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Archives for November 2013

Jawboning De Rigeur, But of Little Use

November 26, 2013 by Honey Leveen Leave a Comment

Recent coverage of long-term care by the parent company of the Public Broadcasting System’s NewsHour, and the SCAN Foundation, caught my eye.  (Watch below)

I want to thank Steve Moses, President of the Center for Long-Term Care Reform for bringing this story to my attention.

Steve has given me permission to re-publish portions of his blog, below. You will read how Steve pokes holes in the testimonies of some of the most reputable LTC experts in the country.

Before you read Steve’s comments, I wish to editorialize. All we ever seem to see covered in the news – whether it’s mainstream media reporting on long-term care or political posturing – is jawboning about the need for long-term care conversation, discussion, and planning. The words strewn by various LTC pundits appease and sound appealing, but they are without teeth. Nothing concrete is recommended for addressing the 5,000-pound elephant in the room, which is: how do we pay for long-term care presently and when we are deluged with a Silver Tsunami of Baby Boomers who are woefully unprepared to pay for their long-term care? The lack of solutions to this mounting dilemma is disheartening, frightening, and frustrating for my colleagues and me.

I am doubly disappointed when I see such insipid, superficial reporting from sources I normally have great respect for: PBS and NPR. Here’s a blog I did about comparably inept, superficial, inaccurate LTC reporting on the Diane Rehm Show on NPR: /2012/reaming-diane-rehm/

Here’s a blog I called Neither Party has a solution for the oncoming deluge of Medicare/Medicaid services. This blog describes why neither Republicans nor Democrats wish to broach the subject of long-term care planning. Another blog, entitled Dismal Outlook for Medicare, Social Security, also explains why it is a politically unsavory no-man’s land for either party to broach the subject of realistic long-term care financing. Here’s a blog I did titled National Commission on LTC Finds No Solutions for LTC Crisis. Here are the National Commission’s actual recommendations: http://www.ltccommission.senate.gov/recommendations.cfm. Read them, and you will see the same insipid jawboning and fluff as Steve describes in his comments below.

By the way, Steve, thanks for your acknowledgement and praise for my AMG (Altruistic, Masochistic, Genius) status! (Read Steve’s comments to learn about AMG’s.)

Here is Steve Moses’s critique of the recent LTC forum, titled “Global and Regional Models for Long-Term Care: Can They Work Nationally?“:

LTC BULLET: PBS’S 6 TIPS FOR LTC MISS THE MARK

LTC Comment: Millions watch the Public Broadcasting System’s NewsHour every night. So when that show addresses long-term care it’s worth paying attention.

You can read about and view videos from a forum, titled “Global and Regional Models for Long-Term Care: Can They Work Nationally?,” that MacNeil/Lehrer Productions (the NewsHour’s parent company) and the SCAN Foundation sponsored on Monday.

But if you have better things to do, such as advising consumers on how to protect themselves from LTC risks and costs without depending on tottering government programs, let me save you some time.

Following are quick summaries of PBS’s “6 tips for averting America’s looming long-term care crisis” followed by our critique of each.

PBS Tip #1: “Keep it Local” The Urban Institute’s Howard Gleckman says don’t seek a “single answer.” Rather work from the bottom up with friends, neighbors and families taking the lead. “To the degree that we can, government can at least try to stay out of the way of those solutions . . ..”

LTC Comment: Hear, hear! Finally something from this writer with which I can agree. But true to form, he reverts to form a few sentences later, advocating more and bigger government programs.

PBS Tip #2: “Change the Financing” Former CMS Administrator Dr. Mark McClellan, currently with the Brookings Institution, says “let people control how [Medicaid] money is spent on their behalf. That’s what’s behind our ‘Money Follows the Person’ [MFP] initiatives in states around the country . . ..”

LTC Comment: Terrific. MFP programs are a vast improvement over the current LTC financing system which makes providers–not patients–the program’s customers. But “Money Follows the Person” still depends on payments coming from an unsustainable welfare program. Making Medicaid more attractive to more people is not a solution.

PBS Tip #3: “Focus More on the Poor” Dr. E. Percil Stanford, president of Folding Voice and the KIND Corporation, says “Unfortunately, considerable [LTC policy] attention from the most well-intentioned institutions and organizations has focused primarily on the middle and upper classes.” Instead, he says, they should focus laser-like on the poor elderly.

