The deficit-reduction proposal released Tuesday by the reconvened Gang of Six would repeal the Community Living Assistance Services and Supports Act (known as the CLASS Act).
Created as part of health reform legislation passed last year by Congress political experts refer to the CLASS Act as one of the late Sen. Ted Kennedy’s most cherished programs. It is also a favorite target of Republicans.
"America is facing a future long-term care crisis as the aging population balloons," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the insurance industry's national trade group. "CLASS has been highly controversial because on one hand it is at least some effort to address the problem though many see it as a very costly future new taxpayer-borne entitlement program."
The President-appointed fiscal commission led by former Senators Alan Simpson and Erskine Bowles singled the CLASS Act out as an “unsustainable” entitlement that would most likely saddle taxpayers with a major new liability, a finding that deficit hawks have latched on to in their attacks.
"Despite the fatal flaws of the CLASS Act, the Obama administration continues to push ahead in implementing this unsustainable entitlement program,” Sen. John Thune (R-S.D.) said in a statement last week. He added that the Department of Health and Human Services is ignoring “all of the red flags raised by the massive new entitlement program that is being created.”
CLASS establishes a voluntary long-term disability insurance program that would pay disabled enrollees a cash benefit for assistance with basic daily living activities such as dressing, bathing and eating. The insurance would be offered through the workplace, where employers who agree to participate would sign up their employees automatically — but also give them a chance to decline the coverage. If they keep the coverage, they’d be able to use the benefits after they’ve paid the premiums for five years.
CLASS Act critics including many leading industry actuaries with decades of experience in pricing and marketing long-term care insurance products argue that the voluntary CLASS program is vulnerable to adverse risk selection. "Critics expect that primarily health-challenged people will sign up for CLASS, those with expensive health problems which means CLASS would not be sustained by premiums alone," Slome explains. "Or, if they artifically price it too low in order to attract more healthy individuals, you face a serious shortfall when they ultimately go on claim."
Some of these problems were intended to be worked out before the Affordable Care Act was passed, but because of its unusual route to becoming law, that never happened experts acknowledge. "The nation definitely needs to discuss how to handle providing care for aging Americans," Slome concludes. "Kicking the can down the road isn't going to keep people from growing older and needing costly long-term care."
To learn more about the CLASS Act visit the American Association for Long-Term Care Insurance website at http://www.aaltci.org/class.
Hiển thị các bài đăng có nhãn long-term health care. Hiển thị tất cả bài đăng
Hiển thị các bài đăng có nhãn long-term health care. Hiển thị tất cả bài đăng
Thứ Năm, 21 tháng 7, 2011
Thứ Tư, 1 tháng 12, 2010
New Report Examines What Consumers Really Pay For Long-Term Care Insurance
One fourth (27.8%) of individuals purchasing long-term care insurance during the first half of 2010 who were under age 61 pay less than $1,000 a year according to a new report issued by the American Association for Long-Term Care Insurance (AALTCI).
"The single greatest misconception held by consumers is the actual cost of coverage," explains Jesse Slome, AALTCI's executive director. "Most people perceive the cost is actually quite a bit higher than the real amounts paid by large percentages of those purchasing coverage."
The Association reveals that nearly one-in-five (19.4%) purchasers under age 61 pay between $20 and $30 a week for new policies. Over one-fourth of buyers (28.9%) in this age band pay between $1,500 and $2,500 a year with the remainder paying more. Less than one-tenth of these buyers (6.8%) pay $4,000 or over.
"Studies that report average premium costs regrettably mislead the public into the perception that long-term care insurance is expensive," Slome explains. "Averages include large numbers of older buyers and other factors that result in higher costs. The fact is that many people pay far less than the average amounts released by industry sources."
Costs for long-term care insurance can vary significantly based on the age when one applies, the ability to take advantage of discounts offered to healthier applicants as well as the amount of future benefits desired.
Insurance rates are based on the attained age of the applicant. Older buyers pay more and according to the latest data of real buyers, less than a tenth (9.0%) of buyers between ages 61 and 75 paid $1,000 or less when they applied for new coverage.
