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LTCI FAQ’S

LTCi FAQ’s

What determines my premium?

The major factors that determine your premium (besides your age, health, and marital status) are your policy’s:

Daily Benefit (how much your policy will pay every day or month
Benefit Period (the length of time over which you will be entitled to collect
Elimination Period (how many days you must wait before being entitled to collect
Automatic Inflation Protection (whether your policy has some type of this protection built in)

Raising or lowering, lengthening or shortening these factors, will cause your premiums to go up or down. I can give you the typical care costs in your area, actual and projected lengths of claim, describe differences between various care options, and give you other information that will make it easier for you to choose the right LTCi plan.

Do Long-Term Care Insurance policies let you choose where you get long-term care?

Yes! That’s why we like them so much! With LTCi, you or your loved ones will not have to scurry around in stress or panic, when a need for care arises. Also, you will not wind up having to default to the least desirable settings for care, because your policy will be pumping out money for you and your family.

How expensive is LTCi?

The Texas Department of Insurance does not allow us to give any references to LTCi rates on this site. Please call me for prices.

Do rates go up every year?

LTCi rates are designed to remain constant. As long as you pay your premium, your LTCi company cannot change any of the terms of your policy on its own, except that it may increase the premium you pay. This happens infrequently. If this occurs, rates increase by the same percentage for all policyholders in your class.

Does the government pay for care?

From “Medicare and You 2011” p. 110: published by the US Department of Health and Human Services:

“Long-term care includes medical and non-medical care for people who have a chronic illness or disability. Non-medical care includes non-skilled personal care assistance, such as help with everyday activities like dressing, bathing, and using the bathroom. At least 70% of people over 65 will need long-term care services at some point. Medicare and most health insurance plans, including Medigap (Medicare Supplement Insurance) policies don’t pay for this type of care, also called “custodial care.” Medicare only pays for medically-necessary skilled nursing facility care or home health care if you meet certain conditions. Long-term care can be provided at home, in the community, in assisted living, or in a nursing home. It’s important to start planning for long-term care now to maintain your independence and to make sure you get the care you may need in the future.”

From “Medicare and Home Health Care” published in 2010 by the Centers for Medicare and Medicaid Services: What isn’t covered? (p. 10)

“…some examples of what Medicare doesn’t pay for: 24-hour-a-day care at home, meals delivered to your home, homemaker services like shopping, cleaning, and laundry when this is the only care you need, and when these services aren’t related to your plan of care. See page 19. Personal care given by home health aides like bathing, dressing, and using the bathroom when this is the only care you need.”

What is covered? (pp. 8 & 9):

“Skilled nursing care, Physical therapy, occupational therapy, and speech-language pathology services, medical social services, and Medical supplies.”

It is custodial care that can lead to catastrophic expenses if care is needed for a lengthy period of time. This is type of care is what LTCi is designed to pay for.

How realistic is it to expect the government pay for the type of care we will need and want? Current methods of predominantly government-funded care are already in dire financial straits – they are simply not sustainable. And this is before a bulge of Baby Boomers start needing care in great numbers! When they do, there will be a “silver tsunami” of people needing care all at once. So in my opinion, the government will simply not be able to accommodate the need for care. Furthermore, who would choose government paid, restrictive options if they could instead access quality home health care or assisted living on their own terms?

What are the odds that I’ll need care?

High! www.ownyourfuturetexas.org is a collaborative effort between private long-term care insurance providers, their authorized agents, and state government agencies, including the Texas Department of Insurance, the Texas Health and Human Services Commission, and the Texas Department of Aging and Disability Services. It has tools that allow you to estimate the cost and duration of the care you may need.

If I buy a policy in TX, will it be good if I move to another state?

Yes! Every LTCi policy I’m familiar with will pay for care in all 50 states. Some will also pay for care in the US territories or Canada. If you are planning to retire in another country, there are a good selection of LTCi policies that will pay internationally.

Reality Setting in: Nursing Homes Start to Shutter

October 31, 2011 by Honey Leave a Comment

In an article titled, “Long-term care patients face move as hospital ends service,”Manuel Coppola of the Nogales International (268 W. View Point Dr. Nogales, AZ 85621) states that “Over the next three months, 26 long-term-care patients at Carondelet Holy Cross Hospital (HCH) will have to find somewhere else to go after a decision was made this week to discontinue the residential service effective Feb. 3, 2012.”

The article tragically reports that $500 million in statewide cuts to Arizona Medicaid make reopening the facility highly unlikely.

According to Dina Sanchez, HCH assistant administrator, “For several years, Carondelet Holy Cross Hospital was already subsidizing residential care at this long-term care facility to the tune of about $1 million per year.”

The article continues, “With $1.6 million in AHCCCS (Arizona Medicaid) cuts to Holy Cross compounding the fiscal stress, something had to give.”

I believe this is the tip of the iceberg and that scenarios like this are going to begin playing out across the country. If you don’t already own long-term care insurance, it’s time to face up to the fact that the government won’t be able to pay for your long-term care.

