Research carried out on behalf of long-term care funding specialist Partnership revealed that 53 per cent of the 467 people quizzed said they would sell their homes to pay for care rather than fund the costs through a structured savings plan or annuity scheme on the back of professional advice.

Ben Heffer, insight analyst for Defaqto, said independent research from the firm found less than 20 per cent of financial advisers said they recommend insurance-based products when quizzed last year. He added:

“On the one hand people are not going to financial advisers for help with long-term care. On the other hand we know from our own research that many advisers do not even consider long-term care when advising their clients. The problem would be that people simply do not see funding long-term care as a priority. They know they should be saving a bit for retirement, they know they should have life assurance if they have a mortgage, but they probably expect the state to care for them when they are old and when it doesn’t they have to use their assets – usually the home. If advisers were more pro-active about long-term care, at least those people who have a financial adviser would get to hear about it and that would be a start.”

Read the rest at the link below

Long-term care still on the back burner

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

That includes 35 percent increases in July, September, December 2011 and March 2013. There’s a final 5 percent increase in June 2014. Compounded, the rate hikes amount to a 260 percent increase. Hulbert is among more than 6,600 policyholders in California and 140,000 nationwide affected by financial troubles at industry giant Conseco Inc. in Carmel, Ind.

Not everybody will be hit so hard; initial premium increases in California range from 20 percent to 35 percent, but a local hotline for seniors is getting bombarded by calls. Letters started appearing in local mailboxes in late April. Conseco has nine different forms in California. Some letters offer two options; some three. Policyholders can take the rate hikes as they come and keep the coverage they’ve always had. They can scale back benefits to get a lower premium, or they can take a one-time offer: a lump-sum, non-forfeiture benefit. This means the policy is considered paid up. The company will keep the money paid into the account, minus any claims paid or coming. Policyholders can file claims against the amount until it is exhausted, at which time the policy will end. One letter gives a 90-day limit for response. Another gives July 13 as the effective date for the change.

“They’ve sent out a letter that frightens seniors likely to need care,” said Margaret Reilly, program manager at HICAP Services of Northern California, a Medicare consulting organization. “One person describes it as a golden handshake: ‘They really want to get rid of us because we cost them a lot of money.’ ”

Long-term care rates jump, seniors worry

1.  Be proactive and talk (and listen) before an incident occurs.  Do it when as many family members can be there as possible.  A holiday, a birthday, another event when you can all sit down and find out each others wishes and make a list of things to do or research.   The Mayo Clinic has a small section on discussing long term care with loved ones.  It stresses active listening!

2.  Make a Plan.   The previous Mayo Clinic article has some insight into planning, but AGIS.com has a more detailed article that can help you out.   It stresses that the best plans include several elements (think Plan A and Plan B).
But what if an incident has occurred without prior discussions?  Disagreements can easily arise in this situation so some things to keep in mind are:

1.  Is there a spouse involved?  The discussion should start with her/him.  What are their needs and wants for the one in long term care?  How can the family support him/her?

2.  Can the family agree on someone to take the lead?  If you can all agree that one family member can be responsible, then release all the decisions to him/her.  This alleviates the entire family having to come together for each miniscule decision.

3.  Find an attorney who specializes in Long Term Care.  This can be really helpful because sometimes not all the family members understand the issues or the options and an attorney can be an unbiased, third party who can help family members focus on the issues at hand.

4.  Always remember that the relative in long term care should be first in every decision.  You want the best care for this individual without putting undue strain on the family!

Other reasons cited in the article were “physical abuse, choking on food, medication errors, neglect of basic care hygiene, and failure to provide assisted mobility”.

Click here for the full article from the Annals of Long-Term Care.

Senior Care and Information

Geriatric Care Management

All About Dementia

A full list of the health blogs available in the community can be found at:

http://blogs.healthcare.com/wp-list.php

LTCD:  In your book, you talk about the 5 Foundational Features of Long Term Care Insurance Policies. Could you tell us a little about each of these?

