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Another Problem For LTC Insurance: Earlier Alzheimer’s Diagnosis

As Anna Pfaehler wrote here on Monday, long term care (LTC) insurance is on shaky ground. New diagnostic criteria for Alzheimer’s disease will likely make the problem even worse.

Scientists and doctors have lately developed ways of detecting the disease at earlier stages than previously possible. A recent study of a new imaging technique, known as diffusion tensor imaging (DTI) or diffusion MRI, revealed that this method holds even more promise than traditional MRIs for detecting Alzheimer’s. Using brain imaging, doctors may someday be able to identify the disease before symptoms begin to manifest themselves. Alzheimer's Foundation of America (AFA) spokesman and geriatric psychiatrist Richard E. Powers told WebMD Health News, “I believe that five to 10 years down the road we will be able to tell someone we are 99% certain that they will develop dementia within 10 years.”

In light of these advances, working groups formed by the National Institute on Aging and the Alzheimer’s Association recently recommended a new diagnostic category be created for “preclinical Alzheimer’s disease.” The working groups also suggested that biomarkers, such as those revealed by brain imaging, ought to play a greater role in diagnosis. Although the diagnosis of “preclinical Alzheimer’s disease” would initially be used only in research, not medical practice, it is likely that it would quickly seep out into the general medical community. Together with the new focus on brain imaging, this could lead to more people without apparent memory impairment being diagnosed.

This is, of course, good news in the long term. Alzheimer’s cannot be stopped or reversed today. But when effective therapies are available, early diagnosis will likely be critical.

In the short term, however, the ability to spot, but not stop, Alzheimer’s is liable to cause some serious problems for the already troubled LTC insurance industry and its customers.

Those who discover that they are developing Alzheimer’s will rush to buy LTC insurance before they begin to have serious symptoms. Almost all of these people will then go on to have expensive claims. Meanwhile, those who discover through early testing that their risk of developing Alzheimer’s is low will be less likely to buy the insurance. This adverse selection will drive premiums higher in an unsustainable spiral, because with each premium increase, fewer healthy people will be willing to pay.

Insurance companies will be forced to respond. Some may decide, as MetLife recently did, to simply stop selling LTC insurance. Others may try to require pre-issuance medical testing for coverage and exclude those with incipient Alzheimer’s. Alternatively, companies might continue to issue LTC insurance without testing but stop covering costs related to Alzheimer’s, which would eliminate one of the main reasons people buy the insurance.

Earlier diagnosis will also have potential short-term costs on a personal level. There is still no cure for Alzheimer’s, and the most commonly used drug treatments work in less than half of people tested, according to the Mayo Clinic. Even when the drugs do work, the improvements are moderate and short-lived. Early diagnosis, then, has the potential to lead to fear and depression while offering only minimal advantages in treatment, as HIV diagnosis did before effective treatment options became available.

Some people, however, may be glad to know what lies ahead, even if there is little they can do about it. Pat Sneller, a Texas man who was diagnosed early as part of a research study, told the Dallas Morning News, “Yes, you have longer to know about it, but if there are things undone in your life that you want to do, you can do them.” Since his diagnosis, Sneller has devoted himself to advocating for Alzheimer’s awareness.

We can hope that earlier diagnosis will eventually lead to better treatment and prevention. If this happens, it will be worth far more than emphasizing the pointlessness of selling LTC insurance, which cannot be both affordable and broadly useful.

In the meantime, those who get the sad news that they have preclinical Alzheimer’s will need to do what all of us should be doing anyway: Save money, build equity and arrange our affairs to provide for ourselves and our families as best we can, no matter what life throws at us.

Insurance companies have no magic printing presses to care for all of us in our old age, and, while medical science can produce wonderful results, it usually does not do so overnight. Until the medical marvels come, we will have to stick to the old-fashioned approach of saving prudently and accumulating as few regrets as possible.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

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