Gentiva provides in-home care for patients, most of whom are elderly. Odyssey provides hospice care for those in their last days.

The merger suggests convergence and consolidation across the wide spectrum of care for aging Americans.  The spectrum includes home health care, assisted living, long-term health care, nursing home care and hospice, says Bill Buhr, an analyst with rating firm Morningstar.

The Gentiva acquisition of Odyssey, pulling two of those elements into one organization, is “a transaction that can overnight change other industry player strategies,” he said.

Sophia Snyder, an analyst with market research firm IBISWorld, agrees. The Gentiva-Odyssey deal is an important diversification for a provider of home health care, she says.

It’s a wise strategy as Medicare and Medicaid restrain and even reduce payments to providers of health services. Most patients with in-home care, long-term care, nursing homes and hospice are under the umbrellas of Medicare and Medicaid.

Improvements in coverage won’t kick in until 2014, she notes. “By merging with other providers, industry operators are able to spread costs, such as administration, marketing and purchases, over more locations.”

Gentiva’s Odyssey Buy Sector Game Changer

With that said, the article continues by saying that most Americans are sorely behind in their savings for retirement.  The statistics they reported indicated that 36% of working Americans over the age of 55 have less than $25,000 in retirement savings.  Not enough to retire on let alone if there is a major health event.   Health care costs rise faster than even inflation does.  So this means that even if inflation has been taken into account for retirement plans, a major health event could still suck those savings and retirement funds faster than planned.

The article was even more pessimistic when it talked about Reverse Mortgages as an option for retirement.  It mentioned Yale economist, Robert Shiller, as beleiving that home prices could possibly decline by 30%.  Wit this scale of decline, there is no equity left to do a Reverse Mortgage.  Downsizing is all that is left…

This artilce seemed all doom and gloom.  We all see the problems out there…has anyone seen someone with solutions?

Scott Olson, author of “Making Long Term Care Insurance Easier,” has been selling insurance for over 13 years. He sold face to face until he became a care-giver and had to spend much of his time providing in-home care. He now works over the phone and online with his clients. He is pretty unique in his approach because what he does is to help clients shop for Long Term Care insurance – not “sell” it to them.

Scott was one of the first two hundred insurance professional in the country to get the CLTC (Certified in Long-Term Care) designation. This designation was started in 1999 and requires coursework and successfully passing an examination. “The CLTC course reflects the nature of long-term care which is a continuum of care, housing and services people may need when they live a long life. Students are provided the information and training needed to offer guidance to families on a range of issues including home care, assisted living, nursing homes, social services, taxes, law and most important, what will pay for these resources.”

LTCD: Why write the book?

Scott Olson: Two reasons really. The first is that most people have no idea HOW a long term care insurance policy works. It is different than medical insurance that it can be difficult to understand.

The second reason is that people are making decisions on features that are insignificant. There are a lot of “bells and whistles” to some policies that, when looked at logically, add little value. Consumers aren’t focusing on what really matters – what will give you the most value?

LTCD: What are some examples of confusing bells and whistles?

Scott Olson: The Survivorship Benefit is the first that comes to mind. This feature sounds great –survivors have the benefit of this policy, but in reality this feature often comes with a lot of conditions. It might not be worth it because it might not help. For the same amount of money, you could get a different feature, with not as many conditions, that could help you in a much larger way. It is about weighing what is really important and not focusing on the “bells and whistles”.

LTCD: Where do your clients get most confused when choosing a Long Term Care Insurance Policy?

Scott Olson: The inflation benefit is always the most confusing. How is this policy going to grow? There are so many options and they can use similar language. Many people who look at long term care insurance get stuck here. It can be hard to not only compare inflation benefits from policy to policy but also to figure out which one you need or want.

Tomorrow we will discuss the Five Foundational Features that can be found in Scott’s book “Making Long Term Care Insurance Easier.” For more information on Scott or his book, please feel free to email our blog or visit Scott’s website at ltcinsuranceshopper.com.