More Realize they Need Pricey Long-Term Care

October 10, 2011 by Honey Leave a Comment

NPR, in conjunction with the Robert Wood Johnson Foundation and the Harvard School of Public Health, has recently released a new poll of Americans over 50, which was reported by NPR in a wonderful story on September 29, 2011, called “More Realize They Face Pricey Long-Term Care” . I use the word wonderful for three reasons.

First, it features my good friend and frequent Long-Term Care Insurance (LTCi) conference roommate, Sally Leimbach.

Secondly, this is the first time I have heard a radio story solely on LTCi. Usually LTCi is mentioned as an aside. The media finally seem to be giving LTCi the credibility it is entitled to!

Thirdly, the story gets it all right. It includes an interview of a consumer purchasing LTCi: hallelujah, LTCi is finally treated like the “prime-time” solution it deserves to be. It also accurately portrays people’s denial and inability to face reality. The story reports that only 7% of those polled thought that Medicaid pays for long-term care (LTC) in the US. In reality, over 50% of all LTC in this country is paid for by Medicaid.

As the title portends, more people than ever (about 2/3 of us, according to the poll) now admit they may have trouble paying for long-term care (LTC). As I have stated in the past, the public seems to enjoy dwelling in a state of denial and/or disconnect. I am sad that people don’t take responsibility and act on such information. My colleagues and I often say, in regard to responsible LTC planning, that failing to plan is more like planning to fail.

One More Study Confirms Public Unprepared

October 3, 2011 by Honey Leave a Comment

NPR aired a story this week called “Boomers’ Delusion About Health in Retirement”. It reports on a study they did in conjuction with Robert Wood Johnson Foundation and the Harvard School of Public Health. The article reports that some experts worry that when it comes to their health, boomers are still woefully unprepared — or worse, in denial.

“The mismatch between how people think the next 10 to 15 years is going to go and what current retirees experience is something that’s very consistent,” says Jeff Goldsmith. “There is no question that one distinguishing feature of our generation is this extraordinary, almost genetic optimism. And the poll results look to me like a lot of that optimism was drawn from a deep well of self-delusion.”

Here’s an example of the public’s denial, “only 1 percent of those not yet retired said they expect the amount of exercise they get to decrease in retirement, while 34 percent of retirees said they actually are getting less exercise.”

Here’s another: “only 13 percent of people over age 50 but not yet retired said they expect their health to be worse in retirement than it is currently. Yet 39 percent of retirees said their health is worse than it was in the five years before they retired.”

The report goes on to indicate the public is still unclear about who pays for long-term care. In the poll, a majority of those both retired and not-yet-retired thought Medicare, private savings and private insurance would be the primary payers if they needed nursing home stays longer than 100 days. In fact, the primary payer for nursing home care across the nation is the joint federal-state Medicaid program. Yet that was identified as the most likely payer for their own long-term nursing care by only 7 percent of retirees and 10 percent of not-yet-retired boomers.

There’s already evidence that people are starting into this retirement era with burdens. A third of the generation is obese, and another third is overweight. And even though people talk a good game in terms of exercise, it’s not clear the numbers actually support it.

The only “silver lining” the linked article gives is that when it comes to long-term care, the boomers are considerably more aware of the possibility of the crushing cost than previous generations have been. More than two-thirds recognize the threat of long-term care expenses to their financial futures.

The public is still choosing not to act to ensure their dignity, options and choices by doing responsible long-term care planning. I am very scared for them.

Dear Public,

Take heed. Make it safer for yourself and less stressful for those you love. Be empowered by being responsible. Stop making excuses to avoid planning for the future.

Sincerely,

Honey

Medcaid Loopholes Easily Exploited by Middle Class

September 11, 2011 by Honey Leave a Comment

Here’s a press release by Dale Krause, an advisor who appears to specialize in Medicaid planning. I have recently written about my qualms with Medicaid planning, which I consider “gaming the system.” By using glaring loopholes in current Medicaid laws to re-position, shield and preserve often extensive wealth, advisors like Mr. Krause are often successful at enabling their clients, people of means, to qualify for Medicaid.

Medicaid is a program that was set up to assist the indigent and handicapped: people with little or no wealth. In addition, Medicaid-paid LTC is typically inferior to non-Medicaid-paid LTC. With our country’s grave financial crisis and an oncoming Silver Tsunami of Baby Boomers who’ll need LTC, I predict Medicaid-paid LTC will get worse, not better. We the tax payers fund Medicaid and ultimately wind up paying for the schemes Mr. Krause & others like him derive their income from.

Here is the comment I emailed the author of the press release:

“Hi Dale

Sounds like you are involved with long-term care on an abstract basis and haven’t really thought through the reality of such things as the dignity and options your clients will want. I hope you will take a few moments to read the linked article I wrote on the undeserved glorification Partnership LTCi often gets. I also think it would be wise for you to create a Plan B for when the government inevitably eventually closes the loopholes your strategies depend upon.”

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