Tag Archives: Long Term Care

Long term care insurance: If you’re a woman, be prepared to pay more!

Over ten million people have purchased long term care insurance, primarily to cover healthcare expenses that may occur in old age or during catastrophic illness.

Up until now, this insurance usually treated men and women equally.  Policy price depended on health status and age, not gender.

But this year, long term care insurance companies have indicated that they are going to start charging women more for their policies.  One of the first companies to introduce this new type of pricing is Genworth Financial Inc., purported to be the largest seller of insurance in the United States.  Their goal is to reflect statistical realities.  Women live longer than men and prepare more effectively for their futures by buying long term care policies.

According to Genworth, two thirds of its long term care payouts go to women, even though, in 2011, women only bought about 57% of its policies.  Women live longer than men and have higher rates of disability and chronic health problems.

So this spring, if their proposed plan is approved by regulatory agencies, Genworth will introduce gender specific policy pricing.  For women, that will boost the cost of a new policy by 20 to 40%, depending on age and benefit package selected.

A Genworth spokesperson said that the new pricing will only affect women applying on their own.  Lower rates will still be offered to married couples who purchase joint coverage and the changes won’t affect current policy holders.

For more information about long term care, go to www.diesmart.com.


The Cost of Dying

Paying For Long Term Care.

Today’s front page article in the San Jose Mercury News is titled “The Cost of Dying.”      The article  talks about the cost and blessing of taking care of a loved one dying a lingering death.

If you are one of the estimated  55 million caregivers now caring for a parent, a spouse, or a child,  you are familiar with the pain and strain of a lingering death.    Costs  that families pay out of their own pockets because Medicare pays only for treatment, not in-home “custodial care.”   Hospice helps, but patients must be judged to be within six months of death and its benefits don’t cover prolonged care.    Private insurance doesn’t cover care, unless the patient has a long term care policy.    Costs that aren’t included in our retirement budgets, but can bankrupt a family.



Die Smart Plan For Old Age

Long Term Care


According to the Congressional Budget office, the U.S. will spend an estimated $393 billion in 2008 for long term care, not including unpaid services provided by family and friends.

Although nearly half of us will spend the last several years of our lives requiring custodial care, there is no good answer to the question, “How are we going to pay for this?”  Unless you have enough assets to cover the costs out of pocket, which can mean a lot of assets for a married couple living in a high cost area, there are only two alternatives: Long Term Care Insurance or Medicaid.

Here are some common questions and answers about long term care.

Q. What will long term care cost?

A. The cost to stay at a long-term care facility or a nursing home is very high.  In 2007, available data indicates the average cost of nursing home care in the U.S. was $76,460.  In New York City, the average cost of nursing home care was $145,000.  In San Francisco, $101,000.

Assuming a 4% inflation rate per year, a New York resident can face long term care costs of $332,000 a year in the year 2025.  Two years of care will cost $664,000.  Five years of care will cost $1,666,000.


Q. Will Medicare pay for long term care?

A. Many older people and their children are surprised to find they have no personal insurance to cover the cost of long term care.  In 2007, a national public opinion research poll sponsored by Genworth showed some 44 percent of Americans incorrectly believed that Medicare or their private health insurance would provide the funding for their long term care needs.

FACT: When you reach age 65 you can no longer purchase private health insurance as an individual but you become eligible for Medicare, a federally funded health insurance program.

Some people supplement their Medicare benefits through a supplemental health insurance program called Medigap.  A variety of Medigap programs are available from private insurance companies.

Medicare and Medigap pay for hospital care, prescriptions and other medical costs.  Neither pays for custodial care, i.e., long-term care in nursing homes.  Medicare does pay for nursing home stays of up to 100 days if you enter the nursing home directly from a hospital, but this is primarily designed to provide post-surgical nursing, not custodial care.

If the only insurance you have is Medicare and Medigap, the cost of long-term care must be paid from your personal assets.  The other option is for you to purchase Long Term Care Insurance.

