Long-Term Care Insurance
http://thedianerehmshow.org/shows/2012-05-29/long-term-care-insurance
As Americans age, more people are considering insurance for long-term care. Medicare and health insurance pay for immediate medical needs, but not for nursing homes, assisted-living centers or home care, all of which can cost thousands of dollars every month. Just eight million Americans carry long-term-care insurance. Though they can be a huge help, the policies can be confusing and risky, and come with expensive premiums. You have to be healthy to get it and, even if you have it, you only get the benefits if you medically qualify. Diane and her panel of experts discuss the pros and cons of long-term-care insurance.
Guests
Ron Pollack
executive director of Families USA, a national non-profit organization for health care consumers.
Kenneth Apfel
Professor and Director,Management, Finance and Leadership Program, University of Maryland School of Public Policy; and former Commissioner of the Social Security Administration (SSA) from 1997 until his term ended in January 2001.
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance
Howard Gleckman
Resident Fellow, Consultant and Editor of the TaxVox Blog at The Urban Institute; author of "Caring for Our Parents."
Comments
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The 50% of Americans who are poor and near-poor can have no peace in the face of this salesmanship. The majority of people if they live to be 70 and own a little dwelling, or hold equity in one, would be smart to transfer title (sell for $1) to a younger trusted relative or friend. Hospital bills and rest home care can easily eat the value of a house in less than one year. And to be eligible for Medicaid in most states you must be near indigent. So look at the premiums on a longterm care policy if you must. You will find they only pay off for the top 20% in wealth and earnings. This show is scare tactics to extort from the 90% of us whose incomes have been stagnant for 40 years. Are Alex Trebek, Fred Thompson and Henry Winkler buzzards booked already for a show on reverse mortgages?
It's funny how the phrase "financial security" disappeared from media after the financial coup in 2008. Now they mention "preserving wealth", but in that case must be talking to the top 10%. This hour would have been better spent preparing people for the shortfall of Medicare and the gulag of rest home existence on Medicaid. Without living waged jobs longterm care insurance is a wild luxury with a diminishing market. How can DRShow ignore these facts? (One hour infomercial?) *Demographics indicate DRShow's audience is not as affluent currently as previously.
This particularly galls me as I have lost 4 of 10 rest home confined ad litem clients in the last two months due to sub-standard and delayed care. As soon as the other 6 pass I'm getting out of this dirty American incarceration of the elderly business while I still have a few good years remaining. I need to fight the system rather than enabling it. Long term care insurance highlights our institutionalized predation and lack of social justice. My "middleclass values" have betrayed me again.
I am one of those who should probably buy this insurance, with enough assets to protect but not enough to self-insure for more than a year or two of care. However, I haven't done so, and it's for one reason: I don't trust the insurance industry. I have visions of paying the premiums for years, only to see the premiums rise and become unaffordable. All that money would be gone, and I would have been better off to save and invest it. So that's what I'm doing. Yes, I'm taking a risk, but I'm not convinced that buying long term care insurance is any less risky.
Pancake Rankin obviously does not know how LTC works. If you purchase LTC at around age 40, the cost for a $3,000, 3 year policy with a 5% compound inflation is only going to run you under $35 a month. That same $3,000 policy at age 80, for example, will be worth over $21K PER MONTH! I don't see how this is a sales thing. LTC is probably the most important insurance you can own. You are either going to use it, or just drop dead....those are the only scenarios. It's a shame the Fed's could not get their act together to offer a National LTC program...would have helped a lot of people and would have ended up saving the country lots of money.
Oh really? If the "Fed's" offer a National LTC program (such as social security) how many people would have been "helped" ... and exactly WHO would realize the "savings" as he opines it would be "saving the country lots of money" ???
Is Mr. Groves educated enough to know how taxes work? You pay that's how they work.
It isn't free. Nothing is free and no money would be saved if a national LTC insurance plan were "offered" ...
Amazing the ignorance in this city. One of the grossly uneducated mouithing chants from the DNC playbook.
INAW
Have spent the last four and a half years helping my aging parents through the health care maze as a result of my WWII fathers serious fall at that time. My father had never been a patient in a hospital in his 81 years except for his own birth. After the first three months of total coverage for hospitals, rehabilitation they entered the world of assisted living, nursing homes etc etc. Went through their small savings in that time. Now their 4500.oo a month pensions, social security checks are split between my mother at home and my father in a nursing home that cost 9000.oo per month. That means the government is picking up 6500.oo of my fathers bill. I have researched and 97% of the people in this facility and other nursing homes are being covered completely or in part by medicaid government payments.
I want to know why the government does not put a cap on what nursing homes can charge since the government is picking up the majority of the tab?
And boy do I have the stories from the waste fraud and abuse that I have seen in about 15 different facilities. My father has been in four different facilities but I became so curious I started visiting as many facilities in the Dayton Ohio area that I can fit in during my time helping my parents who live three hours away from my home.
