Honey, Author at Long Term Care Insurance Expert | Honey Leveen

Reaming Diane Rehm

June 22, 2012 by Honey 6 Comments

Believe-it-or-not, not everything you hear on the radio is true! I’ve just mailed the following letter to Diane Rehm, who recently aired a show on Long-Term Care insurance (LTCi) that contained many inaccuracies.

I’ve been specializing exclusively in sales and support of LTCi for over 22 years. Sadly, I can still only dream of the day that long-term care insurance will be truthfully and accurately covered by the media.

June 21, 2012

Dear Ms. Rehm:

I enjoy listening to your show whenever I can.

As an expert who has specialized in the placement of long-term care insurance (LTCi) policies for over 22 years, I took great interest in your May 29, 2012 program.

I have just listened to this show again online, this time isolating many inaccuracies.

Not a single one of your panelists represented the LTCi industry! One is a journalist, three are academics and or work at a non-profit. None are insurance licensed or have direct experience selling LTCi.

This was not a program on long-term care insurance. This show was about exploring how and why the government needs to pay for long-term care. This show could or should have more aptly been called “Options for Publicly Paid LTC” or “How to Fix Long-Term Care,” or “Why Publicly Paid LTC Needs Re-vamping.” This is Mr. Gleckman’s area of expertise and you spent a lot of on air time with him. Mr. Gleckman is unqualified to answer many of the questions you asked about LTCi, however, as were your other panelists.

I know how strongly you must feel about helping your listeners, but this program has hurt them. I understand this was inadvertent, but because your guests attempted to address questions they were unqualified to answer, LTCi was unfairly disparaged.

On the following pages I have identified just a few specific instances where false on-air statements and/or answers were given, resulting or the unwarranted disparagement of LTCi.

Your listeners deserve to know the truth about LTCi. Studies show that over 95% of all LTCi claims are paid and that LTCi policyholders are very satisfied at claim time. The reasons that claims are rejected are straightforward and should have been clearly explained to your listeners.

LTCi premiums do not have to be expensive. What can be expensive is needing LTC for a lengthy amount of time and not owning LTCi.

LTCi is about making sure that people have the dignity, options and choices they’ve been accustomed to throughout their entire life, including at the end of life, when the cost of healthcare is most likely to be catastrophically high. You did not emphasize this, yet this is what should have been highlighted. In addition, LTCi preserves wealth. Most people buy LTCi for the first reason and consider wealth preservation to be a secondary benefit. (This is why people with high net worth AND people with barely any net worth often buy LTCi.)

The primary reason why more people do not own LTCi is because they are simply unwilling to discuss or imagine a future in which they might require long-term care, not because premiums are high.

Mr. Gleckman’s goals for public LTC financing sound great in theory, but in light of practical issues like today’s political environment and huge budget shortfalls, LTCi policyholders do not and will not count on this. And neither should Americans without LTCi.

Currently, the majority of LTC in the USis paid for with government dollars. Few things in life are easier to demonstrate than the already inferior quality of government-paid nursing homes, and this is before the deluge of Baby Boomers starts overwhelming this system.

This program has hurt your listeners badly. You would do your listeners a true service if you would invite some guests who are actually experts on LTCi onto your program. I would be happy to help you identify such individuals.

Please see the following pages for examples of falsehoods aired on your program.

Sincerely,

Honey Leveen

Documentation of May 29, 2012 Diane Rehm Show LTCi disparagment

Minute 2:10

Ms Langford states that Lifetime benefits are “extraordinarily expensive,” which is false and disparaging of LTCi.