FACT:  Consumer survey:  long term care

In 2007, a national public opinion research poll showed some 44 percent of Americans incorrectly believed that Medicare or their private insurance would provide the funding of their long term care needs.  Source:  Genworth


Q.  What is long term care insurance?

A.Long term care insurance policies pay for custodial care, usually in your own home or in a facility.   These policies typically cover skilled nursing and othe services like therapy, personal care and homemaking.   They often have a per day limit, and either a lifetime cap or a time limit.  They can be indexed for inflation.

Long term care is expensive.    But the price of not having long term care coverage may be even more expensive because, if you need care, you will either have to become a burden on some family member or spend down your assets paying for long term care to become eligible for Medicaid.


Q.  What if you don’t have long term care insurance?

A. A person who has less than $2,000 in assets and income that is insufficient to pay the cost of long term care can apply for financial assistance from Medicaid to help pay for your long term care.  If you have assets, you must spend those assets paying for your long term care.  After these assets are depleted, you will be poor.   Once you are poor, you can apply for financial assistance from Medicaid.

If for some reason you are not eligible for Medicaid, you and your family will continue to be responsible for finding the dollars needed to pay for long term care.

It is unpleasant to think about needing nursing home or home care when we get older.  Even more unpleasant is the likelihood that we will have to sacrifice our life’s savings to pay for that care.  Most unpleasant of all is the likelihood that, even so, we will run out of money.

There are ways to mitigate the effect of this on your life and the lives of your heirs.  Find a lawyer who specializes in elder care and discuss your options.

Terri Schiavo was not an elderly person.  Young people have crippling accidents every day of the week, and long-term care insurance premiums increase with age, so (within limits) the younger you are when you get it the cheaper it is.


Q.  What is the Medicaid partnership for long term care?

A.  A few states are designing long term care programs providing some type of credit against the cost of insurance premiums paid back to the policy holder   This arrangement is called the Medicaid Partnership for Long Term care.


Q. What is the Veterans Aid and Attendance program?

A. If you are a qualified veteran or a spouse of a veteran, VA has a special program called Veterans Aid and Attendance available to help pay for long term care.


CLASS Act – A national long-term care insurance progran

What is CLASS Act?
The Community Living Services and Supports (CLASS) Act is a new national, voluntary long-term care insurance program; it was tucked into the Affordable Care Act passed by the United States Congress in 2010. It is federally administered but consumer financed. Its intent is to provide care for those unable to perform the activities of daily living.

How does the CLASS Act compare to the type of private long term care insurance that’s been available for many years? We asked Everett Lebherz, President of Evco Insurance Services, for his perspective as well as for a comparison to long term care insurance. Here’s what he told us.

Although long term care is very expensive, only about 5% of the U.S. population now has long term care insurance. For those who qualify, some of their long term care expenses will be covered by Medicaid. In fact, 60% of the cost of long term care for those currently enrolled in Medicaid is paid by the government. CLASS Act should change that.
What’s the purpose of the new CLASS Act?

The purpose of the CLASS Act is not to fix the problem with the majority of the private sector (who has no insurance or opportunity for government help). The purpose is to take a step towards turning long term care services and supports from a program funded largely by Medicaid (which provides approximately 60% of the money spent on eligible recipients each year) into one that is self-funded by having healthy participants pay for those participants in need of care. The plan is for any benefits under the CLASS Act to be supported solely by the premiums paid into the program.

Who qualifies?

  • CLASS Act
    Everyone who is “actively at work”! The cost will vary only by age and concessions will be made for those who fall below the federal poverty income and for students under the age of 22. It is expected that this later group will pay only $5 until they no longer qualify for the concession at which point they will be charged the normal rates based on their age.
  • Private long term care insurance
    Qualification is required but quite easy. If you are under the age of 70, you participate in a phone interview during which a cognitive test is given. Medical records are rarely ordered unless you have a pertinent pre-existing condition. If you are over the age of 70, medical records are ordered and a similar phone interview is conducted.

How can I enroll?