According to the Association, the average age for new individual purchasers is now 57. Eight out of 10 (80.5%) of new individual buyers in 2009 were younger than age 65 when applying for long-term care insurance according to AALTCI's annual research of 155,000 new applicants. The pricing data is based on an analysis of over 200,000 purchasers of partnership qualified LTCi policies.
What Real People Pay Yearly
Buyers Under Age 61
Less than $999 27.8%
$1,000 - $1,500 19.4%
$1,500 - $2,500 28.9%
$2,500 - $4,000 17.1%
$4,000 and over 6.8%
Buyers Age 61 - 75
Less than $999 9.0%
$1,000 - $1,500 12.5%
$1,500 - $2,500 34.5%
$2,500 - $4,000 28.4%
$4,000 and over 15.6%
Source: American Association for Long-Term Care Insurance, November 2010, Price Study
"The single greatest misconception held by consumers is the actual cost of coverage," explains Jesse Slome, AALTCI's executive director. "Most people perceive the cost is actually quite a bit higher than the real amounts paid by large percentages of those purchasing coverage."
The Association reveals that nearly one-in-five (19.4%) purchasers under age 61 pay between $20 and $30 a week for new policies. Over one-fourth of buyers (28.9%) in this age band pay between $1,500 and $2,500 a year with the remainder paying more. Less than one-tenth of these buyers (6.8%) pay $4,000 or over.
"Studies that report average premium costs regrettably mislead the public into the perception that long-term care insurance is expensive," Slome explains. "Averages include large numbers of older buyers and other factors that result in higher costs. The fact is that many people pay far less than the average amounts released by industry sources."
Costs for long-term care insurance can vary significantly based on the age when one applies, the ability to take advantage of discounts offered to healthier applicants as well as the amount of future benefits desired.
Insurance rates are based on the attained age of the applicant. Older buyers pay more and according to the latest data of real buyers, less than a tenth (9.0%) of buyers between ages 61 and 75 paid $1,000 or less when they applied for new coverage.
According to the Association, the average age for new individual purchasers is now 57. Eight out of 10 (80.5%) of new individual buyers in 2009 were younger than age 65 when applying for long-term care insurance according to AALTCI's annual research of 155,000 new applicants. The pricing data is based on an analysis of over 200,000 purchasers of partnership qualified LTCi policies.
What Real People Pay Yearly
Buyers Under Age 61
Less than $999 27.8%
$1,000 - $1,500 19.4%
$1,500 - $2,500 28.9%
$2,500 - $4,000 17.1%
$4,000 and over 6.8%
Buyers Age 61 - 75
Less than $999 9.0%
$1,000 - $1,500 12.5%
$1,500 - $2,500 34.5%
$2,500 - $4,000 28.4%
$4,000 and over 15.6%
Source: American Association for Long-Term Care Insurance, November 2010, Price Study
Thứ Ba, 23 tháng 3, 2010
My Thoughts On CLASS - Next Steps
If you market and sell long-term care insurance, sooner (or later) you are going to hear the following words from a prospect; "I'm going to wait and check out the new federal long-term care plan."
It was inevitable that media coverage of health care reform would shift from "will the bill pass" to "what does the new law mean for you?" That shift is already taking place and the media watch each other and compete.
As a result, it is very likely that we will see continued and growing coverage of the fact that the health care law contains a new "federal government long-term care insurance plan". And, in a world of 15-second sound bites, that's about as much attention as it will be given ... and also all consumers need to hear to once again put any thoughts of planning on the back burner (the way baxck burner).
I will be writing more about CLASS and shortly will be creatintg material for members of the American Association for Long-Term Care Insurance to use to 1) educate themselves and 2) educate their clients and prospects. Undoubtedly, insurers will be doing likewise and we'll watch for such items and gladly share.
First, it is too early to predict how the CLASS Act will really impact either the individual or the employer-sponsored long-term care insurance markets. The three most important elements are undefined by Congress; (premium) cost to participants, benefit levels and requirements imposed on employers. These may not be available until well into 2011 or 2012 and then it will take time for implementation.
