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Ask the Expert: Physical therapy may impede getting long-term care insurance

I didn't realize that one must be in outstanding good health to apply for long-term care insurance. I always thought you pay the premiums, and if you need long-term care, there is the money. But it seems if you’re in physical therapy, insurers want nothing to do with you. Why are they being so picky?

Insurers want to minimize the number of policyholders whose future cost of care may far exceed their premium payments. Someone who requires physical therapy is deemed likely to need care sooner than others, and for a longer period.

But even healthy people now have difficulty finding good long-term care coverage. Insurance companies have found these policies so unprofitable that many have stopped selling them and dramatically increased the premiums of existing policyholders. With premiums skyrocketing, healthier policyholders have dropped their coverage, compounding the problem: Without enough premiums from policyholders who don’t file claims, insurers struggle to pay for less-healthy people and still make a profit.  

So before selling most types of policies, insurers try to determine the probability and likely cost of an applicant’s future claims. (With life insurance, the issue isn’t whether you’ll die, but how soon; ideally, not until after you drop the policy.) The determination is based on your information — such as age, sex, health, ZIP code — and insurers’ statistical experience.

The exception is health insurance. Under the Affordable Care Act, insurers can no longer reject applicants or charge higher premiums based on pre-existing medical conditions. The economic viability of this very popular rule depends on two things: 1) Everyone must buy coverage, to spread insurers’ cost between healthy and sick policyholders; and 2) Many policyholders’ premiums are subsidized by the government.


The availability and cost of long-term care insurance depend partly on your age and health.


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