Health

High Nursing Home Bills Squeeze Insurers, Driving Rates Up

Published

11 years ago

March 24, 2015

In this Feb. 28, 2013, file photo, Tina Reese leads a word game for residents at a nursing home in Lancaster, Pa. Life insurance firms pitched long-term care policies as the prudent way for Americans to shoulder the cost of staying in nursing homes. But those same companies have found that long-term-care policies are squeezing their profits. (AP Photo/Intelligencer Journal, Dan Marschka)

MATTHEW CRAFT, AP Business Writer

NEW YORK (AP) — Thirty years ago, insurance companies had the answer to the soaring cost of caring for the elderly. Plan ahead and buy a policy that will cover your expenses.

Now, there’s a new problem: Even insurers think it’s unaffordable.

Life insurance firms pitched long-term care policies as the prudent way for Americans to shoulder the cost of staying in nursing homes. But those same companies have found that long-term-care policies are squeezing their profits. Earnings for life insurers slid 11 percent in the most recent quarter, according to Moody’s Investors Service, and long-term care was the chief culprit.

“Insurers that sell these products lose money on them,” says Vincent Lui, a life-insurance analyst at Morningstar. “So they’re raising prices and also trying to get out of the business right and left.”

Four of the five largest providers — including Manulife and MetLife — have either scaled back their business or stopped selling new policies, according to Moody’s. The largest provider, Genworth Financial, continues to offer them, yet has struggled under the weight of rising costs.

The trends behind the industry’s troubles sound like good news outside the world of insurance. Older Americans are healthier and living longer. But that makes it difficult for the industry to turn a profit. Stays in nursing homes tend to last longer, so insurers have to pay out more in benefits than they had planned.

For older Americans and their families, however, there are few options besides private insurance. Medicare doesn’t cover nursing home stays except in certain circumstances. The Obama Administration had planned to make a long-term insurance program part of the Affordable Care Act but eventually abandoned it.

Sean Dargan, an analyst at Macquarie Group, an Australia-based investment bank, expects to see more people turning to Medicaid, the government’s health insurance for the poor, to cover the costs of care.

“It could really blow a hole through state budgets,” he says. “I think states and the federal government are going to need to think creatively to find a way out of this.”

For insurance companies, long-term care has proven to be a tough business.

Genworth, based in Richmond, Virginia, has turned in losses for two straight quarters. On March 2, the company reported that it discovered errors in its accounting for funds set aside to cover long-term care claims, knocking its stock down 5 percent in a single day. Analysts say problems with these policies explain why Genworth has lost more than half its market value over the past year, plunging from $17 to a recent $7.79.

“Their single biggest product is long-term care, and look at their share price,” Lui says. “It’s one trouble after another.”

In an interview with The Associated Press, Tom McInerney, Genworth’s CEO, says his company has been taking steps to make long-term care insurance a viable business, raising prices on older policies, introducing new products and throwing out their previous assumptions.

“There’s clearly a very high need for these policies,” McInerney says. “Given high demand and the limited number of insurers offering it today, I think it can be a very good industry going forward.”

When they began selling policies widely in the 1980s, the industry made a slew of assumptions about how long people would live, health care costs, and interest rates. Nearly all of them turned out wrong, analysts say.

Take life spans. At nearly 79 years, overall life expectancy in the U.S. has never been higher, according to the Centers for Disease Control and Prevention. That’s the biggest issue, analysts say, because it means more people who took out policies stick around to make claims, moving into nursing homes and asking insurance companies to help cover the steep bills.

The rate for staying at a nursing home has gone up an average of four percent every year for the last five years, according to Genworth’s annual survey. In 2014, the median bill for a shared room topped $6,000 a month.

“They were making their best estimates at the time. They just turned out to be wrong,” says Shachar Gonen, a Moody’s analyst who covers the industry. “If insurers knew full well what they were getting into, they probably would have priced their policies much higher. So who knows if the long-term insurance business would have ever started.”

The industry’s actuaries also made a bad call on the bond market, betting on much higher interest rates. That misstep proved critical because insurers buy bonds to cushion against future payouts, so years of historically low interest rates have thrown their accounts out of balance. It’s yet another reason why insurers keep putting more money aside to cover claims, resulting in big charges and lower profits.

All of these trends have forced companies like Genworth to spend much more than they had planned. Last year, insurers paid out a record $7.5 billion in claims on these policies, according to the American Association of Long-Term Care Insurance, which tracks insurance rates.

To cope with mounting costs and faulty assumptions, insurers have been cutting benefits and hiking their premiums year after year. Average premiums for new policies rose nearly 9 percent over the past year.

