $6000 IRA. This is what we are dealing with.

 

[kpbdy99]

Yeah, it's pretty wild stuff and I'm sure that more carriers will follow suit... I'm in the same boat as you in only wanting to write LTC business that will stay on the books and for people who are actually interested in the LTC in the first place, but this is going to be a disaster...

I also came across this guy who is actually advising that people keep the coverage until 1/1/2023 in order to satisfy the exemption and then cancel the LTC - Washington State Long Term Care Payroll Tax – OPT OUT NOW!!... Nuts.

Every LTC carrier should yank this dweeb's contract.

 

[term2u]

Every LTC carrier should yank this dweeb's contract.

Haha, I know... He's basically promoting people to cancel their LTC coverage in order to get AUM biz, which is nuts!!

 

[scagnt83]

Latest carrier to pull LTCI product is Guardian. Announced today, as of end of business today, only Career Agents are able to write the LTC Rider in WA.

Since very few career agents are licensed outside of their state or surrounding region, that means basically only guardian agents who live in WA can sell Guardian LTC Riders in WA. Im sure that will limit the amount of apps being submitted.

Guardian has never cared about their indy agents, stuff like this just adds on to it. Thats why I dont place life biz with them on a regular basis.