Planning for Long-Term Care in America

Insurers getting plenty of mileage out of LTC hybrids - InvestmentNews

Traditional and Linked-product LTC sales are increasing in 2011 - good news for consumers who are seeking good options for LTC planning.

Insurers getting plenty of mileage out of LTC hybrids - InvestmentNews.

AHCA Association Report on shorfalls in Medicaid Funding

Recently, Genworth Financial released it's 2011 Cost of Care Survey, which showed that the costs for skilled Nursing Home care are rising faster than the costs for assisted living facilities or home health care.  Why is that?

One reason may be the fact that Medicaid reimbursement rates may not be covering the cost of care, according to a study by the American Health Care Association, a national organization of skilled nursing facilities.  Since Medicaid is funded in large part by states, the funding gap can vary.  This report shows the differences in state funding. 

www.ahcancal.org/research_data/funding/Documents/2010 Medicaid Shortfall Report.pdf.

In order to survive, the nursing facilities may have to increase the costs to private pay patients.  Of course, if the funding difficulties persist the private pay patients will balk at subsidizing Medicaid patients for comparable care and will probably migrate towards other care options - which could put more pressure on a facility left with more public pay residents.

What do you think?  How can the Medicaid funding shortfall be addressed?

Kiplinger's Special Insert - The Most Asked Questions about long-term care planning

Download 2011 Kiplinger's Insert

2011 Cost of Care: Long Term Care Survey - Genworth Financial

Each year key LTC insurance companies conduct cost of care surveys - surveys that help people plan for the cost of LTC.  Below is a link to the 2011 Genworth Cost of Care Survey.  There are some interesting findings:

 

1. In 2011, home care costs had a zero percent increase compared to 2010.

2. Assisted Living Facilities had a 2.4% increase

3. The highest increase was for nursing home care, which increased 5.1% for a private room.

 

The findings are in line with expectations - nursing homes are subject to a degree of "cost shifting", as private pay patients have to make the the cost of inadequate Medicaid funding from states.  Since most home care and assisted living care is private pay, they are not as susceptible to cost shifting.

 

Click below for a webpage with full details:

2011 Cost of Care: Long Term Care Survey - Genworth Financial.

Researchers: LTC Insurance Keeps Some in Homes - Life Settlements - Life and Health Insurance News

There haven't been many academic studies into how having LTC Insurance affects policyholders - this recent study sheds some light on how LTC may help keep those needing care at home... 

Researchers: LTC Insurance Keeps Some in Homes - Life Settlements - Life and Health Insurance News.

4 tips to help plan for retirement health care costs - USATODAY.com

4 tips to help plan for retirement health care costs - USATODAY.com.

LTCI Partners' Monthly Poll - May 2011

BACKGROUND: LTCI Partners is constantly thinking of innovative methods to accelerate the application process and better inform your clients. The latest tool is Application Expediter, an electronic application uploader. Previous technology solutions have included Underwriting Partner, a web based health pre-screening questionnaire and Application Partner, a service to take client applications by telephone.

Please comment below for possible publication in next month's newsletter.

¹ LTCI Partners will be introducing a revolutionary roadmap to the LTC planning conversation, Blueprint, in May 2011.

² LTCI Partners offers a free service, Application Partner, that will schedule a time with your client to take their application by phone.

³ LTCI Partners will be introducing a tool, Application Expediter, in May 2011 to easily upload applications online.

Seniorland, circa 2050 - The Boston Globe

This is a very interesting article on aging and should and is helpful reading on planning for the possiblity of extended care.  Most people tend to project the current imagry of "nursing homes" in the context of being old.  However, the idea of aging is constantly evolving and we don't know what the future of care will be like.  Despite the uncertainty, planning for LTC is critical because it will allow for the maximum of choices in the future.

Seniorland, circa 2050 - The Boston Globe.

Long-term care comes of age - CNBC article

Good article on LTC planning from CNBC.

http://www.cnbc.com/id/42539224/

What's better, daily or monthly reimbursement?

LTCI Partners Sales Consultant, Allison Hansen addresses a question frequently asked by financial advisors:  "When should I recommend a monthly benefit vs a daily benefit?

I often get the question from advisors as to which is better: daily reimbursement or monthly reimbursement?  My answer is always, “it depends”, and here’s why.  Monthly reimbursement is more flexible.  If someone has a $6,000 per month benefit, they could have expenses one day of $100 and the next day  $300, and it would all be covered as long as their total expenses for the month did not exceed $6,000.  A comparable daily benefit of $200 in this case would mean that if expenses one day were $300, the insured would be out of pocket for that $100.  Monthly reimbursement traditionally cost 4-6% more than daily benefits, but I think that is worth it when the insured purchases a benefit equal to or greater than the cost of care in their area. 

I prefer to quote daily benefits if a) the insured is price very sensitive or b) the insured is looking at reimbursement amounts lower than the actual cost of care.  Let’s use the example of $50 per day or $1,500 per month.  If this insured went on claim with a monthly benefit of $1,500, they could potentially use up all of that money in the first week and be forced to pay the remaining 3 weeks out of pocket.  If this insured had a daily benefit of $50, they would get this money evenly spaced out throughout the month and therefore be better able to budget and plan for the money they will be paying out of pocket.

There really is no right or wrong answer as to which reimbursement option is truly the best for you, but please take information like this into mind when investigating LTC Insurance.