Can You Afford NOT to Have Long-Term Care Insurance?

Do you have the perception that long-term care insurance is too expensive? Many financial experts say that long-term care insurance is important for protecting retirement savings. And the cost of not having coverage can be devastating.

Most people do not know realistically know what the cost is for long-term care services, which includes home health care, custodial services and nursing home care.

A lot of people think they can just pay for long-term care services if or when they need it, but it doesn't take long for the cost of care to exceed the cost of insurance. The cost of just two or three years in a nursing home can wipe out the average American's retirement savings.

Some insurance companies offer policies that provide greater flexibility as to how benefits can be used. For example, according to LongTermCareInsurancePros.com, policies that offer cash benefits instead of traditional reimbursement can cover the indirect expenses associated with long-term care, such as travel expenses, lost income for a family member serving as a caregiver, housekeeping services or other out-of-pocket costs. As soon as you trigger benefits, you receive a cash payment.

Some carriers offer a combination of cash and reimbursement in terms of paying claims.

For more information on designing a long-term care policy, Visit: LongTermCareInsurancePros

Health Care Reform is in News, But Not Understood

There has been widespread coverage of health care reform, but consumers still admit that they know very little about the health care system in the United States. This is according to the 3rd Annual Deloitte Center for Health solutions Survey of Health Care Consumers.

Here are some of the findings:

• 23% said they understand how the health care system works
• 76% grade the system a "C" or below
• 48% believe that 50% or more of health care dollars are wasted
• 57% said they are satisfied with their health plan
• 46% said they understand their health insurance coverage
• 25% do not know how much they are paying for health insurance

Even though consumers tended to rate the "system" low, when it came to their own personal experience they are much more likely to say they are satisfied, even if they do not know how much they are paying.

The survey also identified a number of contradictions when it comes to consumer perception, attitude, and behavior about health care decisions and personal health status.

People perceive themselves to be healthy, yet suffer from chronic conditions. 7 out of 8 (88%) consumers surveyed believe they are in "excellent," "very good," or "good" health, yet more than half (54%) have been diagnosed with one or more chronic conditions, and of the 56% who take prescription medications, almost half (47%) take three or more daily. Only 1 in 5 surveyed said they participate in a wellness program.

They have mixed emotions on the government's role in health care. 42% support government-mandated health insurance, 38% oppose it. 33% believe that the marketplace needs 10 or more insurance companies competing in order to ensure consumer choice.

The are financially confident, yet forego care because of cost. They are interested health records, but are slow to use them. Three in four consumers are confident that the medications they take are effective.

People are slow in making changes to their health coverage. It often takes a major event to even make people begin to think about the kind of coverage they have or should have. At this point, it may be impossible to get the coverage you want due to chronic illness or the type of medications you are taking. It is important to be proactive in regards to your health.

This is only the beginning of what is to come with Health Care Reform.

Trying to Understand Health Care Reform

I spent a couple of hours last week attending an informational seminar on Health Care reform, the Patient Protection and Affordable Care Act.

We were provided a timelime of the implementation dates for key provisions. The timeline begins in 2010 through 2018. The number of pages of this bill is over 2000 pages, which we were told is really just an outline. When finished, it could be well over 200,000 pages.

Some of the changes taking place in 2010 are:

• Provide dependent coverage for adult children up to age 26 for all individual and group policies.
• Prohibit individual and group health plans from placing lifetime limits on the dollar value of coverage and prior to 2014, plans may only impose annual limits on coverages determined by the Secretary.
• Prohibit insurers from rescinding coverage except in cases of fraud and prohibit pre-existing condition exclusions for children
• Establish a process for reviewing increases in health plan premiums and require plans to justify increases.*
• Provide a $250 rebate to Medicare beneficiaries who reach the Part D coverage gap in 2010 and gradually eliminate the Medicare Part D coverage gap by 2020.
• Authorize the Food and Drug Administration to approve generic versions of biologic drugs and grant biologic manufacturers 12 years of exclusive use before generics can be developed.

*Anthem Blue Cross who was in the crosshairs of the huge rate increases actually was approved by the California Department of Insurance. Why?

The system is broken and with all the new laws, cost containment doesn't seem to be addressed in this legislation.

I am not sure how any or all of this affect you and your families. I feel better keeping you posted and venting a little.

You can reach me at 949-854-3001 or dane@LongTermCareInsurancePros.com

You can find valuable Articles and Resources on Long-Term Care Planning

Long-Term Care Is In The News-What is Your Plan?

With health care reform passed, everyone is hearing more and more about the CLASS Act and how it will affect ones' planning for long-term care. The details of the CLASS Act are still uncertain.

What we do know and simply stated is that CLASS creates a new voluntary government program under which individuals will pay a monthly premium and will be eligible for modest benefits for their long-term care needs after five years of paying premiums.

While CLASS is often characterized as a long-term care program, it is primarily designed as a program to provide future assistance to the working disabled. Traditional long-term care insurance requires that applicants meet certain good-health requirements. CLASS will not have such health qualification requirements. The plan will be available on a guaranteed-issue basis.

Long-Term Care insurance is an important health insurance product designed to meet a growing need in this country. The good news is we are all living longer and medical advancements help us survice more illnesses and injuries than in the past. With all this said, it also means we have a greater need for long-term care.

While life insurance offers financial protection when someone dies, LTCi is a "living benefit" designed to protect you while you are alive. People need to be prepared to survive- not only physically if they get sick or need care, but also financially. If you needed long-term care, your assets could be depleted.

