As aging baby boomers dominate the population, there is a brewing storm that threatens to financially overwhelm government programs that provide retirement benefits. The realization that potential Medical claims for long term care may bankrupt the system, has forced the state to seek ways to mitigate the threat while there is still time. California is one of four states that have taken concrete steps to encourage people to assume some responsibility for the cost of their own long term care through partnership insurance policies.
Medical is the government program that provides benefits to those who can no longer remain independent and are residing in a nursing home. However, people qualified to receive those benefits can only have countable assets of fewer than $2,000 and a monthly income that is less than the cost of the nursing home.
Therefore, people are required to “spend down” all of their own money, including equity in their homes worth more than $500,000, before Medical will assume the financial burden of their stay in a nursing home. Unfortunately, seniors with few assets and little will place the burden of their care on friends and family in order to remain in their homes. When the friend/family option is not available or appropriate, a nursing home funded by Medical will be their only solution.
The California Partnership for Long Term Care offers special policies that allow buyers to protect assets and qualify for Medical if their condition requires nursing home care and the long-term care policy runs out. The asset protection offered by partnership policies is dollar-for-dollar: for every dollar of coverage that a long-term care policy provided, allows a person to keep a dollar in assets that normally would have to be spent down to qualify for Medical. So, for example, if you buy a long-term care insurance policy that paid out $150,000 in benefits, you would be allowed to retain $152,000 in assets and still qualify for Medical. This will allow people to stay in their homes longer and leave money for a surviving spouse, other family members or to anyone they want instead of having it consumed on the cost of their own care.
In California, only Genworth Financial, John Hancock Life Insurance, Met Life, Banker’s Life and Casualty, New York Life and CalPERS Long-Term Care Program have been approved by the state to offer individual partnership policies. Partnership policies are not for everyone. The policy is most appropriate for middle-income people who have too many assets to qualify for Medical, but can't afford a pricey long-term care insurance policy.
Wednesday, June 3, 2009
Thursday, May 14, 2009
The Greatest Father's Day Gift
As families’ gather to show love and appreciation for all that fathers have done for us, you can give something back to him by having a difficult, but critically important conversation, about planning for his long term care.
Although it is difficult to persuade any parent to discuss the issue of long term care, it can be raised with the approach of enabling them to retain control of their options and financial security. You can play an important role in helping both your parents maintain their independence and dignity by helping them create a plan. Fathers are used to playing the “provider” role for their families, and resist the efforts to be “provided for.”
Facing a long term care need is usually a crisis that family members or close friends are forced to address. As seniors are faced with the struggle of losing independence, they resist burdening a daughter or son with their care. Seniors often hide their struggles and become the primary care givers for each other. However, when caring for a spouse, they neglect their own health issues and often end up passing away before the spouse they were caring for.
When children of aging parents end up being responsible for their parents care, they face many conflicts between of the commitments they have to their own families and work. When a parent is in care, it often causes conflict and strain on the relationships among the siblings, causing parents more distress.
With the average cost of custodial home care being $20 an hour and the cost of a nursing home at $75,000 a year, the financial impact on families can also be devastating and may leave families having to depend on nursing home care through government assistance.
All of these burdens can be greatly reduced by having a plan that includes parental wishes and resources in place to pay for the appropriate care in the setting of their choice. It’s never too soon to have those plans in place, yet, if you wait too long, it will be too late.
The most loving Father’s Day gift you can give is to encourage and help your parents plan for a long term care need. It’s a gift from the heart that is truly priceless.
Although it is difficult to persuade any parent to discuss the issue of long term care, it can be raised with the approach of enabling them to retain control of their options and financial security. You can play an important role in helping both your parents maintain their independence and dignity by helping them create a plan. Fathers are used to playing the “provider” role for their families, and resist the efforts to be “provided for.”
Facing a long term care need is usually a crisis that family members or close friends are forced to address. As seniors are faced with the struggle of losing independence, they resist burdening a daughter or son with their care. Seniors often hide their struggles and become the primary care givers for each other. However, when caring for a spouse, they neglect their own health issues and often end up passing away before the spouse they were caring for.
When children of aging parents end up being responsible for their parents care, they face many conflicts between of the commitments they have to their own families and work. When a parent is in care, it often causes conflict and strain on the relationships among the siblings, causing parents more distress.
