Time Is Wasting Away

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Indications are the Genworth will have product available for purchase within 60 days.  What is still unclear is:  Will Genworth have a CA Partnership policy for sell?  My guess (and hope) is they will.  However there needs to be progress in amending the Partnership regulations.

Since the CA Partnership is to attract and maintain LTC insurance  carriers they need to offer a product that is competitive.  Improvements to the Partnership is as simple as:

1. Allowing 3% compound inflation and other types of automatic inflation protection.
2. Having preciosity with other Partnership States.  (Asset Protection & Estate Recovery Credit)
3. Reducing the Minimum requirement for daily benefit from 70% of average cost of Nursing Home Care to 50%.

This, along with CA enforcing SB 483 to reduce Medi Cal planning and bring the state into compliance with Deficit Reduction Act of 2005. Then Genworth and other companies would consider redirecting their marketing efforts to Ca Partnership LTCi.

Desperately needed is leadership and cooperation between the DOI and Dept of Health.  Their mandate is to regulate Long Term Care insurance and make it a viable alternative to Medi Cal Planning.  LTCi should be affordable to the public.  Time is wasting away... the public is getting older and losing their ability to buy protection because of health concerns.

Certain is the fact that our dollars will buy less coverage.  This can be partly compensated by product design.  Tax Credits, above the line tax deductions permitting LTCi in group Cafeteria plans are other ideas CA can legislate in promoting  Long-Term Care Planning.

LTCi Update and/or Comment: Full-Gale Warning

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Storm clouds are on the horizon for Long-Term Care Insurance.  This year Guardian, Prudential and MetLife left the market.  Unum eliminated their Small Group LTCi program.  John Hancock came back into California, however, at a greatly increased premium.

Much of the turmoil is due to the Federal Reserve keeping low yields on the bonds portfolio’s making it difficult to maintain reserves sufficient to cover liabilities that increase by 5% annually.   This compounded by the fact that insured’s do not voluntarily lapsed their coverage at the previously anticipated 6% rate.  Most carriers are seeing less than a 1.5% lapse rate.  (You buy LTCi - You keep LTCi)

Genworth, the largest underwriter of LTCi, is not immune to the fiscal crisis.  They have cut agent’s commissions by 15%, are eliminating unlimited benefits and limited pay options.  In some states Genworth has reduced couples discount from 40 to 20% and eliminated preferred rating discounts.

Now there is talk of charging separate rates for men and for women who buy individual LTCi coverage instead of charging one blended unisex rate.  This will mean higher prices for women. Why?  Women tend to live longer, spend more time receiving long-term care services, and, if they are married, tend to be more likely than men to end up needing formal LTC services, not being able to depend on a spouse to provide the care.

LTCi will survive.  For now, baton down the hatches, set your sea anchor or find a safe harbor and prepare to ride out the storm. 

Conclusion: 

Don't wait for the policies to get better or less expensive, or for others to provide for you.  If it is affordable buy it.  You'll never be younger and probably not healthier than you are today.   

Proposed Legislation: Medicaid Long-Term Care Reform Act of 2012

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Is this the beginning  of  meaningful legislation promoting pre-planning for long-term care.

H.R.6300 
Latest Title: Medicaid Long-Term Care Reform Act of 2012 
Sponsor: Rep Boustany, Charles W., Jr. [LA-7] (introduced 8/2/2012)      Cosponsors (4) 
Latest Major Action: 8/6/2012 Referred to House subcommittee. Status: Referred to the Subcommittee on Health.

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Bold Added by Charles Schug
SUMMARY AS OF: 
8/2/2012--Introduced.

Medicaid Long-Term Care Reform Act of 2012 - Expresses the sense of Congress that: (1) Congress should repeal the Community Living Assistance Services and Supports Act (CLASS Act); (2) federal and state governments should work to reduce the number of middle-income individuals who will rely on Medicaid to finance their long-term care (LTC) needs; and (3) the Secretary of Health and Human Services (HHS) should comply with the annual reporting requirements under the Deficit Reduction Act of 2005 relating to LTC insurance partnerships, and promote discussion about the consequences that families and states might encounter if nothing is done to change the trajectory of projected state and federal spending on LTC services under title XIX (Medicaid) of the Social Security Act (SSA).

Directs the Secretary to provide to states: (1) technical assistance on the implementation and administration of qualified state LTC insurance partnerships, and (2) information on best practices for such partnerships to reduce future state and federal expenditures on LTC services under Medicaid.

Directs the Secretary to: (1) provide technical assistance to states on requirements related to the mandate to seek recoveries from estates, and (2) hold an annual event to assist states in evaluating methods of implementing such requirements and exchanging best practices information on them.

Amends the Deficit Reduction Act of 2005 to direct the Secretary, acting through the National Clearing House for Long-Term Care, to establish a public-private initiative to coordinate among the Clearinghouse, state governments, and relevant nongovernmental entities for: (1) increasing the number of targeted middle-income individuals who receive consumer education with respect to long-term care under Medicaid and SSA title XVIII (Medicare), (2) enhancing the quality of information that targeted consumers receive, and (3) improving the accessibility of such information for consumers who seek it.