If you do not own long-term care insurance, here are some thing to keep in mind:

• It will be at least two years before CLASS is operational (2013) and another five years from that time benefore any benefits can be paid (2018).
• CLASS is not a contractual obligation (the way private long-term care insurance is). The provisions of the plan can be changed at any point by Congress.
• Lower premiums may be offered to healthy,low-income individuals and many in poor health will take advantage with the anticipation of benefits. As a result, those in good health (or with good incomes) will be subsidizing others. Private insurance is not based on income -- this type of 'subsidization' does not exist.
• The government plan is very limited in what it will eventually pay ($50 or $75 per day is way below the cost for quality comprehensive care at home and certainly far less than the cost for care in an assisted living community or skilled nursing home setting).
• PLUS, there are several advantages of private long-term care insurance offered on an individual basis or available through your employer.

For a free, no obligation consultation for your long-term care planning, call 949-854-3001 or 877-GO-4-LTCI or email me at dane@LongTermCareInsurancePros.com

Health Care Reform and LTC: What is the CLASS Program?

The health care reform bill (now known as the Patient Protection and Affordable Care Act), which includes the Community Living Assistance Services and Supports (CLASS) provisions has been signed into law.

Many of the details of the CLASS provisions are not yet defined and will be developed through regulation. Most of the terms of the new CLASS program that passed as part of the Patient Protection and Affordable Care Act will be developed by the Department of Health and Human Services over the next few years. Certain terms are set in statute,

including the following:
Enrollees will:

• Pay a monthly premium, through payroll deduction, that has yet to be determined, but most recent estimates indicate that the average premium will be $180-$240/month; that premium could be increased yearly to ensure that the CLASS fund is actuarially sound.

• Be covered on a guaranteed-issue basis;

• Be eligible for benefits for their long-term care needs after paying premiums for the first 60 months of coverage (i.e., a 5-year waiting period) and have worked at least three of those five years;

• Receive a lifetime cash benefit after meeting benefit eligibility criteria, based on the degree of impairment, which is expected to average about $75/day or more than $27,000 per year and is payable as long as the claimant remains disabled.

Now that the bill has been signed into law by President Obama, it will go to the Department of Health and Human Services, where the terms of the program will be worked through. From there it will be two years before the program goes into effect and another five years from that point before anyone is eligible for benefits.

Delaying the purchase of an LTC insurance policy because you think that the government program will cover your long-term care costs is not recommended. Any delays in long-term care planning can have an effect on the cost of a policy and possibly your insurability.

The advantages of an individual private LTC insurance policy are many:

• It does not require that the individual be employed.
• Offers a broad range of benefits and is better suited to address the high cost of care
• It does not have a minimum number of years an individual must pay premiums before benefit are payable: the coverage will begin paying benefits once the benefits trigger and waiting periods have been met.
• Any unused LTC insurance benefits are carried over from year to year.
• The policy provides access to care coordination services, quality providers and provider discount.

If and when the CLASS provisions are up and running in about 7 years and you have been in the workforce and contributing to the pool, you may have yourself a additional supplement to your solid private LTC insurance policy.

For a Free, No Obligation Long-Term Care Financing and Planning Consultation

Health Care Reform and Long-Term Care

Everyone is waiting for the results of the health care reform bill. Depending upon your age, one is looking at the different parts of the reform. The bill will be covering everything to demanding everyone get health insurance, Medicare reform and the Class Act (a voluntary program for working adults to help with some long-term care costs in the future).

If you are thinking that this health care reform will cover your long-term care costs, Think Again. It is time to get the information on what is long-term care, where this type of care is received and how and when people begin needing this type of care. And most importantly, how much does this cost?

What is long-term care insurance? Why is it so important to the aging baby boomers? The cost of care is staggering and increasing every year. The cost of long-term care insurance is usually a small part of what the actual costs are for care. The break even point of paying for this insurance for as long as 20-30 years could easily be as little 3-6 months of care.

Depending upon your age, financial situation and where you are going to receive your care, a long term care plan can be designed just for you.

Cost of care is different in every state. Find out the cost in your area.

For your own individual free, no obligation consultation, send an email to:
dane@LongTermCareInsurancePros.com or REQUEST A QUOTE

Long-Term Care Systems- A Comparison

A Washington Post article recently compared the U.S. Medicaid system unfavorably to the long term care systems for the elderly and those with disabilities employed in France and the United Kingdom. Going back 20 years, most of the developed world relied on a system similar to the one the United States uses: Poor enough and sick enough and you received some assistance; middle class and you were on your own (until your resources became so depleted that you no longer qualified as middle class.

Most developed countries determined that this approach was unnecessarily cruel and fiscally unwise, and revamped their systems to address the need for long term care, often in arrangements that combine government assistance with private long term care insurance. The U.S. response was to encourage its citizens to purchase private long-term care insurance. Despite tax subsidies, a government marketing campaign and efforts to coordinate private insurance with public benefits, the approach has been less than successful, as today only about seven million Americans own private insurance.


The systems in place in other countries have not been without problems, such as increasing costs and uneven availability of benefits. Germany has been forced to raise taxes to pay for the benefits it provides. France, Japan and the Netherlands have had to reduce benefits. In England, the long term care model is disparaged as the “postcode lottery,” as benefits vary by local jurisdiction. Although insurance-based systems are difficult to administer, they are superior to those that force people to impoverish themselves before they qualify for help. In revamping the U.S. health care system, perhaps legislators will examine the long term care systems of other countries and attempt to learn from their mistakes.


The responsibility should rest on you in determining what the best long-term care plan is:


Self-insure (be responsible for all financial obligations for long-term care)
Family (family pay for long-term care)
Medicaid (impoverish yourself to qualify)
Long-term care insurance (an annual premium with inflation protection to cover costs later)


For more information, schedule a consultation with a Long-Term Care Specialist, no cost or obligation.