Prices range widely, depending on where you live, your age, level of benefits, and much else. In Tennessee, for instance, a 55-year old woman who is healthy enough to qualify for a policy can expect to pay $2,411 in the first year for $136,000 in benefits. That’s a brand-new policy, likely the lowest premium a person will pay. The expense climbs steadily as people age, and those holding policies typically don’t make a claim until they reach their 80s.

Insurers keep asking state regulators to let them raise prices on existing policies. In the last month, TIAA-CREF Life Insurance, MetLife and American General asked Connecticut’s insurance department for permission to raise rates as much as 22 percent over three years. The state rejected American General’s request and approved the other two.

McInerney, Genworth’s CEO, says that when regulators refuse to allow changes — such as signing off on single-digit rate increases or allowing other tweaks to older policies — the business becomes “‘impossible to run.”

If they’re not flexible enough to help make long-term care insurance viable for insurers, McInerney says he has told regulators that “Genworth isn’t going to stay.”

“Without it,” he adds, “a lot of these Baby Boomers are going to wind up on Medicaid.”

Analysts who follow the industry think that insurers have learned from their missteps and probably figured out the right price to charge for long-term care policies to turn a profit. The problem is, it might be too high for most people to pay.

“I’m of the opinion that it’s appropriately priced today,” says Macquarie Group’s Dargan. “But it’s also out of reach for most middle-income Americans. And that’s who needs it the most.”

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Oakland Children’s Hospital Workers and Patients Rally for Pediatric Medical Care

OAKLAND POST — “Children who go through a bone marrow transplant are immunocompromised, meaning that their immune system has been wiped out,” and having to take public transport to San Francisco exposes patients to the risk of getting a dangerous infection, said Paola Portillo, a social worker.

Published

22 hours ago

July 26, 2026

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Staff and family members of patients at UCSF Benioff Children's Hospital Oakland in Oakland, Calif., hold signs during a rally on Thursday, July 9, 2026. Rally participants protested the relocation of specialized care clinics to the hospital's San Francisco campus. Photo by Kayla Chan/Bay City News.

By Post Staff

Staff, patients’ families, and supporters held a rally recently at UCSF Benioff Children’s Hospital in Oakland to protest the hospital’s decision to relocate specialized treatment clinics to San Francisco.

Protesters said the move is creating barriers for patients to access care and raised concerns over whether the hospital was appropriately using funds partially designated for pediatric services.

In response, hospital officials say they are concentrating resources for highly specialized procedures so patients can receive the highest quality of care.

One of the speakers at the rally, Paola Portillo, a social worker, said the hospital started transferring the clinics a year ago when UCSF Health integrated with the Children’s Hospital Oakland, located at 747 52nd St. in North Oakland.

According to Portillo, patients who need bone marrow treatments and interventional radiology are forced to travel to UCSF Benioff Children’s Hospital in San Francisco, which can be dangerous, she said.

“Children who go through a bone marrow transplant are immunocompromised, meaning that their immune system has been wiped out,” and having to take public transport to San Francisco exposes patients to the risk of getting a dangerous infection, she said.

UCSF spokesperson Kristen Bole says the move improves the hospital’s quality of care, giving bone marrow treatment (BMT) as an example.

“Inpatient BMT is a highly complex service where patient volume, specialized infrastructure, faculty coverage and 24/7 support are essential,” she said in a statement. “Concentrating non-gene therapy inpatient BMT care at Mission Bay allows us to provide the safest and most sustainable model for patients and families.”

Hospital officials also emphasized that moving care was not a one-way street. Beginning this month, patients admitted for rehabilitative treatment have been directed to the children’s hospital in Oakland, Bole said.

Speakers at the rally also claimed UCSF has not been transparent about how it has allocated funding from 2020’s Measure C, a measure that created a half-percent sales tax that partially funded pediatric health care at the children’s hospital.

“The community fought so hard for Measure C because every child deserves access to lifesaving, pediatric, high-quality care right here in Oakland,” said Agnes Cho, a policy advisor speaking on behalf of Alameda County Supervisor Nikki Fortunato Bas. “The funding should go towards strengthening care for children right here in Oakland.”

Protesters also said UCSF’s $3.3 billion endowment has been misused. Last October, the University Professional & Technical Employees union published a report on the University of California’s spending, which highlighted projects such as the $4.3 billion UCSF Helen Diller Medical Center at Parnassus Heights.

“What I have a problem with is saying the kids from the East Bay have to go to San Francisco to get care, so that UC can build a fancy hospital for its richest patients in San Francisco,” said union President Dan Russell.