With the average cost of custodial home care being $20 an hour and the cost of a nursing home at $75,000 a year, the financial impact on families can also be devastating and may leave families having to depend on nursing home care through government assistance.
All of these burdens can be greatly reduced by having a plan that includes parental wishes and resources in place to pay for the appropriate care in the setting of their choice. It’s never too soon to have those plans in place, yet, if you wait too long, it will be too late.
The most loving Father’s Day gift you can give is to encourage and help your parents plan for a long term care need. It’s a gift from the heart that is truly priceless.
Friday, May 8, 2009
7 Reasons Not to Buy Long Term Care Insurance
1. You might not need it. According to the U.S. Department of Health and Human Services, at least 70 percent of people over age 65 will need some sort of long term care services. Maybe you'll be one of the 30% who won't. If you live past 85 years, you might be the 50% who won't have Alzheimers.
2. Your kids will take are of you. Decide which one of your kids can quit their job, walk away from their own lives and take are of you. Give them notice now so that they can plan for it. Maybe one of them can even delay their own plans for retirement by spending their savings on your care. Hey, you changed their diapers, why shouldn't they change yours.
3. It's too expensive. According to the 2009 Cost of Care survey put out by Genworth Financial, the average cost of care is $82,000 a year today. You could save your money and in 30 years you can pay the $328,000 it will cost for one year of care. The average annual premium is about $2,000 a year and most policies have compounded inflation that will keep up with the rising cost of care. Why spend $60,000 over 30 years in premiums?
4. You'll never end up in a nursing home, so you don't need a policy. The majority of care is provided in a home setting and more than 50% of current long term care claims are for home care. You'll only have go to a nursing home if you need a nurse to take care of you or you don't have enough money to afford staying at home.
5. The government will pay for your care. If you've spent all of your assets down to $2,000, you're right. It doesn't matter if your care requires skilled nursing, Medi-Cal will fund your care in a Medi-Cal-funded facility where you can share a room with 4-6 other people. At least you won't feel lonely.
6. You don't need to even consider a policy until age 65. Granted if you're still healthy, you can get a policy and pay five times more than you would have paid if you had gotten the policy at age 60 and 10 times more in annual premiums had you bought your policy at age 55.
7. Your wife or kids can be asked to assist in your suicide or you can do it yourself. If anyone assist in your suicide, they can receive free room, board and health care for the rest of their lives granted by the Federal government. If you're planing on doing it yourself, make sure you do so before you forget where you put your gun.
Why plan for your own long term care experience?
2. Your kids will take are of you. Decide which one of your kids can quit their job, walk away from their own lives and take are of you. Give them notice now so that they can plan for it. Maybe one of them can even delay their own plans for retirement by spending their savings on your care. Hey, you changed their diapers, why shouldn't they change yours.
3. It's too expensive. According to the 2009 Cost of Care survey put out by Genworth Financial, the average cost of care is $82,000 a year today. You could save your money and in 30 years you can pay the $328,000 it will cost for one year of care. The average annual premium is about $2,000 a year and most policies have compounded inflation that will keep up with the rising cost of care. Why spend $60,000 over 30 years in premiums?
4. You'll never end up in a nursing home, so you don't need a policy. The majority of care is provided in a home setting and more than 50% of current long term care claims are for home care. You'll only have go to a nursing home if you need a nurse to take care of you or you don't have enough money to afford staying at home.
5. The government will pay for your care. If you've spent all of your assets down to $2,000, you're right. It doesn't matter if your care requires skilled nursing, Medi-Cal will fund your care in a Medi-Cal-funded facility where you can share a room with 4-6 other people. At least you won't feel lonely.
6. You don't need to even consider a policy until age 65. Granted if you're still healthy, you can get a policy and pay five times more than you would have paid if you had gotten the policy at age 60 and 10 times more in annual premiums had you bought your policy at age 55.
7. Your wife or kids can be asked to assist in your suicide or you can do it yourself. If anyone assist in your suicide, they can receive free room, board and health care for the rest of their lives granted by the Federal government. If you're planing on doing it yourself, make sure you do so before you forget where you put your gun.
Why plan for your own long term care experience?
