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Archives for August 2015

Complicated LTC Financing Made Easy

August 27, 2015 by Honey Leveen Leave a Comment

I believe the comments below, republished with permission from the Center for Long-Term Care Reform, are useful for the public. They explain why long-term care insurance (LTCi) is good not only for people, but also for America. 

Here is a simple, concise overview of the the complicated principles of long-term care financing in the US:

Age WaveLTC Comment:  Let’s begin with a few facts:

  • Medicaid pays for most formal long-term care whether in nursing homes or home care.
  • Medicaid is a counter-cyclical welfare program.  It ramps up caseloads and expenditures, usually with extra help from the federal government, during recessions.
  • The United States has experienced two major recessions in the 21st century, the Great Recession of 2007-2009 being the worst since the Depression.
  • To combat recessions, the federal government employs deficit spending (as when it borrows to boost Medicaid assistance).  This is called “fiscal policy.”
  • Deficit spending (fiscal policy) has created a huge national debt, currently nearing $18.4 trillion according to the US Debt Clock.
  • To combat recessions, the Federal Reserve cuts interest rates and increases the money supply.  This is called “monetary policy.”
  • Artificially low interest rates have discouraged savings, impaired the market for LTC insurance by reducing its profitability and increasing its cost, and diverted capital away from economically productive investments and into “bubbles” of real estate, stocks and bonds, benefiting mostly the affluent.
  • The same monetary policies have hurt the poor and middle class by stifling job creation, repressing wage growth, and practically eliminating income on savings.
  • Low interest rates and a bloated money supply (monetary policy) have failed to revive the U.S. economy fully after the Great Recession, making the Fed very reluctant to allow interest rates to increase.
  • We find ourselves on the cusp of an unprecedented “Age Wave.”  The huge baby-boomer population cohort does not reach the age of heaviest LTC need (85+) until 2031.
  • Social Security and Medicare run out of “trust funds” in the 2030s, but in the meantime the federal government has to make up these gargantuan entitlement programs’ annual revenue shortfalls and pay off their trust funds’ IOUs with interest out of general funds (taxes and borrowing).
  • America’s fiscal and monetary tools are worn out.  We have too much debt to borrow more safely if interest rates increase and too much money supply to print more.
  • Our artificially suppressed interest rates are too low to be lowered further in order to combat the next recession.
  • In a nutshell, the U.S. economy may not be able to generate the revenue needed to support our long-term care safety net in the short-run and definitely cannot over the long-term without major changes in fiscal and monetary policies.
  • Ironically, this state of affairs benefits the elite at the expense of the needy for whom the elite hypocritically profess noblesse oblige.

Filed Under: Uncategorized

The Magic of LTCi Ownership

August 21, 2015 by Honey Leveen Leave a Comment

The following is a true testimonial, not a paid endorsement. It illustrates the transformative difference long-term care insurance (LTCi) ownership can make:

Magic Of Owning LTCi“Honey, buying LTCi was THE best insurance decision I have ever made. When my spinal cord injury occurred in 2013, I would not have been able to live safely without this policy. I am now in assisted living. It is the best of facilities. There is nothing wrong with my brain. I long for the mental stimulation available to me if I could live independently or even at home with help. I cannot live in such places for one reason: I am a fall risk.  I lost my ability to balance due to Osteoporosis, the cause of my spinal cord injury.

I don’t care how much money one has, paying for aids is expensive and a great way to go broke or not have anything to leave your children or anyone. When my mother came to live with me and she had not even a health insurance policy, I learned quickly what it costs to have home health care workers then later to pay for a long-term care facility. This is when I got your name from a friend.