The UCSF spokesperson said UCSF has been investing in its Oakland campus, explaining that upgrades that are expected to be completed in 2030 at a cost of $1.6 billion.

“Oakland is central to our pediatric health system, and we are making the largest investment in the campus’ history,” the spokeswoman said. “We do not make investments of this scale in a campus, workforce or community we plan to leave behind.”

This article includes coverage from Bay City News Service and media releases.

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Commentary

NPRC to Meet with California Attorney General’s Office on to Urge Guardianship Reform

OAKLAND POST — Black has been a professor of law and finance at Northwestern University and Northwestern Pritzker School of Law since 2010. Before joining Northwestern, he served on the faculties of Stanford University, Columbia University, and the University of Texas at Austin, earning international recognition as one of America’s foremost empirical legal scholars.

Published

22 hours ago

July 26, 2026

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By Tanya Dennis

The National Probate Reform Coalition (NPRC) has announced that Bernard ‘Bernie’ Black, a nationally respected legal scholar, will meet with California Assistant Attorney General Eleanor Blume on July 27 to discuss the urgent need for guardianship, conservatorship, and probate reform.

The meeting marks another important step in NPRC’s effort to encourage California’s governor and attorney general to take a leadership role in addressing systemic abuse, financial exploitation, and the lack of meaningful oversight within probate and guardianship courts.

Black has been a professor of law and finance at Northwestern University and Northwestern Pritzker School of Law since 2010. Before joining Northwestern, he served on the faculties of Stanford University, Columbia University, and the University of Texas at Austin, earning international recognition as one of America’s foremost empirical legal scholars.

Despite his legal expertise, Black says neither his knowledge nor his professional reputation protected his family from what he describes as a deeply flawed guardianship system.

Following the death of his mother in 2012, Black’s sister, Joanne, who had lived with schizophrenia for more than 35 years, became the beneficiary of approximately two-thirds of their mother’s $4 million estate through a special needs trust established to provide for her lifetime care.

Seeking to preserve his mother’s estate plan and protect Joanne’s eligibility for public benefits, Black petitioned the Denver Probate Court for a temporary conservatorship and requested judicial approval for actions necessary to preserve assets. According to Black, the case initially appeared to proceed appropriately. Both the court-appointed counsel and a guardian ad litem supported his proposed conservatorship plan.

Black says the case later took a dramatically different turn.

According to Black, court-appointed professionals used family disagreements to seize control of the family trusts. What followed was 12 years of litigation and 96 probate court decisions, resulting in millions of dollars in professional fees.

Black says repeated settlement proposals intended to preserve assets for his sister’s benefit were rejected. He also strongly disputes adverse findings made by the probate court against him, his wife, and his son, arguing the court lacked jurisdiction over members of his family. Appeals were unsuccessful, reinforcing his concern that probate courts exercise extraordinary discretion with insufficient oversight.

Joanne Black passed away on Aug. 14, 2025. Black contends that millions of dollars that should have benefited his sister and preserved his family’s legacy have instead been consumed by litigation and administrative expenses. He continues to fight efforts to deplete the remaining family trusts.

“My sister has died, yet the Denver Probate Court and the guardianship professionals are still pursuing what is left of our family’s money,” Black said. “I’m talking millions of dollars.”

Black believes his family’s experience demonstrates that even experienced attorneys can become overwhelmed by a probate system that often lacks transparency and accountability.

Joining Black at the July 27 meeting will be Rick Black, founder of the Center for Estate Administration Reform (CEAR), who will present his organization’s proposed Victims’ Bill of Rights for individuals and families involved in probate and guardianship proceedings.

Together with the NPRC, they will urge the Attorney General’s Office to investigate fraud, financial exploitation, and predatory practices while aggressively enforcing existing laws that protect elders, disabled adults, and vulnerable families.

NPRC asserts California’s Attorney General, as the state’s chief law enforcement officer, has both the authority and responsibility to investigate fraud, public corruption, and financial exploitation occurring within probate courts.

The Coalition also hopes California will lead a national initiative by working with attorneys general across the country to develop coordinated enforcement strategies and meaningful reforms that restore integrity, transparency, and accountability to probate courts nationwide.

Bernard Black’s experience echoes hundreds of similar stories documented by probate reform advocates throughout the nation. His message to the Attorney General is both simple and sobering:

“If this can happen to one of America’s most respected law professors, it can happen to anyone.”