Saturday, May 2, 2009
2009 Cost of Care Survey Released: conclusion move to Louisianna
Genworth Financial just release their annual cost of care survey and the conclusions are consistent every year -- care keeps getting more expensive. This year they added a "Choice and Affordability Index." I live in Californian, where care costs an average of $225.14 a day and is listed as having "high cost" and "least options." I thinks this just means that it costs a lot to receive care in California and you don't have a lot of options of where to receive your care. If you've lost most of your life savings lately and you're retired, you can always move to Louisiana where the cost of care averages $139.48 a day and has a "least cost" and "most options" rating. If you do have to go into long term care, the last place you want to be is Alaska. Besides being really cold, the cost of care in Alaska averages $514 a day and has the same "high cost" and "least option" rating as California. If your plan is to retire in Hawaii, start saving your money. It is the second most expensive place to receive care at $374.82 a day. Hopefully, you can get a room with a view and enjoy some beautiful scenery while your're there.
No matter where you decided to retire, you better start saving your money, make a good investments or buy insurance.
No matter where you decided to retire, you better start saving your money, make a good investments or buy insurance.
Sunday, April 26, 2009
How Have you Planned to Live to 100?
Congratulations baby boomers, up to three million of the 76 million of you will celebrate your 100th birthday! Today's centenarians have become the poster children for what scientists call the "longevity revolution," which has added more than 30 years to life expectancy over the past 100 years. How well you live during those extra years will depend on how well you’ve planned for the ordinary cost of living longer and the extraordinary cost if you need long term care.
We all know the value of buying life insurance – it’s there for a rainy day or to protect the people we love from the financial impact of a premature death. Yet, how well have you protected those same people in the event that you don’t die? How well have you protected your retirement income and the emotional and logistical burden of caring for you in the event that you are no longer able to care for yourself due to physical limitations or some form of dementia.
Americans are in denial about the oncoming crises in the costs of care. A recent poll indicated that 59 percent of baby boomers are concerned about the growing cost of care, yet 72 percent have made no plans. Maybe because we believe that Medicare will pay for our care. Think again. Maybe we think that Medical will pay for our care? It will, if you’ve become financially impoverished and want to stay at a Medical-funded nursing home. If you want to maintain your choices and stay out of a nursing home, your only options are to spend your own assets or buy long term care insurance.
Results of the Genworth Financial’s "2007 Cost of Care Survey" the average national cost of care in nursing homes, assisted living facilities and home-based care increased 15 percent since 2004. According to the survey, the average daily rate of private nursing home care is $204. The cost of assisted living can be close to the same price if you need care and even a home health care provider averages $19 an hour. As the costs grow an average of five percent a year, will you be able to shoulder these expenses on your own?
Although the majority of people who require long-term care are over the age of 65, a substantial 40 percent are between ages 18-64, so don't think you’re “too young,” to be in care. When considering the purchase of long term care insurance understand that you will need to meet medical qualifications and even a bad diagnoses can make the coverage unavailable. Although, once you’ve been approved for a policy, it is “guaranteed renewable,” and no changes in your health can impact your coverage. Waiting too long may mean loosing your “insurability” due to pre-existing health conditions. Because the premiums are based on your current age, waiting may also mean paying much higher premiums. Other factors in determining premiums are health, martial status and the amount of coverage you purchase.
The product is not suitable for everyone. If you have to make substantial changes in your lifestyle to pay your premiums, it isn’t for you. Like any insurance product, it is for those who have something to protect and something to loose. The product is suitable for anyone who wants to avoid an unintended invasion of their portfolio and for those who want to maintain their independence, their choices and help their kids fulfill their promise that they’ll never put you in a nursing home.
This isn’t a do-it-yourself product. Meet with an agent who specializes in long term care insurance so that they can pick the most appropriate plan at an affordable premium.
We all know the value of buying life insurance – it’s there for a rainy day or to protect the people we love from the financial impact of a premature death. Yet, how well have you protected those same people in the event that you don’t die? How well have you protected your retirement income and the emotional and logistical burden of caring for you in the event that you are no longer able to care for yourself due to physical limitations or some form of dementia.
Americans are in denial about the oncoming crises in the costs of care. A recent poll indicated that 59 percent of baby boomers are concerned about the growing cost of care, yet 72 percent have made no plans. Maybe because we believe that Medicare will pay for our care. Think again. Maybe we think that Medical will pay for our care? It will, if you’ve become financially impoverished and want to stay at a Medical-funded nursing home. If you want to maintain your choices and stay out of a nursing home, your only options are to spend your own assets or buy long term care insurance.