Scott Olson:  Sure. The first is "care settings": In which settings will the policy pay benefits for qualified care that you receive?  There are 3 main types of policies:  Home Healthcare Only, Facility Care Only, or Comprehensive (which is a combination of the two).  When looking at policies, make sure the care settings are what you want and that you are comparing apples to apples. .

The second Foundational Feature is the Daily Benefit.  How much will the policy pay for each day that you receive qualified care?  When comparing policies, make sure you understand how much of the Daily Benefit is available for each care setting.  Some policies may pay a smaller percentage of the Daily Benefit for care that is received at home or in an assisted living facility.

The third Foundational Feature is the inflation benefit.  This is the most confusing part of a LTCi policy.  There are 3 different ways to structure the inflation benefit:

1. No inflation benefit – the Daily Benefit never grows.  It remains the same for the life of the policy,
2. Future purchase option—you have a limited right to periodically increase your Daily Benefit.  When you choose to increase your Daily Benefit you do not have to prove that you’re still healthy. When you choose to increase your Daily Benefit, your premium will go up because you are buying additional coverage,
3. Automatic Inflation Benefit—your Daily Benefit automatically grows each year by a certain percentage which you choose when you purchase the policy.  The automatic increases in the Daily Benefit each year do not make the premium go up.  There are many different types of Automatic Inflation Benefit.  The most common are 5% Compound, 5% Simple and 3% Compound.  In my book I include a chart that compares how the different types of inflation benefit impact the Daily Benefit over a 30 year period.

Word of caution:  One of the biggest mistakes people make when comparing policies is comparing a policy with a Future Purchase Option with a policy that has an Automatic Inflation Benefit.  A policy that gives an "automatic option to increase" is not the same as a policy with an Automatic Inflation Benefit.

The fourth Foundational Feature is the Benefit Period.  How long is the policy designed to pay benefits while you qualify to receive benefits?  It is sometimes described in terms of dollars, sometimes in terms of years, and sometimes in terms of days.  It is similar to, and sometimes referred to as, the "Lifetime Maximum Benefit".   The most commonly offered Benefit Periods are 3 years,  5 years, or Lifetime/Unlimited.  A 3-year Benefit Period means that if you use up all your Daily Benefit each day, your policy would run out of benefits after you’ve been on claim for 3 years.  A Lifetime/Unlimited Benefit Period means that the policy could never run out of benefit. 

This is easy to understand but hard to decide because it requires some prognosticating. This can be very subjective.  One way that I try to make it more objective is by having my clients approximate their future net worth at retirement and choose a Benefit Period that will approximate that figure.  A policy with a starting Daily Benefit of $200 and an 8 year shared Benefit Period, would have a starting Lifetime Maximum Benefit of $584,000 ($200 x 365 x 8 = $584,000).  That Lifetime Maximum Benefit would grow each year according to the Inflation Benefit chosen.  If this couple chose a 5% Compound Automatic Inflation Benefit, then the $584,000 would grow every year by 5% compounded growth (e.g. the Lifetime Maximum Benefit would grow to $951,274 within 10 years.)

The fifth and last Foundational Feature is similar to a deductible, and is called the "Elimination Period".  It is the number of days that you receive qualified care before the policy will start to pay benefits.  As with any insurance, the higher the deductible, the lower your premium.  The most common Elimination Periods that are offered are 30, 60, or 90 days. 

To read more on the Five Foundational Features, check out Scott’s book by clicking here.

The guide is available for download at http://www.nrmla.org/digitalassets/Catalog.aspx.  It’s located on the bottom of the page under all their other audio downloads.  All the other downloads are Reverse Mortgage specific, but I think that this guide might be interesting to the readers of this blog since it gives a "comprehensive overview of the many Medicaid and the National Aging Services Network services" which are "available to seniors through federal and state government agencies".