Minute 2:45

Ms. Langford states that built-in 5% compounding is what has driven recent Long-Term Care Insurance (LTCi) rate hikes. This is patently false. The primary reasons are: higher than anticipated persistency and artificially protracted, low interest rates on the sizeable reserves that insurance companies are required by law to maintain to cover claims. For more information on the causes of recent LTCi rate hikes, read the article National LTC Events, found at

http://archive.constantcontact.com/fs024/1102230271684/archive/1109959361711.html

Ms. Langford quotes the average cost of care as $238/day. This is the average cost of nursing home care. People who own LTCi are highly unlikely to receive care in nursing homes because LTCi enables them to afford preferable options like assisted living and home health care. However, people who do not own LTCi and spend down their life’s savings until they qualify for Medicaid will likely wind up in nursing homes. It is wrong to peg the average cost of care for a LTCi policyholder at $238/day.

Mr. A states that LTCi is for the relatively affluent, this is false.

Minute 4:38

Repeatedly, points are made about LTCi preserving wealth. LTCi is primarily about preserving dignity and options, then wealth. I did not hear discussion of how much choice LTCi offers at all. This was a very large omission.

Minute 5:00

LTCi is not just for the top 15%, it predominantly for the middle class, who are most exposed. Very affluent people, as well as those with little net worth, also purchase it. Virtually all my policy holders want to ensure their dignity by having options and to reduce and/or avoid family arguments about money. LTCi is a solution that can be reasonably priced for almost anyone insurable, if they willing to learn about it.

Minute 5:50

Ms. Langford states the Lifetime benefit periods have driven recent LTCi rate hikes. Again, consult the brief article National LTC Events at

http://archive.constantcontact.com/fs024/1102230271684/archive/1109959361711.html

for the correct explanation of recent rate hikes. Ms. Langford also stated that Lifetime benefit periods and 5% compounding have caused recent LTCi market contraction. The cause of LTCi market contraction is the same cause as the recent LTCi rate hikes: higher than anticipated persistency and artificially protracted, low interest rates.

Minute 6:40

The discussion was on nursing home care. This is not where most LTCi policyholders get their care. People who own LTCi can normally get care at home or in an assisted living facility.

Minute 7:20

Mention was made that LTCi premiums are too high for moderate income people. This is false! What a disservice to your listeners! The panelist further discourages purchase of LTCi by stating that it is not a product for the broad middle class. This is false. LTCi can be made very affordable. The conversation was steered towards the use of Medicaid for LTC provision. This is economically irrational and unsustainable, and what about the quality of Medicaid-paid LTC? What is your preference? To be marooned in a Medicaid LTC facility, or would you prefer to receive your LTC at home or in an assisted living facility? The quality of Medicaid-paid LTC is a subject that was simply not addressed by your panelists. Furthermore, they are unqualified to answer your in-depth questions about LTCi and came to you with a clear anti-LTCi bias.

Minute 20:00

There was discussion of the stability of LTCi carriers. If you’d had actual LTCi experts on, they would have explained how and why LTCi carriers are enormously stable, and in fact a lot more trustworthy and capable of paying for LTC than the government is. What a pity LTCi was again disparaged.

Minute 20:18

A comment was made about the “disarray” of the LTCi industry, I believe by you. This is an inflammatory, false, and disparaging comment. The LTCi industry is in a state of contraction, not disarray. This comment was not useful to the public who are eager to actually learn about LTCi. Instead, throughout this program, the public was dissuaded from carefully evaluating LTCi. This was a true disservice.

Minute 22:04

Mention of LTCi’s high cost was made. LTCi can be made very affordable. What’s not affordable is needing LTC for a lengthy amount of time and not owning LTCi. If your panelists were qualified to talk about LTCi, they would have said this.

Minute 30:50 and again at minute 51:40

There was discussion of “surprise” rate hikes. LTCi rate hikes are unusual. LTCi rate hikes are neither arbitrary nor easy to get, due to strict government regulation. Disclosure of the possibility and carriers history of rate hikes is made obvious in all LTCi sales materials. Agents are carefully trained to explain this possibility and can be sanctioned if they don’t. All clients should understand this can happen when they place their applications.