On the positive side, the CLASS Act should create enormous awareness among individuals of the real risk they face and the need to plan. If the plan is priced properly to take into consideration that it is guaranteed issue, then individual (traditional) policies will be able to compete based strictly on more benefits for less cost.
If, however, policies are insufficiently priced (too low to ultimately cover the potential claims risk) it will be more difficult to create differentiation between CLASS LTC insurance and private LTC insurance. Certainly those in positions of responsibility within the industry will work hard to achieve this (but it will not be an easy task).
Because there is a five year plan participation requirement, whatever benefits CLASS ultimately offers will really only have value for those who are currently age 55 or younger. As a result, a significant segment of Americans (those currently between 55 and 65) will fall through the donut hole and fail to have long-term care protection.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
It was inevitable that media coverage of health care reform would shift from "will the bill pass" to "what does the new law mean for you?" That shift is already taking place and the media watch each other and compete.
As a result, it is very likely that we will see continued and growing coverage of the fact that the health care law contains a new "federal government long-term care insurance plan". And, in a world of 15-second sound bites, that's about as much attention as it will be given ... and also all consumers need to hear to once again put any thoughts of planning on the back burner (the way baxck burner).
I will be writing more about CLASS and shortly will be creatintg material for members of the American Association for Long-Term Care Insurance to use to 1) educate themselves and 2) educate their clients and prospects. Undoubtedly, insurers will be doing likewise and we'll watch for such items and gladly share.
First, it is too early to predict how the CLASS Act will really impact either the individual or the employer-sponsored long-term care insurance markets. The three most important elements are undefined by Congress; (premium) cost to participants, benefit levels and requirements imposed on employers. These may not be available until well into 2011 or 2012 and then it will take time for implementation.
On the positive side, the CLASS Act should create enormous awareness among individuals of the real risk they face and the need to plan. If the plan is priced properly to take into consideration that it is guaranteed issue, then individual (traditional) policies will be able to compete based strictly on more benefits for less cost.
If, however, policies are insufficiently priced (too low to ultimately cover the potential claims risk) it will be more difficult to create differentiation between CLASS LTC insurance and private LTC insurance. Certainly those in positions of responsibility within the industry will work hard to achieve this (but it will not be an easy task).
Because there is a five year plan participation requirement, whatever benefits CLASS ultimately offers will really only have value for those who are currently age 55 or younger. As a result, a significant segment of Americans (those currently between 55 and 65) will fall through the donut hole and fail to have long-term care protection.
Jesse Slome
Executive Director
American Association for Long-Term Care Insurance
Thứ Ba, 1 tháng 12, 2009
Study Examines Long Term Home Health Care Utilization
December 1, 2009 - Some 7.5 million Americans currently receive long-term care at home because of an acute illness, long-term health condition, a permanent disability, or terminal illness according to a new report.
That compares to only 1.5 million in nursing homes and 1.1 million who reside in assisted-living communities according to the American Association for Long-Term Care Insurance which teamed up with Homewatch CareGivers to conduct a study examining trends in long-term health care and the utilization of associated support services.
"Most people incorrectly associate long-term health care with skilled nursing care in a facility when the vast majority of care takes place at home," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance. “It is clear that the people in today’s society prefer treatment for chronic conditions and issues related to aging in their own home rather than in a residential facility.”
One aspect of the study sought to compare individuals with long-term care insurance policies with those without insurance coverage. The findings indicated that individuals with long-term care insurance receive significantly more home care, and thus can stay in their homes longer. The study found that 70.6% of those covered by long-term care insurance received an average of between five and seven days of care each week, while only 35.1% of those without insurance received similar care as often.
"When possible, home is almost always the preferred setting for people who require care," says Leann Reynolds, president of Homewatch CareGivers. “This has been a clear and growing trend for more than a decade, as more and better home services have become available. The vast majority of people want to receive support care in their homes in order to maintain independence and quality of life for as long as possible.”
Possessing insurance to pay part or all of the cost of home care services enabled individuals to receive care at home for longer periods of time. The study found that 41.2% of those with insurance received care for longer than one year; compared to 29.7% of those without coverage.