LTC Comment: Right on, but how? No answer from this source. Research shows Medicaid’s LTC program benefits the middle-class and affluent as much or more than the poor. The solution is to target scarce public benefits to the needy and use some of the savings to incentivize early and responsible LTC planning by more prosperous people.

PBS Tip #4: “Build a Comprehensive National Strategy” AARP’s Debra Whitman wants us to spend more government money to help family caregivers, grow Medicaid, expand “affordable” housing and transportation, “integrate” health care services, and eliminate LTC impoverishment.

LTC Comment: Typical AARP eyewash. Not a word about where the money will come from to pay for such wishful public program expansions. The federal government already borrows a third or more of everything it spends. It forces interest rates to near zero to make such borrowing feasible temporarily. Watch out when this bubble bursts.

PBS Tip #5: “Begin the Conversation” Jennie Chin Hansen, CEO of the American Geriatrics Society [AGS], thinks we should “chat and chew” LTC issues with our friends and colleagues creating a “study group” opportunity to “discuss the universal journey.” She says “Let’s proactively help each other build greater confidence, clarity and capacity.”

LTC Comment: Doesn’t that advice sound vacuous coming from the head of the AGS? We’ve been jaw-boning long-term care for decades without addressing the real problem, i.e. government pays for most high-cost LTC which anesthetizes consumers to the risk and crowds out responsible LTC planning and private financing.

PBS Tip #6: “Make It a Human Right” Dr. Laura Gitlin of the Center for Innovative Care in Aging says “We need to grow a long-term care system based on . . . [the] principle . . . that long-term care is a basic right.”

LTC Comment: Of all the empty rhetoric in this program, the prize for thoughtless irresponsibility goes to this proposal. If people have a basic human right to long-term care whether or not they are able or willing to pay for it, their “right” means someone else must provide LTC whether or not they are compensated for their effort. That is the definition of slavery, which is what this ostensibly caring academic actually advocates.

Closing LTC Comment: When I see the subterranean quality of LTC policy analysis displayed in program’s like this one, I’m nearly ready to despair. The one thing that keeps me going is that a few of you AMGs (altruistic, masochistic geniuses) are still out there having truly valuable conversations with real consumers about how actually to protect themselves from escalating LTC risks and costs.

The whole wobbly Rube Goldberg apparatus of government-financed LTC puts enormous obstacles in your way. It gives away what you’re trying to sell. It makes your product unprofitable by manipulating interest rates so that its programs are artificially viable. It falsely assures citizens they’ll be taken care of by bankrupt social programs already under-funded by trillions of dollars. Yet you soldier on. Somehow.

Hail to the AMGs!

Filed Under: Correcting Ignorant Public Figures, Helpful Information About LTC, Information About LTC Tagged With: Center for Long-Term Care Reform, Honey Leveen, NPR, Public Broadcast System, SCAN Foudantion, Stephen Moses, Steve Moses

Understanding Rate Hikes

November 18, 2013 by Honey Leveen Leave a Comment

Rising CostsAs far as I can tell, every reputable long-term care insurance (LTCi) carrier that’s sold LTCi for more than five years  has given its policyholders at least one rate hike. I will attempt to explain what causes LTCi rate hikes and what to do about them.

What causes rate hikes?

  1. LTC insurance policies have extraordinarily high persistency, which means that about 95% of all LTCi, industry-wide, remains on the books after it is sold. When LTCi is properly placed, hardly anyone ever drops their policy.  LTCi persistency is higher than actuaries anticipated
  2. LTCi policies also have incredibly long “tails”, meaning that an LTCi policy sold to a 55-year old might stay on the books 30 or more years before it is collected from
  3. Protracted, low, interest rates
  4. Claims that last longer than expected

These characteristics combine to cause a perfect actuarial storm for LTCi carriers and policyholders.

