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The Continuum of Care

January 20, 2016 by Honey Leave a Comment

Forbes has recently done some outstanding, insightful reporting on long-term care (LTC). I am very grateful for this. It’s a welcome and deserved change from typical error-riddled LTC coverage.

Their contributor Wade Pfau, a professor at The American College and principal at McLean Asset Management, really “gets” LTC. More importantly, he has a writing style that makes complicated concepts clear and simply understood by readers.

In is January 7, 2016 column he lists and describes the LTC continuum. I don’t remember ever having seen it laid out so clearly and accurately.

He explains why Medicare only pays for short duration skilled needs under certain conditions. He explains the difference between skilled and custodial care. It’s custodial care that is bankrupting so many Americans financially, emotionally, and health-wise.

He lists excellent questions to ask of facilities.

I am very grateful for Mr. Pfau’s columns. They do the public a true service.

Long-Term Care Insurance Can Be Costly but Effective

December 26, 2015 by Honey 1 Comment

Why doesn’t this New York Times article report on what its title promises it will, which is the effectiveness of long-term care insurance (LTCi)?

While being factually correct, this article puts the wrong “spin” on things.

It starts by giving the wrong title. LTCi is not necessarily costly. What can easily be far more costly is needing long-term care for anything but a short length of time and not owning LTCi.

The article “hooks” readers in the first paragraph by describing how LTCi preserves wealth. From there, this article gives readers excuses to avoid responsible LTC planning.

The truth is, the most important reason to own LTCi is not to preserve wealth. It is to preserve family integrity by reducing family resentment, stress and discord. The fact that LTCi also preserves wealth, and does it so well, is “icing on the cake.”

Families and governments are in budgetary crisis due to skyrocketing LTC costs.

Reporters and editors need to get the above perspectives corrected. Reporting needs to be done – now – on the hundreds of thousands of families collecting from LTCi and the radical qualitative difference that LTCi creates in their lives.

Here are some examples of the harmful “spin” I’m talking about:

The article hints that Ms. Cheng’s father is collecting enormous amounts from his LTCi policy, but it is not explicit about this. Why not? Why isn’t any space devoted to describing the extraordinary, qualitative difference LTCi has made not only for Ms. Cheng, but for her father?

Does Ms. Cheng own LTCi herself? Her advice about needing correct professional assistance with choosing LTCi, having a holistic outlook about the role of LTCi in estate planning, and asking children for input and help is sage. The reporter (Mr. Wasik) should have asked her to comment about her own LTCi (if she doesn’t own LTCi, I just don’t understand why not, based on her personal experience and how wise she seems to be).

Instead, Mr. Wasik sidetracks readers with some “red herrings.”

There’s an irrelevant sentence describing how Keith Singer recommends clients with more than $500,000 should own LTCi. (I doubt he has any clients with less than a $500,000 net worth; most financial planners don’t.) This sentence is harmful to readers, giving lower net-worth people one more excuse to dissuade themselves from doing responsible LTC planning. Such people are far more prone to catastrophe resulting from unplanned LTC needs. Here’s a story about a solid middle class couple with a 0,000 net worth that was devastated by unplanned LTC costs. This couple probably could have purchased very reasonable LTCi while they were insurable.

This sentence does not report on the effectiveness of LTCi (as the title purports) and is again potentially harmful to readers : “After a 90-day “elimination” period (often partly covered by Medicare for people whose need for extra care is hastened by a stroke or other medical emergency), the policy covers all assisted living, community and home care.” This perspective is incorrect, and further goads the American public to avoid responsible LTC planning by hinting that Medicare might assist with LTC costs. Medicare-paid LTC is not only paltry and inadequate; most people are not entitled to it.

Shame on Mr. Wasik and the NYT editors, whom I otherwise hold in high esteem. For the sake of the American public, reporting needs to be done now on the extraordinary, qualitative, transformative difference LTCi has and will make for hundreds of thousands of us.

