Long Term Care & Insurance

How much you’ll pay for long-term care insurance is based on three factors. Your age when you apply, how much protection you want and your health when you apply. Where you live today and where you plan to retire also play a part.

But here is information that’s most important for Los Angeles, CA residents. Your long-term care insurance can be far more reasonable than you think.

Let me share a few ways people I advise significantly reduce the cost of long-term care insurance. Before I share, I thought the following statistic from the American Association for Long-Term Care Insurance (http://www.aaltci.org) that was especially interesting. In 2008, individuals between the ages of 55 and 59 paid as little as $844-a-year for LTC insurance protection. The maximum paid by someone in this age range was $6,939.

So, how can one reduce the cost? Start by considering a policy that might protect a specific amount of your savings and assets. The coverage you buy today can increase in value over time. So, a policy that provides $115,000 of protection today can grow to $305,000 in 20 years. If you are married, some long-term care insurance policies allow one spouse to access the other spouse’s benefit pool. That’s an option well worth looking into.

Consider adding a deductible to your long-term care insurance policy. Most people have a deductible on their car insurance and their homeowner’s policy. When it comes to long-term care insurance, adding a deductible will significantly reduce the cost and the majority of people select a 90-to-100 day period. You’ll save as much as 20 percent yearly.

Finally, know that costs vary significantly from one long-term care insurance company to another. Members of the industry’s long-term care insurance association and they share enormous information. Once a year AALTCI undertakes a Price Index Study and the costs for almost identical coverage can vary by as much as 100 percent depending on your age and marital status.

If you’d like to learn more on long term care insurance please take a moment to call the Association at 818-597-3227 or E-mail us at mailto:info@aaltci.org. We will get you in touch with an area professional who can provide free information without any obligation. Thanks for reading our blog today we really appreciate it.

How To Reduce Long Term Care Insurance Premiums

The proposed federal health plan being discussed by the U.S. Senate includes proposed long-term care protection. The Community Living Assistance Services and Supports Act (CLASS Act) would provide coverage paid by individuals who would have the ability to opt out.The goal of the American Association for Long-Term Care Insurance, the industry’s professional organization, is to serve as an advocate for sound long-term care planning that ensures the future of all Americans — those who can afford private long-term care insurance, and those who can not.

That said, the proposed CLASS Act (Senator Kennedy’s new tax on Americans) is not the solution and a report released today by the American Academy of Actuaries reveals the plan’s significant flaws. The plan’s proponents believe a $65-per-month tax for individuals would be sufficient to provide a $50 average monthly benefit. The study reveals that the sound monthly premium level would be closer to $110 a month or over $1,300 a year per-individual.

The CLASS Act proposes a voluntary federal program that is sustainable and actuarially sound over a 75-year horizon. Based on the current assumptions, the independent actuaries project the new government fund established to pay long-term care claims will be insolvent by 2027. Sometime well before that date, taxpayers can expect the voluntary plan to become a new mandatory tax.

The report notes that part of the problem with the proposed plan is the increased likelihood of adverse selection. Simply stated, those individuals in poorer health will sign-up for the plan and those who are in better health will likely opt-out. Once claim payments begin after the five-year waiting period, one can expect an increasingly steady flow that will stretch the fund beyond what proponents expect.

The American Association for Long-Term Care Insurance is the independent trade organization providing information on long-term care planning to consumers and providing marketing and sales support to information. The organization maintains the industry’s most comprehensive website on long-term care planning which can be found at http://www.aaltci.org/

If you would like to receive a PDF copy of the American Academy of Actuaries letter to the U.S. Senate Committee on Health, Education, Labor and Pensions, please click here to send an E-mail to Jesse Slome, Executive Director.

Study Reveals Federal Long-Term Care Insurance Plan Flaws

When it comes to needing long-term care, the majority of Americans today receive care in their own home. “People mistakenly associate long-term care with nursing home care,” explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance.

“Today most long-term care takes place outside of a skilled care facility and the vast majority of long-term care insurance claims are not nursing home related.”According to studies conducted by the industry trade group, some 42 percent of long-term care insurance benefits paid are for care at home (AALTCI’s 2009 Long-Term Care Insurance Sourcebook). “Another 28 percent was for care in assisted living communities and only 30 percent was for care in skilled nursing facilities,” Slome notes.”

Home care services cover a wide range of needs, from memory care and companionship to meal preparation and medication reminders,” says Jennifer Tucker, Vice President with Homewatch CareGivers, a national provider of homecare services. “They may also include help with the activities of daily living, including home care services like bathing, dressing, and grooming or care coordination services rendered by a registered nurse.”

When selecting a home care agency, it is important to know what questions to ask. Here are five important questions that consumers should ask of a prospective service provider:

How long has the agency been providing private duty home care?

Is a written, customized care plan developed in consultation with the client and family members, and is the plan updated as changes occur?

How are emergencies handled after normal business hours?

Do they closely supervise the quality of care, including maintenance of a daily journal in the client’s home and non-scheduled supervisory visits?

Does the agency employ a nurse, social worker, or other qualified professional to make regular visits to the client’s home?

“A great way to find quality home care providers is to speak to a knowledgeable long-term care insurance professional,” states Jesse Slome. “If they’ve been in the business for a few years, they likely have clients who are receiving care.”

For additional information on home care for long-term care needs or to find local long-term care insurance professionals, visit the online Consumer Information Center from the American Association for Long-Term Care Insurance and request information from any of the organization’s 3,500 members nationwide.

Five Questions to Ask Before Hiring a Home Care Provider

The new long-term care insurance proposal that Democrats have included in a Senate health overhaul bill would produce about $58 billion in revenue for the government over the next 10 years, according to the Congressional Budget Office (CBO).

The $58 billion could be used to offset the cost of the national healthcare program. “Legislators must be salivating at a potential source of income with absolutely no potential for expenses for years to come,” explains Jesse Slome, executive director, of the American Association for Long-Term Care Insurance, the industry professional trade organization.

Monthly premiums paid by individuals would account for the $58 billion. Premiums would vary by age but are expected to average about $65 per month ($780 a year). Under the proposed program, no one would be eligible for benefits until they have paid premiums for five years – a reason the CBO estimates the program would net revenue for the government for its first 10 years.” The CBO generally does not estimate the cost of programs beyond 10 years, the period covered by procedural “pay-as-you-go” rules requiring legislation to be budget-neutral.

“When has a government entitlement program accurately estimated income and projected expenses,” Slome queries. “The CBO already estimates that premiums will be insufficient and will likely need to be increased to maintain the program’s solvency. The government already runs a disability insurance program through the Social Security Administration, but it is very difficult to qualify for that program and there is a backlog of people who have appealed Social Security’s initial decline of their benefits.”

According to the Association some 8.25 million Americans have already purchased long-term care insurance on an individual basis or through their employer. “Some 400,000 new policies are now sold each year,” as more people understand the need to plan for the risk of needing care. Millions of others will be able to use the built-up value of their homes through a reverse mortgage.

“Another underfunded entitlement program where the real cost won’t be known for 10 or more years simply shifts the financial obligation to the next generation,” Slome says. “That’s long-term care planning of the worst kind.”

Federal Long-Term Care Insurance Plan Is Short-Term Thinking

A new consumer guide to long-term care insurance protection has just been published by the American Association for Long-Term Care Insurance. The eight-page booklet specifically addresses the issues and options facing women.

New Consumer Guide Addresses Women’s Long-Term Care Planning Issues