LTCi’s high persistency rate and long tail are unique. Because of both of these traits, when an LTCi policy is issued, the carrier must post very large amounts of reserve funds. The carrier invests the reserves in conservative, long-term assets. The majority of LTCi’s profitability is derived from interest earned on these posted reserve funds. When interest rates plummeted unexpectedly in recent years and stayed down for so long, when policies experienced higher than predicted persistency rates, longer “tails” and claim durations, prior actuarial assumptions became incorrect. Rate hikes are a means to adjust for these inaccurate assumptions and to ensure that all policies are paid in full when clients collect on them.

It’s a good thing LTCi carriers do this. They act in a responsible way. I would rather have LTCi carriers give rate hikes to be able to honor their obligations to policyholders, than behave like the federal government and make financial commitments that it cannot meet in the future.

If clients cannot increase their payments to cover the rate hikes, the majority of LTCi carriers allow policyholders to pare back their LTCi at time to get their premiums back down. Even if an LTCi policy needs to get pared back to keep its premiums affordable,  the policyholder will normally still have a high-performance policy.

What causes public alarm and outcry over LTCi rate hikes?

When I get client calls in response to news of their LTCi rate hike, reactions typically consist of fear, anger or a mixture of both.

I blame the media and the insurance industry for much of  these reactions.

The media is historically under-educated on the subject of LTCi. Today, with fewer journalists  and less freedom than ever to adequately research before tight deadlines, the media often gets the story of LTCi rate hikes all wrong. There are exceptions. Terry Savage is one. She’s one of a dying breed of true journalists with the luxury of being able to meticulously research her stories before they’re published. More often than not, media runs “if it bleeds, it leads” stories about LTCi. Such incorrect stories describing “intolerable” LTCi rate hikes, without providing adequate explanation, are the norm in mainstream media, not the exception.

The insurance industry must also accept some blame because of its high employee turnover. It is highly unusual for the selling agent to be still active, accountable and present when clients receive rate hikes.  And when policy holders inquiring about the increased premiums do not receive the proper explanations and information, their logical reaction is a combination of anger and fear. When this  results, lacking a competent agent’s insight, help and advice, policyholders too often make the wrong decision about their LTCi policies.

The truth is, even with rate hikes factored in, the original LTCi policy is normally still a steal of a deal. It is easy to prove this. All we need to do is take the rate hiked LTCi policy’s current monthly or daily benefit (if it has built-in automatic growth every year, its current values are usually significantly higher than what the policy started at). We then compare rates for a replacement LTCi policy at the policyholder’s current age, not their original buying age. When we compare the prices of equivalent new coverage with the present policy’s benefits, and at the client’s present age, the results are normally quite shocking. Even with the rate hike taken into account, the original LTCi policy is still very inexpensive, compared to what a new, comparable policy would cost.

In my experience, policyholders calm down when they understand the impact of insurers’ claims experience and low interest rates. When the circumstances causing LTCi rates hikes are explained to them in a businesslike, rational, professional manner, the majority of my clients choose to keep their LTCi policies and tolerate the rate hike.

I lament that so many LTCi policyholders have no one they can trust and turn to for advice when their rate hike letter arrives. This can cause unintended, bad headlines and publicity for LTCi. This in turn gives people and families additional excuses to put off having conversations about responsible and reasonable long-term care planning.

I have seen in excess of 300 of my clients’ LTCi policies pay out lavishly and with ease, exactly as planned. This has given my clients increased dignity and options. It has prevented much stress and strife, both emotional and financial, for my clients families. I have never had a single claim denied in the 23 years I’ve been in practice.

Filed Under: Helpful Information About LTC, Information About LTC Tagged With: Helpful Information About LTC, Honey Leveen, Long Term Care insurance, LTC Insurance, LTCi, LTCi rate hikes, www.honeyleveen.com

Happy National Long-Term Care Awareness Month!

November 13, 2013 by Honey Leveen Leave a Comment

LTC Awareness Month November is Long-Term Care Awareness Month. The U.S. Congress has urged “the people of the United States to recognize (this) as an opportunity to learn more about the potential risks and costs … and the options available.” We’re proud to support this important educational campaign.

Long-Term Care Awareness Month was created by the American Association for Long-Term Care Insurance (AALTCi). It’s purpose is to encourage the public to plan for the possibility of needing long-term care well in advance of when it might be needed.