"The study confirms what we've long suspected, that a basic long-term care insurance plan costing less than $1,000 a year may provide sufficient coverage for those who want care at home and still have the ability to transition to more costly skilled facilities should the need arise," adds Slome.
According to the Urban Institute, a nonprofit founded in 1968 that conducts research on social and economic issues to foster sound public policy, 21.3 percent of the frail older population receives paid home care services and it projects this will increase to 22.3 percent by 2030 and 25.5% by 2040.
"It is vitally important for individuals to recognize the increased likelihood of needing care at some point in their lives, and to plan for that inevitability," concludes Reynolds. “Having sufficient financial resources or the protection of long-term care insurance are the prime factors for all of us who want to stay in our homes and receive care for as long as possible.”
- - -
Founded in 1980, Homewatch CareGivers http://www.homewatchcaregivers.com/ is the largest, most experienced international provider of full-service home care for people of all ages, including seniors, children, veterans, the chronically ill, and those recovering from medical procedures. In-home care services are personalized for each client and customized care plans are administered through an international network of 111 owners with 181 territories. Founded in 1998, the American Association for Long-Term Care Insurance http://www.aaltci.org is the national trade organization established to educate Americans about the importance of long-term care planning. For more information visit the organization's Consumer Information Center or to access a free guide to reducing the cost of long-term care insurance click on this link: www.aaltci.org/free-guide/ .
That compares to only 1.5 million in nursing homes and 1.1 million who reside in assisted-living communities according to the American Association for Long-Term Care Insurance which teamed up with Homewatch CareGivers to conduct a study examining trends in long-term health care and the utilization of associated support services.
"Most people incorrectly associate long-term health care with skilled nursing care in a facility when the vast majority of care takes place at home," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance. “It is clear that the people in today’s society prefer treatment for chronic conditions and issues related to aging in their own home rather than in a residential facility.”
One aspect of the study sought to compare individuals with long-term care insurance policies with those without insurance coverage. The findings indicated that individuals with long-term care insurance receive significantly more home care, and thus can stay in their homes longer. The study found that 70.6% of those covered by long-term care insurance received an average of between five and seven days of care each week, while only 35.1% of those without insurance received similar care as often.
"When possible, home is almost always the preferred setting for people who require care," says Leann Reynolds, president of Homewatch CareGivers. “This has been a clear and growing trend for more than a decade, as more and better home services have become available. The vast majority of people want to receive support care in their homes in order to maintain independence and quality of life for as long as possible.”
Possessing insurance to pay part or all of the cost of home care services enabled individuals to receive care at home for longer periods of time. The study found that 41.2% of those with insurance received care for longer than one year; compared to 29.7% of those without coverage.
"The study confirms what we've long suspected, that a basic long-term care insurance plan costing less than $1,000 a year may provide sufficient coverage for those who want care at home and still have the ability to transition to more costly skilled facilities should the need arise," adds Slome.
According to the Urban Institute, a nonprofit founded in 1968 that conducts research on social and economic issues to foster sound public policy, 21.3 percent of the frail older population receives paid home care services and it projects this will increase to 22.3 percent by 2030 and 25.5% by 2040.
"It is vitally important for individuals to recognize the increased likelihood of needing care at some point in their lives, and to plan for that inevitability," concludes Reynolds. “Having sufficient financial resources or the protection of long-term care insurance are the prime factors for all of us who want to stay in our homes and receive care for as long as possible.”
- - -
Founded in 1980, Homewatch CareGivers http://www.homewatchcaregivers.com/ is the largest, most experienced international provider of full-service home care for people of all ages, including seniors, children, veterans, the chronically ill, and those recovering from medical procedures. In-home care services are personalized for each client and customized care plans are administered through an international network of 111 owners with 181 territories. Founded in 1998, the American Association for Long-Term Care Insurance http://www.aaltci.org is the national trade organization established to educate Americans about the importance of long-term care planning. For more information visit the organization's Consumer Information Center or to access a free guide to reducing the cost of long-term care insurance click on this link: www.aaltci.org/free-guide/ .