One Family’s True Story

December 6, 2015 by Honey Leveen Leave a Comment

The following testimonial was written by my colleague, Stacey Merritt. He is a leader in the health insurance industry here in Texas, and nationally. He owns www.tpasystems.net. I thank him for having the courage to share his story. We both hope it will influence more people to plan appropriately for their long-term care.

“My mother, Charlotte, a single parent for my entire childhood, worked two jobs for most of her life. In 2000, at my mother’s age of 77, I received a courtesy call from her employer, the general manager of the nicest hotel in El Paso, Texas, who cordially, but plainly informed me that she had reached the point where she should no longer be working. Of course, he was right. So, within a very few months, I arranged for her to move from her lifelong hometown to Houston, where we could be more involved and keep a close eye on her.

The next twelve years were simply awful; more awful for her, but awful for everyone nonetheless. Unable to work, to socialize in a work setting, and to drive a car depressed her. She didn’t have any assets other than her personal belongings, and we all suspected the day would come when we could no longer be her caregivers. She began withering away before our eyes.

In late May of 2008, we got a call from Life Alert – a great product that helps the elderly contact emergency services. I arrived at her apartment before the paramedics did; she had fallen and broken her hip. While the paramedics were arranging to move her as she laid still on the bedroom floor, she said, ‘I am sorry for what this is going to put you through’. Boy, no kidding!

She never lived alone again. She went through surgery and as much physical therapy as the providers could squeeze out of her Medicare. When my mom moved into our house in August, I became steadfast in being her care provider including showering her three times a week for 18 months.

My wife Kellie and I decided to add a living space downstairs onto the house for my mother. The buildout took longer than we expected; however we were able to move her into her quarters in August of 2009. At this point, she became largely incontinent yet still ambulatory. Once every hour, we commuted to her room to help her to and from the bathroom. I can’t praise my wife enough for the help that she provided during this time; everyone was burdened to be sure.

Finally, in January, 2010, she announced that she couldn’t commute to and from the bathroom anymore. This was the day of reckoning. I responded by saying, “Mom, are you sure? If you are right, this is a game-changer.” She was sure. Within a month, she was out of the house and in a nursing home as a Medicaid beneficiary. She was one of the lucky ones. Turns out that if you have your mental faculties but are physically disabled, as was the case with my mother, the waiting period to get into a nursing home is comparatively short as a Medicaid beneficiary. However, if you’re suffering from Alzheimer’s or dementia, it can take many months.

I bought a long term care plan on my mother when we were all much younger. However, I reached a point where I couldn’t pay the premiums and had to let the policy lapse. This was most unfortunate, indeed. By the time I was at a place in life when I could afford the premium, my mother was uninsurable. My biggest regret was the lack of home healthcare benefits to rely on for her care. Had that been in place, she could have stayed home longer and would have been cared for by people more qualified than my wife and me. She might even have been able to die at home.

I can certainly tell you that the LTCi premiums for Kellie and me get paid every month. And yours should, too!”

Finding Good Nursing Home Care Is Not Easy!

July 2, 2014 by Honey Leveen Leave a Comment

A newly published survey called “Raising Expectations” by AARP, The Commonwealth Fund and the SCAN Foundation, is a report card for nursing facilities across the country.

The news for us in Texas isn’t good, reports Howard Gleckman in this Forbes piece on this new study, published June 25, 2014. The research finds that on average the most affordable facilities are in Oklahoma, the District of Columbia, Utah, Kansas, Missouri, Georgia, Texas, Iowa, Louisiana, and Arkansas. But nearly half of those states—Oklahoma, Utah, Kansas, and Texas– rank in the bottom 10 for at least 2 of the study’s 3 quality measures. Texas and Oklahoma rank near the bottom for all three.

Most of Mr. Gleckman’s piece describes how unable most Americans are to pay for their own long-term care. I will concentrate instead the correlation between low cost and low quality care.