You protect against other risks like a car accident or house fire. A need for long-term care is a risk to your savings and to your retirement. It will impact your family and loved ones. Just as it is smart to plan ahead for retirement, it’s smart to plan now for long-term care.

Filed Under: Helpful Information About LTC, Information About LTC Tagged With: AALTCI, AALTCI.org, Honey Leveen, LTC Awareness Month, www.honeyleveen.com

This Blog is Deemed One of the Most Influential

November 11, 2013 by Honey Leveen Leave a Comment

Top 7 BlogsOn October 22, 2013 LifeHealthPro cited wwwltcqueen.com as being one of the seven most influential blogs in the health insurance industry! I am deeply honored. I was also pleasantly surprised!

It takes a village. I want to give special “shout out” to Melinda Taylor of www.weborization.com, my brilliant webmistress. Melinda does more than beautiful website design (she is responsible for designing and establishing www.honeyleveen.com). She also gives great advice on how to harness to power of the Internet. Melinda is the one who recommended I start blogging, and then taught me how to do it.

I also want to thank my dear husband, Jim Goodale, grammarian par excellence. Jim “proofs” and edits every one of my blogs before they’re posted.

Filed Under: Uncategorized Tagged With: LifeHealthpro.com, Melinda Taylor, www.weborization.com

A Single Top Income Could Buy Housing for Every Homeless Person in the US

November 8, 2013 by Honey Leveen Leave a Comment

Jim and I just saw a disturbing /engrossing/very important film called “Inequity for All”. I encourage everyone to see this film! It had a huge effect on me. It takes complex, abstract economic concepts, adds humor and the human element, and makes these concepts very approachable and easy to understand.

From the film’s site:

  • In 1983 the poorest 47% of America had $15,000 per family, 2.5 percent of the nation’s wealth.
  • In 2009 the poorest 47% of America owned ZERO PERCENT of the nation’s wealth (their debt exceeded their assets).
  • At the other extreme, the 400 wealthiest Americans own as much wealth as 80 million families – 62% of America. The reason, once again, is the stock market. Since 1980 the American GDP has approximately doubled. Inflation-adjusted wages have gone down. But the stock market has increased by over ten times, and the richest quintile of Americans owns 93% of it.

How does income inequity pertain to responsible long-term care (LTC) planning?

When I began my long-term care insurance career in 1989, sales of long-term care insurance (LTCi) nationwide were slow. The biggest battle I fought was people’s ignorance, not fear. In those days, people insisted the government would pay for their long-term care, their kids would take care of them, or they would never need long-term care. The media, too, were very ill-informed. Most media coverage disparaged LTCi at every opportunity, and called it a non-essential rip-off. Even the insurance industry considered LTCi to be its illegitimate step-child in those days.

In 2013, the above issues have pretty much been dismissed. Studies today prove the majority of people now admit they might need LTC, and that they are financially unprepared to pay for it.

Interestingly, LTCi sales still languish

In today’s world, the ever-present stress of job insecurity, having to stay in a job you hate, toxic co-workers, working in order to have medical insurance, longer hours, job cutbacks, stagnant wages, higher tuition, overhead, and debts, with no visible way out of such predicaments, is common. Many are understandably scared.

When people live with these types of fears, they often suffer from emotional, irrational inertia and the inability to act affirmatively. We LTCi specialists can show them $50/month premiums they can easily afford. They might have nursed their own mother for years, at considerable physical and economic loss, yet they are paralyzed with fear and do not purchase reasonably priced LTCi. They cannot act.

Inequity for All describes the vicious cycles that result from income inequity. Slow LTCi sales, despite the fact that most now understand LTCi ownership is the only rational solution to big problems many of us will face, is one more dangerous by-product of this nation’s mounting income inequity.

Filed Under: Uncategorized Tagged With: Honey Leveen, income inequity, Inequity for All, Long Term Care insurance, LTCi, Robert Reich, www.honeyleveen.com

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Phone: 713-988-4671
Fax: 281-829-7177

Email: honey@honeyleveen.com

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Honey Leveen, LUTCF, CLTC, LTCP
“The Queen, by Self-Proclamation, of Long-Term Care Insurance (LTCi)”
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Phone: 713-988-4671
Fax: 281-829-7177

Email: honey@honeyleveen.com

Email: honey@honeyleveen.com

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