The average cost of a nursing home bed in Ohio is around 6000.oo. Yet a few of these for profit nursing homes in Ohio charge around 9000.oo per bed. Can any of your guest explain why for profit nursing homes can charge such high prices since the Federal government is picking up the majority of the tab? When will the federal government put a cap on what these for profit nursing homes can charge the government since the government is picking up the majority of the tab?
Unlike Medical insurance, LTC rates can not increase based on group usage. If they are going to increase rates, they have to increase rates for all in the State (I believe). I've had LTC for 8 years and have not had a rate increase.
Even if you do spend down a family's asset to qualify a parent for medicaid- many states can make a claim against the remaining estate of any protectable for reimbursement of costs. It's not a great safety net.
"Long term care" is a sick joke. I've seen how elderly people in long term care are treated. Being strapped to beds, forced to watch television, doing without food, medicine administered improperly, beatings - who would want that? I have a plan for my "long term care", and it costs nothing. When I can't take care of myself I'll go sit in my car, park it in the garage, and leave the engine running. I would rather be dead than be a burden to my children or be subject to the mercy of underpaid hostile "care givers".
I'd like to return to the topic of pre-existing conditions, briefly. My husband and I bought long-term care insurance policies about 10 years ago. At the time, I was a two-year cancer survivor, and he was a smoker. I was eligible, he was not. Our financial advisor explained that he was more likely than I to have a debilitating condition (e.g. stroke), requiring long-term care. Do these distinctions still make sense in today's market?
Judy Frank
East Lansing, MI
My mother was diagnosed with early on-set dementia at 63. After 3 years with home-based care we had to move her into a long term care facility. The costs of this are significant and with her condition, otherwise in general good health, we are looking at a time-line well beyond the average 3 year stay in a long term facility. Can the panel please talk more about this relatively new condition and how a person and their family can best be prepared? Thank you.
It should also be pointed out that lower-income Americans are far more likely to have chronic health conditions, and thus are more likely to be excluded from long-term care insurance. These people have to liquidate their assets when it comes time to move into assisted living so that they can qualify for Medicaid coverage for their long-term care. As a result, we perpetuate a system of intergenerational wealth loss in low income communities, which disproportionately continues to impact people of color.
I have covered aging in South Florida, home to one of the largest senior populations in the nation. And I have found this, an opinion echoed by some of your guests, to be true: long-term care insurance does not work for the vast majority of the American people. It has been very sad to watch many elders, who though they were buying security, be hit with premium increases they cant afford. Or they suddenly realize the policies they purchased from commission-hungry salespeople are going to buy them little, after years of paying in.
Anyone who promotes long-term care insurance as an overall solution, as some have, is ignoring a very real crisis facing our country: What are we going to do with the huge generation of aging baby boomers? They will live longer, but probably not healthier, and be less likely to have extended family available to care for them. Draining Medicaid is not the answer. Aging in place, with home care, can cost far more than a nursing home. Let's buck up and deal with it.
Great program. Just wanted to add that I wanted to get long term health insurance if it would provide a private room in a nursing home. I was in a nursing home for 6 weeks with a broken leg and had a private room paid for by insurance. My insurance agent said I couldn't get long-term insurance which would pay for the private room. Never want to go back to a nursing home but I'm saving to pay for privacy myself as far as my money will go.
In a future discussion I would like to hear about the outrageous costs of nursing homes and ALFs. I'm a former ALF employee, I've had my own business as advisor to families considering a place for their elderly parents and in this capacity have investigated numerous facilities, my mother was a Medicaid nursing home patient at one time, and I'm currently doing volunteer work in an ALF and Memory Care Unit, so I'm not unfamiliar with these facilities and how they cut costs to maintain their high profit margin. In my state (Florida) they have cut inspections funding to the bone in order to preserve the bottom line and even interfered with the ombundsman program. Why should operating a care facility for the elderly or impaired become a great way to make money?
I have worked in the senior housing and services industry for nearly 6 years. One of the first things I learned was to differentiate between nursing homes and other forms of long term care such as assisted living and aging in place (at home). Assisted living is relative new and a safer, more home-like environment for those needing assistance with the activities of daily living (eating, dressing, bathing, etc.). It does not, however, provide skilled medical care. The cost for assisted living is based on the level of care required, but can run $5,000/mo. I just moved here from Colorado where the rate started at around $2,500/mo. Most are strictly private pay - it is difficult to find a nice place that accepts Medicaid unless the resident's family can cover the difference between what Medicaid pays (approx. $2,000) and the market rate for the room. Anyone hoping to rely on Medicaid to fund their care is not going happy with the options.