In Texas, Medicaid nursing home reimbursement is one of the lowest in the country.

Nursing homes are not where anyone with great wealth or long-term care insurance chooses to receive care.

Here in Houston, we’ve made headlines lately with a spate of nursing home murders.

If nursing homes are paid less than it costs them to actually provide care (as they are in Texas), the result is a cascade of problems, including but not limited to insufficient, underpaid caregivers, inappropriate admissions (accepting extremely needful people in order to get the census up), increased safety and health hazards, patient negligence and warehousing, the list goes on.

The American Association for Long-Term Care Insurance (www.aaltci.org) states that approximately 80 percent of long-term care insurance (LTCi) claims are not for nursing home care. LTCi gives policyholders the ability to instead stay at home or access assisted living. My own experience is that very few of the approximately 300 LTCi client claims I’ve seen paid were for nursing home care.

Because a great many people choose to ignore the need for responsible long-term care planning and are therefore unprepared to pay when the need for care arises, the majority of long-term care in the US is paid for by Medicaid (Welfare). If you don’t plan and you don’t own LTCi, you are greatly increasing your odds of ending up in a nursing home.

The State of the Long-Term Care Insurance Industry

January 28, 2013 by Honey Leave a Comment

Thanks to my friend and colleague, Stephen Moses, president of the Center for Long-Term Care Reform, for allowing me to republish this address on the future of long-term care financing and long-term care insurance in the United States. The following is an edited transcript of a speech he delivered on January 12, 2013.

Don’t miss the irony in Steve’s speech. The good news for LTC insurance is actually very bad news for the U.S. economy. The only way to reconcile this seeming conflict is to resolve the LTC financing crisis in the right way.

The Good News and Bad News About Long-Term Care

by Stephen A. Moses

I have good news and bad news.

I’ll spend one minute on the bad news and the rest of my time on the good news.

The bad news is that all the reasons consumers have been in denial about the risk and cost of long-term care still apply and they are getting worse.

Government programs still pay for most expensive long-term care in the USA.

Government LTC benefits are much easier to get than most people realize.

And the Federal Reserve still forces interest rates to near zero which compels carriers to raise premiums to compensate, making LTCI harder to sell.

OK. So much for the bad news.

Here’s why LTC insurance carriers, distributors and producers are in the catbird seat primed to do well doing good for your clients and for your country.

First of all, everything that makes LTC insurance necessary remains true and is becoming more so. For example:

8,000 Americans turn 65 every day and that will continue for the next 18 years.

70 % of people 65+ will need some LTC and 20% will need 5 years or more

LTC is very expensive: As of 2012, over $80,000 per year for a nursing home; over $42,000 for assisted living; and over $60,000 for a home health aide on a daily 8-hour shift

But we’ve known all that since the inception of LTC insurance in the 1970s. Nothing new there.

So what is new? Why will the LTC insurance market explode within your career horizons and probably during the current four-year presidential term?

In a nutshell, all the obstacles to a strong LTC insurance market are about to come crashing down.

Let me walk you through them one by one.

The demographic bombshell of aging boomers is only now beginning to explode with the first of the 77-million-strong generation becoming fully eligible for Social Security last year and for Medicare the year before.

Government programs funding LTC are like Wylie Coyote in the Road Runner cartoon. They’ve gone over the fiscal cliff still wearing a silly grin, but they’re about to fall like an anvil. Why?

Basic federal government debt is $16.5 trillion, over $52,000 for every man, woman and child in the country. Our debt to Gross Domestic Product ratio is 100 percent. We borrow 42 cents of every dollar the federal government spends. Can you believe that? We go $1 trillion deeper in debt every year. That can’t continue for long.

Medicaid, which crowds out 2/3 to 90% of the LTC insurance market according to Brown and Finkelstein, has a terrible reputation for poor care and is bankrupting the states. Easy access to Medicaid and its big loopholes will end.