Many thanks, Honey” ~ Patty Fitzpatrick, LCSW

Filed Under: Helpful Information About LTC, I'll Just Self-Insure, Information About LTC Tagged With: fall risk, Honey Leveen, Long Term Care insurance, long-term care facility, LTCi, www.honeyleveen.com

40 Must Know Statistics About Long-Term Care

August 17, 2015 by Honey Leveen 2 Comments

40 ReasonsThis August 9, 2015 article from Morningstar titled “40 Must Know Statistics About Long-Term Care” is powerful! I recommend this concise article for people willing and unwilling to start conversations about responsible long-term care (LTC) planning. I recommend it for those who have already planned for their LTC. In other words, I recommend it for practically everyone!

Here are just a few facts from the article:

“37 million: Number of Americans age 65 or older in 2005.

81 million: Expected number of Americans age 65 or older in 2050.

9 million: The number of Americans over age 65 who need long-term care in 2012.

12 million: The number of Americans expected to need long-term care in 2020.

78%: Percentage of the elderly in need of long-term care who receive that care from family members and friends.

34 million: Number of caregivers who provide care to someone age 50 or over.

Filed Under: Elephant in the Room, Helpful Information About LTC, I'll Just Self-Insure, Information About LTC Tagged With: Christine Benz, Honey Leveen, Long Term Care insurance, LTCi, Morningstar, www.honeyleveen.com

New Study Predicts LTC Costs and Odds

August 9, 2015 by Honey Leveen Leave a Comment

Confused WomanA recent Forbes article by Howard Gleckman announced the publication of a new study predicting the odds and costs of needing long-term care. Here’s a link to the new UE-ASPE (Urban Institute – Office of Assistant Secretary for Planning and Evaluation) Study.

Media and non-wonky people like me will find the survey difficult to interpret.  I will share what I feel readers should take away from this study.

The study interprets the incidence of paid care only!

The statistics in the new study predict a lower incidence of long-term care (LTC) need, and less financial exposure than we expected. But it only deals with Long-Term Services and Supports (LTSS), which is paid care, typically funded by savings and government (Medicare and Medicaid). Despite this limited scope and possible bias (I will not comment on that here), it gives compelling reasons to own long-term care insurance (LTCi).

Actuaries should be able to use this new information to more accurately price LTCi policies. Hopefully, this will cause increased competition in the LTCi marketplace.

The study estimates about half (52%) of Americans turning 65 today will require LTSS. Make note: LTSS consists of paid care only!

The study fails to properly acknowledge the extremely high, often catastrophic incidence of non-LTSS (informal, unpaid care, typically provided by family and friends) and the physical, emotional and phychological havoc it creates. Long-term care insurance (LTCi) pays a high percentage of this type of care.

Two out of three (66%) of older people with disabilities who receive LTSS at home get all their care exclusively from their family caregiver, mostly wives and daughters. Another quarter (26%) receives some combination of family care and paid help; only 9% receive paid help alone.

Many people who need LTC do not need LTSS. They have dementia or a chronic need for assistance with their Activities of Daily Living (ADL’s). This is precisely what LTCi pays for. Most of us do not own LTCi. People often make makes excuses and rationalize not purchasing LTCi, often with later regret. Spouses, children, and siblings (most of them women) become caregivers, not by choice, and often at great financial sacrifice.

Lost income and benefits over a caregiver’s lifetime is estimated to range from a total of $283,716 for men to $324,044 for women, or an average of $303,880.

There are additional flaws with the new study. I will not address them here. I just hope academics will use this new information well. I also hope that media will pause and research carefully before writing about this study.

In the LTCi industry we always say you should look through the windshield, not the rearview. This study uses historical information. With the increasing incidence of single adult households, the emergence of increasing numbers of “elder-orphans” (those without, at distance, or estranged from children) plus my anecdotal observations, even the best studies may prove to be inaccurate.

Filed Under: Helpful Information About LTC, I'll Just Self-Insure, Information About LTC Tagged With: ASPE, Honey Leveen, Howard Gleckman, LTSS, Office of the Assistant Secretary for Planning and Evaluation, Ubran Institute, www.forbes.com, www.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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