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The 70 – 70 – 70 Problem

April 8, 2013 by Honey Leave a Comment

In a ground-breaking article in the Money Section of US News & World Report (Should Long-term Care Be an Entitlement?) March 25, 2013, Philip Moeller makes the familiar point that the older population that will need long-term care (LTC) is growing and that family members who have historically provided care are fewer in number and scattered all over the globe.

Visitors to this blog are familiar with the attempt to establish a national LTC insurance program (CLASS Act), which was abandoned because of the huge costs required to provide care for all seniors in need. The annual cost of LTC is currently estimated at $725 billion, $450 billion of which is in the form of unpaid care by loved ones. And 200 billion of the remaining 275 billion real dollars come from Medicaid, an entitlement rapidly approaching bankruptcy. Direct personal spending makes up almost all of the remaining $70+ billion, and a mere $7 billion comes from LTC insurance policies.

Bruce Chernof, one of the 15 members of the newly formed national committee to study the LTC crisis, cites a common shorthand for public thinking about long-term care, which he calls the “70-70-70” problem:

70 percent of the people over age 65 will need some of long-term care during their remaining lives.

70 percent of the public does not believe they will ever need such care.

70 percent of the public thinks that if they did need such care, it is already covered by their Medicare insurance. Medicare covers only acute short-term care needs, not long-term care.

This catchy slogan captures the “DENIAL” problem that I have written about extensively in this blog, and Mr. Chernof agrees with all LTC insurance professionals regarding the desperate need for educating the public on these statistics and the importance of reasonably priced LTC insurance. Each of us can educate the public every time we speak to a local group or association, write a blog or article, or make a one-to-one presentation to a prospective client.

Denial Pervades All Aspects of Life

April 1, 2013 by Honey Leave a Comment

Jim and I saw a wonderful film recently at the Jewish Film Festival in Houston, entitled The Flat.

After his German-born grandmother’s death, the filmmaker, his mother and the rest of his family must close her Tel Aviv flat. As the family dredges through grandmother’s belongings, the grandson discovers two five-, no make that ten-thousand-pound elephants in the room.

The first is that his grandparents were very friendly with a high-ranking Nazi and his wife before the war. After the war, perhaps as a gesture of wanting to regain normalcy, his grandparents actively resumed this friendship, and they apparently had no knowledge of the husband’s position in Hitler’s regime.

The grandson also discovers abundant evidence that his maternal great-grandmother was exterminated in a concentration camp. Not only was his mother never told about what happened to her grandmother, but she admitted that she never asked about about her grandmother, either.

The Flat is an award-winning film well worth Netflixing. Click here to see what Wikipedia says about it.

Why am I blogging about this? The family in the film was obviously in denial. Denial seems to be an inherent characteristic of human nature. Is it wise or healthy to live with the type of denial I describe above? No. Is it wise to disregard the facts and not plan responsibly for long-term care? No.

I advise readers to beware of the natural human tendency to avoid talking about the unpleasant aspects of reality. When it comes to avoidance of the harsh reality you might need expensive long-term care one day, this may be especially dangerous; I have seen the consequences too often.

Retirement Crisis Ahead for Boomers and Gen Xers as Many Keep Their Heads in the Sand

March 27, 2013 by Honey Leave a Comment

A new report released by the Employee Benefit Research Institute (ERBI) this month. Its title is “ERBI’s 2013 Retirment Confidence Survey: Perceived Savings Needs Outpace Reality for Many”

This new survey echos other surveys that have forecast a bleak picture for Americans planning to retire in the next decade or two. In particular, this new Retirement Confidence Survey (Employee Benefit Research Institute and Mathew Greenwald & Associates) found:

Only two-thirds of workers reported that they and/or their spouse have saved money for retirement, down from 75% in 2009, probably due to the depressed economy.
57% of workers have less than $25,000 saved, not including the value of their primary residence, and only 24% have savings of greater than $100,000.
Denial is not a river in Egypt – only 46% of respondents have even tried to figure out how much savings they will need to live comfortably in retirement!

Tragically, Americans will continue to experience a rude awakening as they begin their “golden years”, which might be more accurately labeled as their “desperate years.” And, of course, if they have not included long-term care insurance in their retirement planning, they may see what little they have saved for retirement disappear in less than a year if they need care!

Ignore Film’s Message at Your Peril

January 30, 2013 by Honey Leave a Comment

Amour is an award winning film that has received rave critical reviews.