Results of the Genworth Financial’s "2007 Cost of Care Survey" the average national cost of care in nursing homes, assisted living facilities and home-based care increased 15 percent since 2004. According to the survey, the average daily rate of private nursing home care is $204. The cost of assisted living can be close to the same price if you need care and even a home health care provider averages $19 an hour. As the costs grow an average of five percent a year, will you be able to shoulder these expenses on your own?
Although the majority of people who require long-term care are over the age of 65, a substantial 40 percent are between ages 18-64, so don't think you’re “too young,” to be in care. When considering the purchase of long term care insurance understand that you will need to meet medical qualifications and even a bad diagnoses can make the coverage unavailable. Although, once you’ve been approved for a policy, it is “guaranteed renewable,” and no changes in your health can impact your coverage. Waiting too long may mean loosing your “insurability” due to pre-existing health conditions. Because the premiums are based on your current age, waiting may also mean paying much higher premiums. Other factors in determining premiums are health, martial status and the amount of coverage you purchase.
The product is not suitable for everyone. If you have to make substantial changes in your lifestyle to pay your premiums, it isn’t for you. Like any insurance product, it is for those who have something to protect and something to loose. The product is suitable for anyone who wants to avoid an unintended invasion of their portfolio and for those who want to maintain their independence, their choices and help their kids fulfill their promise that they’ll never put you in a nursing home.
This isn’t a do-it-yourself product. Meet with an agent who specializes in long term care insurance so that they can pick the most appropriate plan at an affordable premium.
Friday, April 17, 2009
Can't Medical pay for my long term care?
Those of us who sell long term care insurance and understand the astronomical cost of having a long term care need now and in the future, have a hard time understanding why everyone with a checking account isn't lining up at our doors to get themselves a policy before they lose their health.
I attended a talk today presented by Steve Moses from the Center for Long Term Care Reform in Washington who addressed this issue. If people believe that the government will pay for their care, they will deny the risk, avoid the premiums and when they get sick, depend on getting free care at a nursing facility. (Although that's the last place everyone says they want to be.)
Although we are told that you need to "spend down" all of your assets paying for your own care before Medical will fund it, Moses pointed out that that is not necessarily true. It is true that you must "spend down" to $2,000 in the bank before being eligible for Medical, but you don't have to spend it on your care. You just can't give it away to anyone else. If you want Medical to start funding your nursing home, you can spend it on a great vacation, a new car or refurnishing your home -- thereby artificially impoverishing yourself. Moses believes this is a disincentive for people taking personal responsibility for funding their care.
Given the financial crises that states are in, the plan to depend on Medical to pay for your care is not going to be a viable one in the relatively near future. The government is already millions of dollars behind in current Medical obligations. Moses said that 25 percent of state budgets are eaten up by Medical and 33 - 50 percent of those funds go to pay for long term care. Finding the money to pay for Medical obligations now and into the future is a "fiscal black hole," said Moses. The only way that Medical will survive is to close all the loop holes and make it a true welfare program designed to help those who are truly financially destitute.
Another fact to consider is that Medical currently pays nursing homes only 70 percent of the cost of providing adequate care. So, if becoming financially destitute and receiving your care in a Medical-(under) funded facility is your plan, go for it. But if you'd like to receive your care in the setting of your choice with the best care available, you might want to start saving lots of money, setting up some good investments, or getting insurance.
I attended a talk today presented by Steve Moses from the Center for Long Term Care Reform in Washington who addressed this issue. If people believe that the government will pay for their care, they will deny the risk, avoid the premiums and when they get sick, depend on getting free care at a nursing facility. (Although that's the last place everyone says they want to be.)
Although we are told that you need to "spend down" all of your assets paying for your own care before Medical will fund it, Moses pointed out that that is not necessarily true. It is true that you must "spend down" to $2,000 in the bank before being eligible for Medical, but you don't have to spend it on your care. You just can't give it away to anyone else. If you want Medical to start funding your nursing home, you can spend it on a great vacation, a new car or refurnishing your home -- thereby artificially impoverishing yourself. Moses believes this is a disincentive for people taking personal responsibility for funding their care.