Expands Clearinghouse duties to include educating consumers with respect to the availability and limitations of Medicare coverage for long-term care.

Directs the Secretary to: (1) evaluate methods to expand LTC insurance coverage for middle-income individuals through the State Long-Term Care Partnership Program for improving their retirement security and LTC options; (2) solicit and evaluate ideas from stakeholders on policy options to reduce such expenditures; and (3) study the effectiveness of certain federal laws relating to treatment of assets for purposes of determining eligibility for Medicaid long-term care, estate recovery under Medicaid, the look-back period for transfers of assets for purposes of Medicaid eligibility, and the disqualification of individuals with substantial home equity for LTC assistance under Medicaid.

Directs the Director of the Congressional Budget Office (CBO) to report to Congress on: (1) the projection of the number of middle-income people who will rely on Medicaid to finance their LTC needs, (2) an estimate of the cost of reliance on Medicaid to state and federal governments, (3) an estimate of the change in the cost that would result from certain policy options such as reduction in the home equity exemption, and (4) the estimate of the change in the cost estimate that would result if each such policy option were adopted and funding for LTC services under Medicaid is provided to states through a block grant.

Comment:
Are not these studies and assistance  already being done? 
 What should be legislated is: A. above the line deduction for all who purchase LTCi without the 7.1% of adjusted Gross income medical expense requirement.  B. Allowing LTCi to be purchased through a section 125 "Cafeteria plan" with employees  pre-taxed income. C. Providing a TAX Credit for the purchase of LTCi. D. Continue closing the loopholes used by "Medicaid planners" that allows the shifting and shielding of wealthy individuals to qualify for  Medi-Cal (Medicaid).    E.  Educating the Public to the need and cost of long-term care.   The lack of public assistance to the meddle class.  How the purchasing of LTCi when healthy and young can protect your lifetime savings. 

LTCi 202: Filial Responsibility

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In California as well in about 30 other states there currently are laws making adult children responsible for their parents if their parents can't afford to take care of themselves.  California's Family Code (Sec. 4400) states "Except as otherwise provided by law and adult child shall to the extent of his or her ability, support a parent who is in need and unable to maintain himself or herself by work."

Although California is not currently enforcing this code.   With the passage of the Deficit Reduction Act. and California's eventual implementation it, (SB 483) children could soon be found responsible for the parents well being legally as well as morally.  Read More

This concern should be discussed further with an  Estate Planning  or Elder law attorney.  Two solutions are:

Life Insurance: You may purchase life insurance for your parents.  You would be the owner of the
of the policy and after your parent's death, the proceeds could be used to pay final long-term care bills.

Long-Term Care Insurance: If your parents who qualify, but can not afford , long-term care insurance, you may buy the coverage for them, it could help reduce or eliminate the cost of their care.

LTC 101: Analysis of Long Term Care Insurance

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My father loved the game of golf.  I learned from his  tutelage, of the game, that if you over think the complexities of your swing you will "duff" the shot.   Deciding on long term care is similar.  Analysis of all the solution one can get loosed in the details. Afraid of making a mistake. Decide to do nothing.   

There are many variables that determine the pricing of LTCi.  I will discuss many of these features in detail in other postings.   

 Of the many factors that effect the availability and price of LTCi.  the most important is ones health."Money Just Pays for Long-Term Care Insurance - Health buys it!".  Age is the next factor.  Companies use ones actual age. Premiums increase after age 50 by 6 to 9% a year.  All LTCi policies are "Guaranteed Renewable" which means the company can never cancel your coverage as long as premiums are paid.  They can, however, increase the premium by class with state approval.

When I was young and first married I asked my fathers " When is the best time to buy a house?"  "When you can afford it." he replied.    Same is true with LTCi.  You will never be younger and probably not healthier than you are today.  Susie Orman an advocate for LTCi now advises "before the age of 58".

Schug The LTC Guy

LTC 101: CARE MANAGEMENT (under construction)

The most important feature provided in a Long-Term Care Policy is Care Management.  A professional usually a Registered Nurse or sometimes a Social Worker.  One who assists the family in the planning and implementation of the patients care.  

Even if one does not have a policy it is so important the family seeks counseling from a professional.   

The Care Manager becomes the Coach to help the family manage the maze of services and facilities.  The help develop and implement a plan.  Counseling the family the best way to keep the patient as safe and independent as possible.  

Schug The LTC Guy

LTC Legal: Durable Power of Attorney & Medical Directive

Disclaimer: " I am not an attorney.  Any legal advice that I share, check with an attorney.  I am not responsible for anything I say".  Words like this I say in all my Long-Term Care CE classes.