Unfortunately, many of you who watch the trailer will be so uncomfortable with the subject matter that you will probably not want to see the film. Even more unfortunate (and frustrating to me), after seeing the film most viewers will still be unwilling to connect the film’s message to their own need for immediate LTC planning.

George, the husband and primary caregiver to Anne in the film, was in denial about the extent of Anne’s need for care for way too long. He refused to acknowledge how bad off she was, and that there was an urgent need for additional care. It’s very likely that one reason he chose to deny the extent of Anne’s need was financial.

Finally, additional caregivers are hired. But they appear to be there for only a few hours a day. Anne’s profound need for care was meticulously portrayed, and it soon became clear that she actually needed full-time care. Any professional in the care giving industry would have quickly recognized this. Again, why was more care not brought in? I believe it was due to George’s psychological denial of the severity of Anne’s condition, as well as the exorbitant cost.

Inevitably, George’s mental and physical health also declines from the stress of being Anne’s primary caregiver and having too little respite.

Of course, if Anne and George owned long-term care insurance, their LTCi policies would’ve been pumping loads of money to defray Anne’s care giving expenses. And perhaps the ultimate, inevitable tragedy would have been averted.

Back to the beginning. How do I know that people still cannot connect the dots between the tragic outcome of Amour and the need for immediate long-term care planning? I had conversations with three ladies in the ladies room afterwards, and when I mentioned that George and Anne would have benefited greatly from owning long-term care insurance, these ladies could not connect the dots. They admitted they did not own long-term care insurance, but dismissed my overtures to discuss why long-term care insurance ownership would have altered the film’s tragic outcome. People dwell in denial.

If you read my prior blog, featuring Steve Moses, you will gain a better understanding of my grave concern about how unprepared Americans are for their possible need of long-term care.

Another avoidable, tragic situation caused by failure to plan for LTC

July 9, 2012 by Honey Leave a Comment

Today’s Dear Abby column again advises about grief caused by failure to plan for long-term care. I have pasted it beneath my blog.

The son states he built a new house to accommodate his mother. When his mother became fearful of his wife, she was moved to an assisted living facility. I have two thoughts about this: how traumatic it must have been for the mother to move at that point, and what a saint the wife is for attempting to be the mother’s primary caregiver!

We can only guess how long the son and his wife provided in-home care for his mother there before placing her in assisted living, where she remained for 10 years. The son states his mothers 10+ years of long-term care need left him financially, as well as emotionally drained, so we have evidence the mother had little income and wealth and that her son and daughter-in-law subsidized the cost of her assisted living.

The son states his mother died in 2007 and five years later he is still guilt-ridden because he had to place her in an assisted living facility.

If this family had addressed responsible long-term care planning while the mother was healthy, perhaps the mother would have purchased reasonably priced long-term care insurance (LTCi). Her LTCi would have paid for appropriately trained home health care providers the mother would not be scared of. Mother probably could have remained at home in these circumstances. This probably would have averted the family discord described, plus much of the son’s guilt-ridden grief. It also would have averted the financial drain described.

Why people don’t want to have a conversation about responsible long-term care planning while they are healthy and premiums are reasonable is beyond me.

From Dear Abby’s July 9, 2012 column:

DEAR ABBY: My mother’s Alzheimer’s became apparent after she was in a car accident. I should have noticed the signs earlier, but I didn’t. Her body recovered, her mind did not.

I built a new house with a separate suite for her. My wife and I tried to care for her for a year, but I’m disabled and Mom was afraid of my wife. There was never a moment’s peace. Fearing for our collective health, I finally placed Mom into an assisted living facility. It was one of the hardest decisions of my life.

My children criticized me but offered no alternatives. I visited her as often as possible. Because I could no longer drive, I sent someone with gifts and treats for her. Mom died in 2007 after 10 years in the facility. The last few years she didn’t know me from a doorknob. Her disease left my wife and me drained emotionally and financially. I still feel guilty for not doing more. The look of fear on her face haunts me still. Is this normal for someone in my circumstances? — ONLY CHILD IN FLORIDA

The 70 – 70 – 70 Problem

Denial Pervades All Aspects of Life

Retirement Crisis Ahead for Boomers and Gen Xers as Many Keep Their Heads in the Sand

Ignore Film’s Message at Your Peril

Another avoidable, tragic situation caused by failure to plan for LTC

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