Given the financial crises that states are in, the plan to depend on Medical to pay for your care is not going to be a viable one in the relatively near future. The government is already millions of dollars behind in current Medical obligations. Moses said that 25 percent of state budgets are eaten up by Medical and 33 - 50 percent of those funds go to pay for long term care. Finding the money to pay for Medical obligations now and into the future is a "fiscal black hole," said Moses. The only way that Medical will survive is to close all the loop holes and make it a true welfare program designed to help those who are truly financially destitute.
Another fact to consider is that Medical currently pays nursing homes only 70 percent of the cost of providing adequate care. So, if becoming financially destitute and receiving your care in a Medical-(under) funded facility is your plan, go for it. But if you'd like to receive your care in the setting of your choice with the best care available, you might want to start saving lots of money, setting up some good investments, or getting insurance.
Wednesday, April 1, 2009
Respite Care Act Offers Relief for Family Caregivers
Governments realize that unpaid caregivers help a senior or disabled person to stay in their homes and out of Medicaid - funded nursing homes, saving taxpayers millions of dollars a year. They also recognize that family or friends providing that care need a break, or “respite,” in order to maintain their own health and deal with the stress that comes with being a care giver.
Therefore, before adjourning in December, Congress unanimously approved the Lifespan Respite Care Act, authorizing nearly $300 million in grants over five years to finance the temporary help families need to relieve those unpaid caregivers.
The Act authorizes competitive grants to states through Aging and Disability Resource Centers, which must work in collaboration with state respite coalitions or state respite organizations to make quality respite available and accessible to family caregivers, regardless of age or disability. The Act requires grantees to identify, coordinate and build on federal, state and local respite resources and would help support, expand and streamline planned and emergency respite, and provider recruitment and training.
Respite care may take place at home or out of the home and allows caregivers some time off, while providing quality care and social interaction for loved ones. Respite care also helps keep families together, helps prevent abuse and neglect, and forestalls premature, costly institutionalization and possible impoverishment.
The bill's unanimous passage demonstrates the importance lawmakers place on health-care issues. Bush's support was another effort by the administration to persuade families to use home care and reduce high Medicaid expenditures on nursing homes.
Therefore, before adjourning in December, Congress unanimously approved the Lifespan Respite Care Act, authorizing nearly $300 million in grants over five years to finance the temporary help families need to relieve those unpaid caregivers.
The Act authorizes competitive grants to states through Aging and Disability Resource Centers, which must work in collaboration with state respite coalitions or state respite organizations to make quality respite available and accessible to family caregivers, regardless of age or disability. The Act requires grantees to identify, coordinate and build on federal, state and local respite resources and would help support, expand and streamline planned and emergency respite, and provider recruitment and training.
Respite care may take place at home or out of the home and allows caregivers some time off, while providing quality care and social interaction for loved ones. Respite care also helps keep families together, helps prevent abuse and neglect, and forestalls premature, costly institutionalization and possible impoverishment.
The bill's unanimous passage demonstrates the importance lawmakers place on health-care issues. Bush's support was another effort by the administration to persuade families to use home care and reduce high Medicaid expenditures on nursing homes.
Tuesday, March 31, 2009
Another reason not to wait
I've always told potential clients that if you wait to long to buy long term care insurance, you may loose your health and the product may no longer be available. I just had an experience with a client that enlightened me to another reason not to wait.
My client purchased a nice size policy about four years ago. She had hepatitis C, not treated. The company I placed her with accepted the application and she's been covered since then. Just recently, she called me to inquire about having her coverage increased. When you increase your coverage on an existing policy, you must still go through medical underwriting.
Unfortunately, since she purchased the insurance, the underwriting standards have become more strick and the company no longer found the client "insurable." Had this client waited until this year to purchase coverage, she would not be able to get insurance.
Therefore, it is not only your health that may change and make you insurable, underwriting standards may become more strict also making you insurable. With the millions of baby boomers entering their senior years, companies know their risks are going up and I wouldn't be surprised if underwriting standards become even more strict over the years.
My client purchased a nice size policy about four years ago. She had hepatitis C, not treated. The company I placed her with accepted the application and she's been covered since then. Just recently, she called me to inquire about having her coverage increased. When you increase your coverage on an existing policy, you must still go through medical underwriting.