Thứ Ba, 29 tháng 9, 2009
Americans Fail Long Term Care Insurance Planning Quiz
When it comes to knowledge about long-term care insurance planning, Americans once again received a failing grade.
Long-term care poses the single largest risk to Americans living on retirement savings and income according to the American Association for Long-Term Care Insurance, the industry trade group. Yet, few consumers have the facts correct when it comes to understanding available planning options.
As the U.S. population ages, the percentage of people older than 65 will increase from about 13% in 2009 to 20% in 2040. Part of the projected increase is due to an increased life expectancy beyond age 65. After retirement health insurance and Medicare provide very little long-term care benefit, if any, according to financial planning professionals.
The results of a just-released national study of individuals between 40 and 70, most reported knowing what long-term care is and how much it costs. But their scores fall short when it comes to knowing what percentage of people will need long-term care and how they will pay for it. According to the study conducted by the MetLife Mature Market Institute, just about four in ten adults (36%) know that 60-to-70 percent of 65-year-olds will require long-term care services at some point in their lives. Just over one-third knew that most long-term care services are received at home.
While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.Few participants in the survey reported that they are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.
The survey also reported that eight in ten respondents (85%) understand that long-term care could have many causes, such as Alzheimer's disease, an accident or a chronic or disabling condition. More than four in ten (43%) are able to correctly identify the national average monthly cost for assisted living.
For more information on long-term care insurance, visit the Association's Consumer Information Center where you can read the organization's free guide on reducing the cost of long-term care insurance. Click here to read the guide.
Long-term care poses the single largest risk to Americans living on retirement savings and income according to the American Association for Long-Term Care Insurance, the industry trade group. Yet, few consumers have the facts correct when it comes to understanding available planning options.
As the U.S. population ages, the percentage of people older than 65 will increase from about 13% in 2009 to 20% in 2040. Part of the projected increase is due to an increased life expectancy beyond age 65. After retirement health insurance and Medicare provide very little long-term care benefit, if any, according to financial planning professionals.
The results of a just-released national study of individuals between 40 and 70, most reported knowing what long-term care is and how much it costs. But their scores fall short when it comes to knowing what percentage of people will need long-term care and how they will pay for it. According to the study conducted by the MetLife Mature Market Institute, just about four in ten adults (36%) know that 60-to-70 percent of 65-year-olds will require long-term care services at some point in their lives. Just over one-third knew that most long-term care services are received at home.
While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.Few participants in the survey reported that they are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.
The survey also reported that eight in ten respondents (85%) understand that long-term care could have many causes, such as Alzheimer's disease, an accident or a chronic or disabling condition. More than four in ten (43%) are able to correctly identify the national average monthly cost for assisted living.
For more information on long-term care insurance, visit the Association's Consumer Information Center where you can read the organization's free guide on reducing the cost of long-term care insurance. Click here to read the guide.
Thứ Bảy, 29 tháng 8, 2009
More Low-Cost Long-Term Care Insurance Sold
More than half of Americans purchasing long-term care insurance paid less than $20 a week according to a new report by the American Association for Long-Term Care Insurance, the industry trade group.
According to an analysis of over 100,000 policies sold during the first half of 2009, the majority of individuals age 61 and younger paid under $1,000 a year for protection (less than $20 a week). Just over half (51.3%) of long-term care insurance policies sold to individuals in Partnership states cost under $1,000 a year. Nearly one in five cost less than $500 a year.
"Most people mistakenly believe long-term care insurance is expensive," states Jesse Slome, executive director of the organization. "The cost depends on how much coverage you buy, your age and health when you apply." Less than 10 percent of purchasers spent more than $100 a month for new policies purchased.The majority of those purchasing Partnership long-term care insurance policies were between ages 46 and 60.
The Partnership is a program authorized by Congress that makes available long-term care insurance protection from leading insurers. Partnership-approved policies provide special features and asset spend-down protections. Some 30 states now have long-term care Partnership programs in place.