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Business

Mount Zion MBC, Church of Jesus Christ of Latter-day Saints Partner to Bring 29,000 Meals to Alameda County

OAKLAND POST — A semi-truckload of food arrived at MZMBC in Oakland on Tuesday, July 21. This was one of 250 trucks the LDS church is sending throughout the United States. By the end of the year 10 million pounds of food will be donated. Each truck carries approximately 40,000 pounds of shelf-stable pantry staples that can feed 1,400 families for one week.

Published

22 hours ago

July 26, 2026

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Pastor Michael Wallace of Mt. Zion Missionary Baptist Church (center) and David Kimball, president of the Oakland Stake of the LDS church listen to remarks before volunteers began their work. “We are grateful to partner with these organizations to help care for those in need in our community,” Kimball later told the assembled volunteers. Courtesy photo.

By Special to The Post

The interfaith community effort commemorates the 250th anniversary of the U.S.

More than 29,000 meals were received and distributed at the historic Mount Zion Missionary Baptist Church in West Oakland as part of an interfaith community effort to commemorate the 250th anniversary of the United States.

The Alameda County Community Food Bank (ACCFB), Mt. Zion Missionary Baptist Church (MZMBC), and the Church of Jesus Christ of Latter-day Saints (LDS) partnered to address food insecurity throughout Alameda County.

A semi-truckload of food arrived at MZMBC in Oakland on Tuesday, July 21. This was one of 250 trucks the LDS church is sending throughout the United States. By the end of the year 10 million pounds of food will be donated. Each truck carries approximately 40,000 pounds of shelf-stable pantry staples that can feed 1,400 families for one week.

Pastor Michael Wallace of Mt. Zion Missionary Baptist Church provides instruction as volunteers unpack pallets of food to be distributed. “We believe that having food is a basic human right and to address it is our Christian duty,” Wallace said. “That’s what makes this partnership so meaningful.” Courtesy photo.

The need for food is significant. According to the ACCFB, 1 in 4 members of the community they serve is experiencing or at risk of hunger.

“The challenges get much harder during the summer when children no longer have access to healthy meals at school,” says Regi Young, executive director of Alameda County Community Food Bank. “Our community and our food bank face similar challenges accessing some of the highest quality and high demand foods because they are typically also the most expensive.

Oakland Mayor Barbara Lee speaks at the JustServe event.

“Fresh milk is among the top items on these lists, so we are extremely grateful for this donation to help more families stretch their budgets and get through these challenging summer months,” Young said.

Two days later, on July 23, another semi-truck, this one bearing fresh milk from the LDS church, arrived at the ACCFB.
Event organizers share a commitment to caring for those in need and fostering meaningful service connections within communities.

“After 250 years, there is still food insecurity in America, and this is an interfaith community effort to eradicate hunger in our communities and cities,” said Pastor Michael Wallace of Mount Zion. “We believe that having food is a basic human right and to address it is our Christian duty. That’s what makes this partnership so meaningful.”

“Members of the Church of Jesus Christ of Latter-day Saints believe in following the Savior’s commandments to love God and to love our neighbor,” says David Kimball, president of the Oakland Stake of the LDS church. “We are grateful to partner with these organizations to help care for those in need in our community.”

Word Assembly First Lady Denise Clark, left, joined Mt. Zion Missionary Baptist Church First Lady Velma Wallace at the food distribution site, where the first of the 250 truckloads of food LDS will provide to places across the country was distributed. Courtesy photo.

Welcoming the truck’s arrival at 10 a.m. at MZMBC were Kimball, Young, Wallace of MZMBC, and civil rights activist and Post News Group Publisher Paul Cobb. Oakland Mayor Barbara Lee was in attendance and addressed the hundreds of volunteers. Inspiring music was provided by members of the Oakland Interfaith Gospel Choir under the leadership of Terrance Kelly.

Teens from both churches were on hand to assist with loading food items for various local nonprofits and community groups to distribute to those in need. The teens also assembled 1,000 hygiene kits for the unhoused. Each kit will include a note of encouragement written by the children and youth of each church.
The churches and organizations that received food include:

Mt. Zion Missionary Baptist Church
ECAP (Emeryville Citizens Assistance Program)
Support Life Foundation/Islamic Cultural Center of Northern California (ICCNC)
Serenity House
CRECE (Central American Refugee Committee)
ION (Impact Oakland Now -Word Assembly, Center of Hope and Abyssinian Baptist Church)
True Faith Baptist Church (East Oakland)

“These two large shipments of food and milk, along with this interfaith, community event, exemplify the spirit of volunteerism and community service that this country was built on,” says Gregg Ankenman, assistant director of Community Service for the Oakland/San Francisco Communication Council of the LDS Church.