Many people rely on selling their home to at least partially fund their care, but with the real estate market such as it is right now, it won't help much. An option that I haven't heard anyone talk about since I moved here is VA Aid & Attendance. It can be a tremendous benefit to qualifying veterans. You can learn more about it on the VA website.
There is no such thing as long term health care unless your family is willing and able to take care of you. LTHC in America is a myth.
I am 62. I had polio as a child. I also have mast cell activation disorder, a genetic condition. To add insult to this list, I was recently hit by a taxi (he drove away) that broke my femur. I've had 5 surgeries on my leg and they still haven't got it right. My leg is now 3 cm shorter and I cannot walk properly.
I never married as I did not wish to burden anyone with my health problems nor pass on my genetic condition. I worked as a scientist for the EPA and as a teacher/lecturer all my adult life. Although it was difficult, I missed only 2 weeks of work after each of the 5 surgeries over a 12 month period.
When it becomes necessary for me to have long term health care, I am opting for a shotgun. I realize this is not the preferred option for most people, but if more of us chose to end our lives rather than be a burden, then the selfish bastards would not have to worry about paying for someone else's care in their premium.
This is the reality of LTHC in America.
Cheers,
Angharad
Reality check, please! It takes M-O-N-E-Y to buy this insurance! Most people don't have the money and will never have the money. It's just that simple.
Unless one has his or her head in the clouds, of course. Boy, will they someday come back to Earth with a bang!
Many of us agree about the lack of justice in our dollar-driven system. We also agree that gravity is a drag and that the sun rises in the east.
Despite the injustice, we depend upon highly paid physicians (who drive expensive cars) and high-tech hospital systems (scanners, robot surgery), not to mention exotic and dubious pharmaceuticals (which many have come to rely upon thanks to Medicare Part D)
There is no such thing as "government" that pays those bills, or that would pay parameds who took vows of poverty. "Government" is us.
If we don't want care in old age we should avoid extended family, refuse Medicaid (Medicaid is welfare, not like Medicare which doesn't deliver custodial care), and we shouldn't buy insurance. Live fast, die young and alone.
Long Term Care Insurance is more affordable than payments on a car. It's hard today to find a policy that won't take care of you at home. It's not just "nursing home insurance" any more.
Insurance can't provide for the majority, who are in denial about the reality of aging or are uninsurable...careless with life (eg smokers, addicts) or through no fault of their own (e.g. special needs at birth).
If we respected our own lives and were so unselfish that we were willing to help neighbors financially (e.g. through universal LTC insurance) we'd be a lot better off. Keep wishing.
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Thank you for an informative show. I have been helping folks with LTC insurance for 19 years and it is so important that folks research it to see if it's both appropriate and affordable. A couple of comments:: I would have liked to have seen Partnership plans mentioned and explained. Also a discussion on discounts and the importance of planning for inflation. The premium cited for the 60 year old was on the high side (of course it depends on the daily benefit, benefits period and inflation amount) but there are also other discounts to be considered, up to 40% for a couple, either married or in a committed relationship and possibly Preferred health.
Also, in one's 40's is NOT too young to buy. I bought my own plan when I was 45 after moving my mom across the country to take care of her for 6.5 years. And now, I wouldn't even qualify due to health issues. One just never knows when their health can change. I was very surprised that none of the panelists had LTC insurance (except for the one who had a health issue)!!
I hope you have more shows on LTC planning -- on a regular basis!! It's a very important issue to address and plan for!
Thanks for your show today!
Aleta M. Wiener,
Long Term Care Planning Specialist
Tucson, AZ
Who can afford long-term care insurance? Maybe 10 percent of the population. Why? It's too expensive. No matter what one does, no one gets out of this world alive. Or without spending every penny they have, as a rule.
And on top of all that, we are going to see a sustained fall in the standard of living in the developed world for many years to come. When that period comes to an end, we will find our standard of living has fallen at least to the 19th century level, if not farther.
And that assumes that no idiot manages to set off nuclear war. That would of course solve all of our problems. There would be no one left to have any problems.
I appreciated (if not foresaw) Ms Rehm's comment about how we'll finally be able to focus on a federal tax-subsidized LTC insurance program once the current gridlock in Congress is broken. As usual here, (A) expanded social programs are an obvious 'good', (B) Republican obstructionists are an obvious 'bad', and (C) contrary to claims, this hostess is biased and partial (but golly 'salon' is such a nifty sounding word!). How about a humble dose of self-reliance. Why don't we just make it first the individual's responsibility throught savings to fund their needs in retirement, then the family's responsibility to care fo their elderly members, and if not these, then charity. Why should we pay into a federally-managed (read inept and bureaucratic) program? Why is bigger government always the right answer on this show? A tax-based program will be nothing other than redistribution of wealth as we all are forced to contribute to a fund that pays for our elder-care services but into which low income folks won't have to pay. If I can't take care of myself in my old age or find someone who will, my neighbors shouldn't be required to pay for it. Oh, but wait, this is how Germany does it! Well golly then, it's gotta be the right answer!