Nearly half (48.2%) of buyers purchasing Partnership long-term care insurance policies in the first half of 2009 were between the ages of 46 and 60. Some 31 percent were over age 60 and nearly 20 percent were age 45 or younger.
According to an analysis of over 100,000 policies sold during the first half of 2009, the majority of individuals age 61 and younger paid under $1,000 a year for protection (less than $20 a week). Just over half (51.3%) of long-term care insurance policies sold to individuals in Partnership states cost under $1,000 a year. Nearly one in five cost less than $500 a year.
"Most people mistakenly believe long-term care insurance is expensive," states Jesse Slome, executive director of the organization. "The cost depends on how much coverage you buy, your age and health when you apply." Less than 10 percent of purchasers spent more than $100 a month for new policies purchased.The majority of those purchasing Partnership long-term care insurance policies were between ages 46 and 60.
The Partnership is a program authorized by Congress that makes available long-term care insurance protection from leading insurers. Partnership-approved policies provide special features and asset spend-down protections. Some 30 states now have long-term care Partnership programs in place.
Nearly half (48.2%) of buyers purchasing Partnership long-term care insurance policies in the first half of 2009 were between the ages of 46 and 60. Some 31 percent were over age 60 and nearly 20 percent were age 45 or younger.
Thứ Tư, 8 tháng 7, 2009
Colorado Governor Praised For New Long-Term Care Awareness Campaign
The American Association for Long-Term Care Insurance commended Colorado Governor Bill Ritter, Jr. who announced a new campaign encouraging Coloradans to start planning now for their future long-term care needs. The State of Colorado has partnered with the U.S. Department of Health and Human Services to help Coloradans with the long-term care planning process through the Own Your Future campaign.
"We praise this visionary leader for promoting the importance of long-term care planning," stated Jesse Slome, the Association's Executive Director. "Over 100,000 Colorado residents already own long-term car insurance, " Slome notes, "and the new outreach effort will help educate many more people about this important issue." Nationwide, some 8.25 million Americans own long-term care insurance.
"Coloradans are living longer healthier lives due to advancements in science, medicine and health education," said Governor Bill Ritter. "There is nothing more important than taking care of your health, and as your Governor, there is nothing more important to me than ensuring strong, healthy futures for all Coloradans. Over the past two years, we've taken a number of steps to ensure health care is more affordable and accessible for all residents of our state and emphasizing the importance of long-term care planning is a critical part of that effort."
The Own Your Future campaign is led by The Colorado Partnership for Long-Term Care. The Partnership is a public/private arrangement between long-term care insurers, Colorado's Medicaid program, the Division of Insurance, the Department of Human Services and the citizens of Colorado. It enables Colorado residents who purchase Long-Term Care Partnership insurance to have more of their assets protected if they later need the state Medicaid program to help pay for their long-term care. Through the Partnership, Coloradans have greater control over how they finance their long-term care.
As part of the program Coloradans between the ages of ages 45 to 65 will receive a letter from Governor Bill Ritter, Jr. about the Own Your Future campaign. The letters will include information about how to order a free planning kit as a first step to managing future long-term care needs. The planning kits are a great tool to help Coloradans make smart, safe decisions about long-term care.
Coloradans seeking more information on long-term care insurance can visit the online Consumer Information Center from the American Association for Long-Term Care Insurance
"We praise this visionary leader for promoting the importance of long-term care planning," stated Jesse Slome, the Association's Executive Director. "Over 100,000 Colorado residents already own long-term car insurance, " Slome notes, "and the new outreach effort will help educate many more people about this important issue." Nationwide, some 8.25 million Americans own long-term care insurance.
"Coloradans are living longer healthier lives due to advancements in science, medicine and health education," said Governor Bill Ritter. "There is nothing more important than taking care of your health, and as your Governor, there is nothing more important to me than ensuring strong, healthy futures for all Coloradans. Over the past two years, we've taken a number of steps to ensure health care is more affordable and accessible for all residents of our state and emphasizing the importance of long-term care planning is a critical part of that effort."