Social Security pays for about 13% of LTC through Medicaid spend-through, but Social Security has a $21 trillion unfunded liability. It can’t continue funding LTC.

Medicare pays generously for nursing home and home care which enables LTC providers to survive with most of their patients funded at less than cost by Medicaid. But Medicare has a $39 trillion unfunded liability, so it can’t continue either.

All three – Medicaid, Social Security and Medicare – will be means-tested. That means they’ll be welfare programs, not social insurance, and most middle class and affluent Americans will get less, if anything, from them.

Home equity will become a major source of funding for income security, health care and long-term care in retirement. That’s good for the reverse mortgage business in the short run and for LTC insurance in the long run as more people realize they need coverage to protect their home equity.

65 million Americans are unpaid caregivers, 7 of 10 of whom care for someone over 50 years of age. Those numbers will skyrocket as boomers age.

So what does this mean for you?

We’re about to enter a brave new world of long-term care. Keep doing what you’re doing and before long prospects will be knocking on your door instead of vice versa.

The public’s been asleep about LTC risk and cost because a government safety net has softened the financial consequences of going without LTC insurance since 1965.

As I’ve explained, that’s ending.

Already you see key changes indicating the public is finally getting the message. The age of purchase for LTC insurance has fallen by a decade from late ‘60s to late ‘50s.

You see and hear many more media stories about the risk and cost of long-term care.

Businesses worry more and more about absenteeism and “presenteeism” due to employees caring for elderly parents or worrying about them instead of working. That means you’ll sell many more group and multi-life policies.

Attorneys, financial planners and accountants are getting more questions from their clients about LTC. Just last week an estate planner called me to find out who could help him protect his clients. I referred him to a major distributor.

People are getting scared. They hear the news about the federal debt and deficit and unfunded entitlements. They’re caring for elderly loved ones in huge and rapidly growing numbers. The public programs they’ve relied on no longer instill confidence.

These trends develop slowly over time. They grow and grow like blowing up a balloon. Then they pop and all of a sudden everything is different. That’s what’s going to happen.

You are in the enviable position of being in the right place at the right time. Some of you have been pioneers in long-term care insurance. We know you by the arrows in your backs.

But your time has come now.

Watch for this scenario to play out.

Assuming current government policies stay the same, the American economy will continue to lag.

Domestic and international financial pressures will force interest rates up in spite of the Federal Reserve.

Federal debt service will skyrocket putting more financial pressure than ever on government programs that fund LTC such as Medicaid, Social Security and Medicare.

Policy makers will have no choice but to cut back on benefits, eligibility, and provider reimbursements.

The quality of publicly financed LTC will continue to decline.

It is true already and will be more true in the future that access to quality long-term care at the most appropriate level is assured only to those who can pay privately.

You are the heroes who will show the next generation how to avoid the pitfalls of publicly financed long-term care.

One of the things I love most about speaking with my many friends who have been selling long-term care insurance for two decades or more, is to hear their stories about clients who have gone on claim.

Those clients are so appreciative that they elevate the producers who sold them their policies to the status of demigods. How enormously proud that must make them . . . you . . . feel.

And that’s what the future holds for you if you stay on course. You are the last line of defense between the people you meet and the dismal future that awaits them if you allow their denial about LTC risk to prevail.

So my advice to you is “Go forth with confidence and pride. Know that long-term care insurance is good and people need it. Everyone you protect is one less person to drag down the social safety net for the truly needy.”

Thank you.

Stephen A. Moses is president of the Center for Long-Term Care Reform (www.centerltc.com). Contact him at 206-283-7036 or smoses@centerltc.com.

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The Continuum of Care

Long-Term Care Insurance Can Be Costly but Effective

One Family’s True Story

Finding Good Nursing Home Care Is Not Easy!

From My Blog

Podcast Illuminates LTC Need

LTCI is Magical at Time of Need!

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