  • CLASS Act
    Employers have the option to offer this program to their employees. If they decide to offer CLASS Act, every employee will automatically be enrolled in the program unless they decide to opt out. Premiums will be deducted from each employee’s paycheck.  If you work for a company that doesn’t choose to participate, there will still be a way for you to participate. However, the Secretary of State has yet to develop specific enrollment procedures.
  • Private long term care insurance
    Any long term care insurance agent, such a Lebherz, can begin the application process. You can purchase this insurance on an individual basis and the government offers various tax credits to everyone who does so. When you contact an insurance agent, you will learn that there are spousal as well as family and group discounts if you can get your friends and family to apply with you. Employers also have the option to purchase private long term care insurance for their employees which can then be extended to family members.

When can I file a claim?

  • CLASS Act
    You must be enrolled in the plan for five years prior to being able to file a claim. After that, you can qualify for long term care services if you are considered disabled. The law defines disabled for this purpose as having lost the ability to perform at least two activities of daily living such as bathing, eating, dressing and mobility. There is no mention of whether policy premiums will cease once a claim is being paid.
  • Private long term care insurance
    Once approved, you can file a claim as soon as you need assistance with at least two activities of daily living. There is a waiting period, usually 30 – 90 days, during which you are responsible for the initial costs of the required services. Premiums typically cease as soon as the insured’s claim has been accepted.

 How solvent is long term insurance expected to be and how are premiums managed?

  • Class Act
    By law, it is required to project 75 years of solvency. Many groups believe this project will prove incorrect; if that is the case, the Secretary of State has the ability to adjust premiums to ensure the solvency. In addition, the board of directors, appointed by the president of the U.S., will manage CLASS Act and may impose waiting periods for new enrollees if they find the fund estimates are incorrect.
  • Private long term care insurance
    Rather than increasing premiums for current policy holders, it is likely that the insurance carriers will sell policies at a higher cost to new buyers. Once you have purchased a policy, it is expected that your premiums will remain level.

 What if I need long term care services now?

  • CLASS Act
    Enroll in this program if you feel that you are in a financial position to pay five years’ worth of premiums…and expenses…prior to filing a claim. If you don’t think you’ll have enough assets to do this, some states have programs available so you can spend down your assets and file for Medicaid. For example, Medi-Cal in California will provide support if your assets are below $2,000.
  • Private long term care insurance
    You should consult a private long term care insurance agent and determine the feasibility of a private plan.

What if I’m healthy and want protection?

  • CLASS Act
    According to Everett Lebherz, the thing to do is to opt out. If you are healthy, there may be better options. The CLASS Act is new and has many kinks. Many people wonder whether it will ever completely roll out. If it does, it’s clear that those with pre-existing conditions or already claiming Medicaid benefits will enroll with hopes of assistance in five years. This leads some to believe that those currently in need of long term care will definitely file claims when the benefits are available, most certainly increasing the cost of policies for the rest of CLASS Act participants. As premiums increase, participation will probably drop. Since the program is self funded, this may cause the program to fail at some point, leaving people who were receiving care or had paid into the program for several years without the possibility of benefits.
  • Private long term care insurance
    Plans can be designed to keep you in your home or to provide care in a facility. Plans can be adjusted to fit your budget and requirements. And premiums are more likely to remain level.

 What should I do?

The CLASS Act provides ample benefits for anyone who is unhealthy or already in need of long term care as long as they can wait five years for assistance and can accept the one benefit plan that CLASS Act provides everyone. If you are healthy, speak with a long term care insurance agent and explore the alternatives available on a private level. Look at all of your options before deciding what will work best for you.

Facebook.com/healthcare.gov and Long Term Care

The Health and Human Service Department has announced the launch of HealthCare.gov on Facebook.

If you visit healthcare.gov, you will find several tools that can help consumers make educated choices about their medical care.

One of the tools is titled “Nursing Home Compare”.     It provides a list of U.S. nursing homes which includes demographics (location and type of facility) and nursing home ratings, which include health inspection reports, staffing data and quality measures.

Another tool is called “Home Health Compare”.   The Home Health Compare tool can help you compare the quality of care that home healthcare agencies provides.

If someone you know needs help with long term care,  this information may be very useful.

This is also a go to site if you want to find more facts about ObamaCare.

You can join Healthcare.gov on Facebook at http://www.facebook.com/healthcare.gov.