Families’ Resources for Financing Long-term Care (LTC) Have Declined Precipitously

June 21, 2012 by Honey Leave a Comment

According to “Family Net Worth Drops to Level of Early ’90s, Fed Says” (New York Times, June 12, 2012), the median American family’s net worth in 2010 has dropped to its level in the early 1990s – a 40% reduction from $126,400 in 2007 to $77,300 in 2010! Three quarters of the drop was caused by the crash in housing prices so although we may regain a portion of our losses, it will likely be many years before we climb back up to the 2007 figure in real dollars.

Furthermore, median income also declined from $49,600 to $45,800 during the same period. So Americans are earning less and have far less in reserve, thanks to the catastrophic recession beginning in 2007.

What does this mean for the 75% of Americans who will need LTC after they reach age 65? Even though they may be struggling to make ends meet in these hard times, they had better budget for reasonably priced LTC insurance premiums NOW to ensure options, dignity & choices in accessing the care they need. Otherwise, they may find themselves bankrupt and marooned in a Medicaid nursing home.

“Life Is What Happens to You While You’re Busy Making Other Plans” (John Lennon): Part II

June 14, 2012 by Honey Leave a Comment

In “Counting on an Inheritance? Count Again” the June 11, 2012 Wall Street Journal documents trends that are becoming all too familiar to Baby Boomers. First, their parents are living longer. “How much longer?” the article asks. “Thanks to medical gains, a 65-year-old man has a 60% chance of living to age 80 and a 40% chance of reaching 85. For women, the odds are 71% and 53%, respectively.” Therefore, Mom & Dad are much more likely to spend your inheritance simply to make ends meet as they age.

AND if you add in the cost of long-term care, which 75% of Americans over age 65 are likely to need, you might as well bid fond farewell to that lump sum you were planning on after both parents pass.

Second, just like the Boomers, their parents have seen their investments shrink substantially in the past few years – which will lead to an even smaller inheritance for the children. In fact, the Boomers may find themselves pitching in to help support Mom & Dad! According to a recent study from Northwestern Mutual Life Insurance Co. in Milwaukee, the WSJ article notes, “…when asked how prepared they feel to live to various ages, one in three surveyed adults age 60-plus said they didn’t feel prepared financially to live to age 85.” And, sadly, many Boomers avoid such discussions with their parents – until it is too late.

On the positive side, the Wall Street Journal notes that some financial advisors are recommending (FINALLY!!!) that Boomers help their parents pay for long-term care insurance (LTCi) premiums to defray potentially catastrophic costs as they age. The lack of these policies can lead to family squabbles about the quality of care that Mom & Dad need and their cost. Of course, any Boomers who have to struggle with this dilemma should certainly consider LTCi for themselves to capture insurability and low premiums while they are still healthy and spare their own children future headaches.

A Life Worth Ending – Part II

June 11, 2012 by Honey Leave a Comment

In my prior blog, I described the May 28, 2012 New York Magazine headline story, “A Life Worth Ending“, a poignant and compelling piece about a woman who should be allowed to die, yet cannot.

Here is a re-print of the letter I’ve just sent to this article’s author, Michael Wolff:

June 11, 2011

Dear Mr. Wolff,

Thank you for your brilliant, poignant, soul-baring article in the May 28, 2012, edition of NY Magazine.

Everything in your article is factual and realistic, except for your flimsy rationale leading to your decision against owning long-term care insurance (LTCi).

Here are some rational admissions: “Not only do I have the cash (although not enough to self-finance my decline)..,” “The costs for my mother…who, for the past eighteen months…has not been able to…address her most minimal needs…come in at about $17,000/month.”

Eighteen months times $17,000 equals $306,000 that she has incurred in long-term care costs so far. You thank your mother for purchasing LTCi and state how well it has contributed to her high care costs. After providing readers with evidence and probabilities, you convince yourself that you will not wind up in a similar situation. This makes no sense to me.

By your description, your mother should have, or could have started collecting from her LTC insurance three years ago, after she fell. You go on to describe in detail your denial and failure to recognize the severity of her needs earlier on. You like dwelling in denial!