Unfortunately, since she purchased the insurance, the underwriting standards have become more strick and the company no longer found the client "insurable." Had this client waited until this year to purchase coverage, she would not be able to get insurance.
Therefore, it is not only your health that may change and make you insurable, underwriting standards may become more strict also making you insurable. With the millions of baby boomers entering their senior years, companies know their risks are going up and I wouldn't be surprised if underwriting standards become even more strict over the years.
Sunday, March 29, 2009
Motion Picture Home Closes
Upon reading the Opinion section of today's Los Angeles Times, I realized how sad it was that people had to place they knew as home because they had depended on promises and someone elses money to make sure that they were taken care of when they could not longer care for themselves. They paid dues to the union, which only really allowed them to live in the facility. It was never a promise to fund the care. Residents were required to spend their own money until they had little left and then Foundation resources and Medical would pay the bill. Unfortunately, foundation funding ran dry and California is $203 million behind on Medical payments. There are many nursing home that are not getting paid along with the Motion Picture Home.
This is a sad reminder that the only way to make sure that you have control of how and where you are taken care of is to have your own resources These resources may mean money markets, real estate, stocks, annuities, bonds or pensions. Even the income from some of these resources may not be enough as we have seen from the fall is stock prices and value of real estate.
The one sure way to know exactly how much money you will have to fund a long term care need is a long term care insurance policy. When designing a plan, be careful to understand how much of the financial risk you are maintaining and how much will be transferred to an insurance company. Make sure you can afford to fund the difference if you don't purchase enough insurance.
When you loose your independence due to a physical or cognitive impairment, make sure you make plans to maintain your financial Independence so that you have choices over where you will receive your care and control or those decisions.
This is a sad reminder that the only way to make sure that you have control of how and where you are taken care of is to have your own resources These resources may mean money markets, real estate, stocks, annuities, bonds or pensions. Even the income from some of these resources may not be enough as we have seen from the fall is stock prices and value of real estate.
The one sure way to know exactly how much money you will have to fund a long term care need is a long term care insurance policy. When designing a plan, be careful to understand how much of the financial risk you are maintaining and how much will be transferred to an insurance company. Make sure you can afford to fund the difference if you don't purchase enough insurance.
When you loose your independence due to a physical or cognitive impairment, make sure you make plans to maintain your financial Independence so that you have choices over where you will receive your care and control or those decisions.
Saturday, March 28, 2009
How are going to protect what you haven't lost in the market?
Many people who were depending on retirement portfolios and wealth in real estate to pay for the high cost of long-term care are finding that neither option may still be a viable solution. Therefore, this is an opportune time to consider buying an insurance policy to make certain that the resources needed to pay for the cost of care will be there regardless of market or real estate values.
Many Americans who are working and saving for retirement should consider how a potential need for long-term care could quickly derail the plans they've made for retirement. Those residents who want to remain in their own homes or have some control of the type of care they receive often find that long-term care insurance is the best way to plan for future care needs. They are frequently surprised to find that working with an experienced agent who specializes in long-term care planning can help find plans that can be affordable for many people.
Time is the enemy when it comes to long-term care planning. Consider these facts:
- Generally, every year that someone delays the purchase, the premium increases. The rule of thumb is that every five years a person waits to purchase a policy, the premium doubles due to increased age.
- A change in health may limit your options, increase the cost or make it impossible to qualify for long-term care insurance.
While we can choose anytime to start saving for retirement, draft a will or fund a trust, the same cannot be said for the purchase of long-term care insurance.
Many Americans who are working and saving for retirement should consider how a potential need for long-term care could quickly derail the plans they've made for retirement. Those residents who want to remain in their own homes or have some control of the type of care they receive often find that long-term care insurance is the best way to plan for future care needs. They are frequently surprised to find that working with an experienced agent who specializes in long-term care planning can help find plans that can be affordable for many people.
Time is the enemy when it comes to long-term care planning. Consider these facts:
- Generally, every year that someone delays the purchase, the premium increases. The rule of thumb is that every five years a person waits to purchase a policy, the premium doubles due to increased age.
- A change in health may limit your options, increase the cost or make it impossible to qualify for long-term care insurance.
While we can choose anytime to start saving for retirement, draft a will or fund a trust, the same cannot be said for the purchase of long-term care insurance.
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