There are acknowledged experts available to speak accurately about LTC insurance. I would suggest Phyllis Shelton, Honey Leveen or Gene Cutler for future shows. Unfortunately, most the issues discussed today were regarding very old, pre-1995 policies, with their early industry flaws of agency only home care, inaccurate lapse assumptions and loose underwriting. Since '96, benefit triggers and policy definitions are standardized (HIPAA).
Long-term healthcare insurance is appropriate for those who have assets to lose and who prefer quality care in their home or in assisted living. There are 2.1 million references to Medicaid Planning on google, and it is no myth--ask any social worker or nursing home director. If Medicaid becomes home care, beware the sudden upshot in poverty stricken formerly middleclass Medicaid applicants. This is America--if you can get it for free, you will. The nursing homes at 66% Medicaid are failing--they are often reimbursed less than out-of-pocket cost. If more middleclass folks are LTC insured, there will be more and better home health agencies and assisted facilities, and room in the nursing homes for the truly needy.
I have seen over 200 claims paid and have plenty of happy clients. As one said, “…LTC insurance made my wife’s last days infinitely more comfortable, and for that I will be eternally grateful.”
The Baby Boom is here—let insurance help where it can. One 6 month claim w/ compound benefits will usually return all premiums ever paid by an average couple.
Kimberly—get LTCi now while your good health can still buy it for you The cost of care is only ½ what it will be in 15 years, and good policies are still available—you will pay 1/3 less for the same coverage over time than waiting 10 yrs. Those life insurance combo policies are very profitable for the insurers--buy what is costing them money!
Long-term care is absolutely necessary! My parents are receiving the benefits of that long-term care policy and the cost for their current care is $4,600 per month per person. They paid for this policy for nearly twenty years and it is worth every penny, now.
Plan ahead, transfer ownership of property and appoint a trustee. This is part of planning for retirement, whatever that might mean.
Your particpants were slanted to more negative than positive, except Kimberly, who was excellent. However, she should be focusing on marketing to those in their 40's and early 50's, as well as, having ltci
herself. Health and eligiblity can change overnight, and still would pay
less by starting younger, lower premium, than older and higher premium.
Companies can raise premiums, to all in the same class and state. The
A-rated companies/carriers had 25+ years of not raising premiums, however, due to recent downturn in earnings on reserves has caused
this to be different in the last few years. We hope going forward that
there will not be many increases. One should purchasing their coverage from an A-rated company and be leary of premiums much lower for same amount of coverage, same age, etc--expect much higher increases.
How can we expect the government to subsidize LTCI when we have
problems with social security solvency, medicare, Obama Care, etc, without raising taxes substantially? Yes, the federal government should
institute of tax deduction for ltci premiums, as some states have.
Again, good program, but when do again, please have a better balanced
group of participants.
Regarding cost of LTCI, I have helped many middle class people--by looking at their future pension, social security, designed a plan/benefits that will fit their budget and still protect their savings, help them stay at home longer and/or receive care in a quality facility. LTCI is very affordable if one does before their 60's, or health change that would cause higher underwriting rating for their premiums.
My rates have gone up regularly. I think I may have been should a bill of goods.
LTC is a difficult topic and, like others, these knowledgeable panelists must wish they could modify some of their live statements. I’d note:
1) They discussed past rate increases. Listeners considering LTCi today would benefit from knowing why today’s prices are tremendously more stable.
2) The speakers incorrectly suggested that if you’d ever been in a nursing home for knee rehabilitation or ever had prednisone or ever been declined for coverage, you could not get LTCi. If the panel had a member with voluntary LTCi experience, this issue could have been addressed properly.
3) Yes, most care is at home. Covering several hours of home care could be great for many people and would cost less. State Partnership programs would provide asset disregard in such circumstances, which was not mentioned.
4) Some relevant positive aspects of Medicaid were missed. For example, a spouse’s life-style is protected up to a point and a facility that accepts Medicaid cannot kick people out when they are no longer able to pay for care. Republicans support personal responsibility and Democrats want to protect Medicaid for the needy. Thus, there should be common interest to reform Medicaid to accomplish its intended purpose. Until we do so, we cannot open up Medicaid to home care because of the “woodwork” affect.
5) 3 of the 4 panelists are avowed supporters of mandatory insurance programs. I sensed a message that we have a temporary political problem, after which we’ll be able to create a mandatory insurance program to protect children’s inheritance from parental LTC costs. It would have been nice to have balance, with a panelist concerned that government insurance programs are underpriced, causing huge fiscal problems.
6) The State of Pennsylvania is not paying for private LTCi claims. If an insurer is unable to pay its claims, state guaranty funds assess other insurers to cover the cost of benefits.