Two vital documents are necessary in order for a loved one (family member or friend) to properly take care and act on your wishes they are : Durable Power of Attorney and a Medical Directive.  Both are legal documents that allows a person of your choice to make the Financial/legal and Medical decisions if/when due to accident, illness or cognitive impairment you are not competent to decide.  They may be included in a Will, or Living Trust.

A marriage license is not a valid document for this purpose.  Insurance companies and financial planners are bound by privacy laws so therefore cannot discuss or execute with any other party without a durable power of attorney.   Medical practitioners will continue to provide care unless you have executed and appointed a person, of your choice, to make these decisions.         

A doctor wrote a one line letter "...this patient is not mentally competent to make her own financial decisions"     Allowing my wife to take over her mothers finances and preserve what was left of her financial investments.

Later my mother in law was certified for Hospice Care.  Because of the Medical Directive she was allowed  to remain at our house and die with dignity with family at her bedside.  

LTC 101 Care Continuum / How Benefits Trigger

Generally long-term care refers to a wide range of of personal care and other services provided over an extended period of time (90 days) to people who need help with basic activities of daily living (ADL's) or who need supervision due to severe cognitive impairment.  This can occur due to aging (frailty),disease, or accident.

How Benefits Are Triggered

In 1996 Federal  Government passed the "Health Insurance Portability and Accountability Act" (HIPAA) that set the standards on how benefits would be triggered  for all Long-Term Care Insurance.  Either the need for "substantial assistance" in at least two of six ADL's (Bathing, Dressing, Transferring, Toileting, Continence and Eating). Or due to "severe" cognitive impairment needing "substantial supervision". 

• Substantial assistance meaning either in the form of "hands on assistance" or "standby assistance". 
• Severe cognitive impairment means a loss of intellectual capacity to the point that one is endangering himself or those around him
• Standards are certified by a licensed health care practitioner and meet the 90 day requirement.

Home Care
Traditionally Home Care begins at home with the support of family and friends.  With a plan of care provided by a "Care Manager" LTCi can provide reimbursement for the cost of.

• Personal Assistance provided by a  "Care Giver"
• Bathing, Dressing, Transferring
• Respite Care
• Homemaker Services
• Shopping/Driving
• Money Management
• Meal Preparation
• Medication Management
• Light Housework
• Home Health Care provided by a licensed medical  practitioner
• Hospice Care for the Terminally ill (Note: Long Term Care Insurance will coordinate with Medicare) 
• Adult Day Care provided in the community

Facility Care 

Home care is practical only for those with limited need for assistance - one that does not involve extensive medical treatment or continuous care or observation. Facility care is at times more appropriate in serving the patients needs. There are two types of  Care Facilities: Residential Care (RCF) and Skilled Nursing Facility (SNF) or Nursing Home. 

Assisted Living provides for a social environment with 24-hour supervision and assistance to residence who have minor medical problems and may or may not need help with bathing, dressing and transferring.  Some Assisted Living facilities provide safe secured areas for those who with mild to moderate cognitive impairment.   These communities offer private, semi-private or small apartments.  They typically provide social activities and a central dinning room.  They typically charge a monthly fee with additional services added depending  the level of care required.  

Board and Care facilities are converted single family homes providing assistance for up to six residents.  They provide “hands on care” with a more home-like atmosphere.  Some facilities off secure supervision and may also provide recreational and social activites.

Skilled Nuring Facility also referred to as nursing home, conversant hospitals or vocational rehab facility provide for 24 hour nursing services.  Many SNF’s off sub-acute care and specialized medical programs like: respiratory therapy services,ventilator care, tracheotomy care , IV services and Hospice.  Sage 3 -4 Alzeihmer’s  or dementia facilities are also licensed as SNF’s.

Summary: RCF’s provide a Social environment and can assist in providing three ADL’s  (Dressing, Bathing and Transferring).  SNF’s provide a Medical environment for patients who require medical assistance on a daily basis.

 SchugTheLTCGuy.com

LTC 101 Defining Long-Term Care

I will attempt to clear up the confusion about Long-Term Care insurance.  Having been involved with not only product sales but the education of  insurance Agents since 1994, my perspective is unique.

Long-Term Care is needed when due to: accident, illness, frailty or loss of cognitive ability creates the need of human assistance to remain  independent.   This care can be provided at home, in the community or in a facility.  Long Term Care insurance (LTCi) provides the funds to pay for care.  This is a very personal subject,which involves the family and  making choices that will determine the quality, affordability and availability of care.

Although thought to be  a senior insurance product,  care can be required at any age.  Long Term Care insurance must be obtained  before you require assistance.  My first lesson was: " Money just pays for it.  Health buys it."

Golf taught me that "over analysis lead to paralysis".   There are numerous options to help  fund your long-term care needs: saving, life insurance. annuities, depending on spouse and/or children, reverse mortgage or just do nothing and pray.  With so many choices do not fail to plan.  
7/19/12 SchugTheLTCGuy.com