The site has some good information on understanding, planning and paying for long term care.  They also have a planning kit that they can mail to you.  There is also a great page of related links that can help in your research.

A really good section is on the paying for the long term care.  They have a great section on private funding which includes long term care insurance, annuities, trusts, etc.  I didn’t see Reverse Mortgages listed which surprised me since 90% of Reverse Mortgages are government insured products.

Of all the websites I’ve seen, I believe that this is the best one I’ve seen to get people started in their own planning or in the planning for their family members.

The differences claimed by indemnity policy experts are: more control over your care, more control over your money, easier to use if your care is being handled by family.

There are also those who are not necessarily fans of the indemnity type policies.  Reasons cited for traditional long term care policies were many…the biggest being that this type of policy might not be smart the older you get.  An indemnity policy will pay out to the maximum benefit rather than actual costs of care, therefore your premiums can be higher.  Put well by Scott Olson of ltcinsuranceshopper.com and reader of our blog here at longtermcaredaily.com: “My concern with the cash indemnity policies can be their price.  When you include 100% home healthcare benefits and a 5% compound automatic inflation benefit, the cash indemnity policies can be, in some cases, twice as expensive as a traditional reimbursement policy.”

Since the biggest reason a consumer who knows about long term care insurance ends up not purchasing it is because it is so expensive, a more expensive alternative does not solve this problem.  In order to be transformational in the industry, we’ll need more than that.

Olson brought up another good point about traditional policies:  “It’s less expensive to get a traditional reimbursement policy with an ‘indemnity rider’ added onto it.  That usually only adds about 10% to 15% onto the cost of the policy.  Then, you can easily and affordably mix professional caregivers with informal caregivers.   Just my two cents.”

I think his help on this subject is worth a lot more than two cents!

If you go to their About page, it list a lot of things that they are hoping to be in 2008 such as a “neutral site…dedicated to comprehensively monitoring, analyzing, and redirect misinformation in the long-term care industry.”   But what it really looks like is a website to sell their “new idea” products of Cashbridging and Cash for Care.  I have to admit the website is nice and everything they are saying looks like a step forward in ways to pay for Long Term Care.  They are holding a conference call on May 14th, 2008.  Registration information can be found on their website www.cashltc.org.

Anyone know anything about these guys?  If not, I’ll check out the conference call and post something!

I love that the article starts out with “During their 50 years of marriage, Lee has managed the portfolio, paid the bills, and calculated the taxes. Jane has been more than happy to let him do so.”  This is an all too common occurrence that just sets women up for a dangerous fall in retirement.  Not knowing where the money is, not understanding all the insurance in place, not having the skills to manage the finances on your own could all lead to financial ruin and a disappointing retirement.

The recommendations to this couple were: “Consider buying long-term care insurance to provide a financial safety net in case one spouse falls ill.  Update the old wills and execute other important estate planning documents.  Identify specific adviser, family members, or friends who can fill key positions to help Jane with finances should Lee die or become disabled…”  Yes, yes, and yes.  I love the fact that long term care insurance is on the first of the list – right where it should be.  Without proper Long Term Care insurance in place, all the estate planning documents you have and all the advisors in place won’t be able to help you salvage what remains.

Finally some good advice…

The reason I’m posting on her today, though, is due to her stance on Long Term Care Insurance.  She believes that Long Term Care Insurance is an essential part of good financial health and really hit it hard during her presentation.  She threw up pictures of Christopher Reeves, Michael J. Fox, Annette Funicello and Ronald Reagan and talked about how each of these individuals could have benefited from Long Term Care Insurance.  She told the audience that the cost of needing long term care is NOT covered by Medicare or Medicare Supplemental.  It IS covered by Medicaid, but only in Medicaid Nursing Homes.

She said that even though it is expensive, she recommended that the audience look at purchasing policies in their 50s – while it is less expensive and while you are still healthy.  You can check out her past column on Long Term Care Insurance to get more information from her.