I can’t tell the date your mother had the surgery that put her into “stark and dramatic post-operative decline” and cognitive “free fall.” It is clear to me that even before this catastrophic downturn, your mother collected significantly more from her LTCi than she paid into it. In addition, and equally or more importantly, her LTCi has afforded your family improved options and been an emotional blessing to you, your siblings, and your children.

Prior to her surgery you describe your mother as being muddled and gently sinking. After the surgery you describe her as being “reduced to a terrified creature.” Many of us favor legislating more individual control over dying and more dignified deaths. However, according to your narrative, until your mother’s surgically induced rapid decline, it does not sound like she experienced the tragic “disquiet…bewilderment and resignation” and unmitigated anger you describe.

In other words, prior to her surgery, although she needed care for some time, it appears that she had some quality of life. Even if improved options for death were available, it doesn’t sound to me like she was ready to “pull the plug” and trigger a “do-it-yourself exit strategy” at that point.

You close your article stating you will, “be trying to work out the timing and details of a do-it-yourself exit strategy. As should we all.” This is an excellent way to end your article, Mr. Wolff, but this is off-the-deep-end irrational, and not even an original cop-out.

I don’t understand how someone as highly educated, eloquent, and well-informed as you can describe the high odds and costs involved with long-term care, tell readers you have the income to afford LTCi, describe the financial and emotional benefits LTCi ownership has brought to your family, and then make such a flimsy and irrational excuse not to buy it.

If you have the gradual decline you describe, like so many of us healthy, educated, compliant, long-lived people will, and do not own LTCi, your kids may not be very appreciative when they wind up with major, instead of minor caregiving roles, disrupted lives, or money-hemorrhaging induced resentment towards each other. All of this would be largely avoidable with responsible LTC planning, not flimsy excuses.

I question why your premiums were quoted at $5,000/year. Even in NYC, where care costs are much higher than in other parts of the country, there should be plenty of lower cost LTCi premium options for you. Perhaps your flimsy, irrational excuse not to buy LTCi was merely a reaction to the premium quote. In addition, you describe you live with someone. Enough of the excellent LTCi carriers may grant you hefty full or partial spousal discounts, even if you are not married.

Sincerely,

Honey Leveen, LUTCF, CLTC, LTCP

A Life Worth Ending

June 10, 2012 by Honey Leave a Comment

In the May 28, 2012 New York Magazine headline story, “A Life Worth Ending“, award winning journalist Michael Wolff brilliantly and poignantly describes his mother’s decline. He describes her as being in a continuous state of disquiet. “Her bewilderment and resignation somehow don’t mitigate her anger.” He states she has been “reduced to a terrified creature.”

This well-written and compelling story should be a “must read” for all because every one of us has been or will be directly involved with a need for long-term care.

Mr. Wolff mentions that his mother owns long-term care insurance (LTCi) and has collected from it handsomely. He also gives useful and correct statistics and information on the costs and odds of needing long-term care (LTC).

Most disturbing to me is Mr. Wolff’s refusal to purchase LTCi, even though he admits the odds he will need LTC are quite high, and that he would like to reduce family strife. He also admits he can readily afford LTCi premiums. This refusal is based on the flimsiest and most irrational denial. I wish I could say such blatant denial was exceptional, but concerning reasonably priced LTCi and responsible LTC planning, such excuses are unfortunately the rule.

In my opinion, the primary reason more people don’t own LTCi is because they irrationally convince themselves that they will not need LTC, despite the very high odds they will. When people fail to plan responsibly yet wind up needing LTC, we often see largely avoidable, heartbreaking costs and family suffering.

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Reaming Diane Rehm

Families’ Resources for Financing Long-term Care (LTC) Have Declined Precipitously

“Life Is What Happens to You While You’re Busy Making Other Plans” (John Lennon): Part II

A Life Worth Ending – Part II

A Life Worth Ending

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