The Own Your Future campaign is led by The Colorado Partnership for Long-Term Care. The Partnership is a public/private arrangement between long-term care insurers, Colorado's Medicaid program, the Division of Insurance, the Department of Human Services and the citizens of Colorado. It enables Colorado residents who purchase Long-Term Care Partnership insurance to have more of their assets protected if they later need the state Medicaid program to help pay for their long-term care. Through the Partnership, Coloradans have greater control over how they finance their long-term care.
As part of the program Coloradans between the ages of ages 45 to 65 will receive a letter from Governor Bill Ritter, Jr. about the Own Your Future campaign. The letters will include information about how to order a free planning kit as a first step to managing future long-term care needs. The planning kits are a great tool to help Coloradans make smart, safe decisions about long-term care.
Coloradans seeking more information on long-term care insurance can visit the online Consumer Information Center from the American Association for Long-Term Care Insurance
Thứ Ba, 7 tháng 7, 2009
2009 Long-Term Care Insurance Price Index Announced
A 55-year-old individual considering long-term care insurance protection can expect to pay $723-per-year for a base level of protection if they are married or $1,060 if they are single according to the 2009 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance.
Across various age groups, costs for coverage increased about two percent from the prior year. The index published annually measures costs for top-selling long-term care insurance policies that offer consumers approximately $115,000 in current benefits, with protection increasing yearly as the individual ages.
"A solid base plan of protection will grow in value to over $305,000 of protection 20 years from now," explains Jesse Slome, Executive Director of the national trade organization that conducted the research. The study compares costs for different levels of plans that provide long-term care benefits for 3-years or longer with a compound inflation option that increases the available insurance benefits by five percent compounded each year.
"For some age bands the cost of long-term care insurance actually declined," Slome notes. "What we did see is a far wider range of prices between insurers offering basically the same coverage." According to the Association study, costs can vary by as much as 100 percent. "This could reflect different benefits or simply the individual insurer's pricing assumptions," Slome explains. "Consumers should compare policies or work with a knowledgeable insurance professional who can analyze for them."
Lower Interest Rates Impact Costs For Insurance Policies
The cost for long-term care insurance is closely related to interest rates that have significantly declined in recent years. "Investment income comprises between 40 and 60 percent of the dollars used to pay eventual long-term care claims," Slome explains. "Premiums paid by policyholders make up the other portion and as interest rates have declined, insurers have found it necessary to raise premiums for protection." The industry paid out $5.8 billion in claims in 2008 to some 180,000 policyholders.
"The cost of long-term care insurance is directly related to how much protection you purchase, the age you first apply and your health at the time of application," explains Slome. "Over half of all individual applicants are between ages 55 and 64, and one third purchase a daily benefit of between $100 and $149." The daily benefit amount actually equals either a cash benefit or a pool of money that the policyholder can access. Most insurers offer significant discounts when both spouses apply for coverage.
The survey compared costs for individuals age 55 with those age 65. "A married individual purchasing $172,000 in current protection will pay about $20 a week ($1,084-per-year) by qualifying for available good health discounts," Slome explains. "By waiting until they are age 65, they'll likely pay $63-a-week because they will need to buy more coverage to keep pace with inflation and will likely no longer qualify for the good health savings."
Thứ Tư, 7 tháng 1, 2009
Long Term Care Insurance Cost: What People Really Pay
How much did Americans pay for long-term care insurance in 2008? What the average age of buyers? At what ages did long-term care insurance policyholders begin their claims?
Each year the American Association for Long-Term Care Insurance publishes an annual industry Sourcebook that is packed with the best facts and figures we can obtain. Some comes from independent research conducted by the Association, others from studies. Here are some findings that will be included.
Let me begin with a stated opinion. I dislike industry averages. Reporters like them and they use them regularly. But, without context, averages are meaningless. If I told you you couldn't control the temperature of the water in your shower, but that the average would be a balmy 80 degrees ... how would you feel if one minute it was 100 and the next it was 60. You get the picture.
The very same is true when it comes to long-term care insurance. For years, articles and experts talk about the average amount people pay for long-term care insurance. But, half of those who buy pay less than the average (they didn't get inferior protection) ... and half paid more (they didn't get ripped off). Okay, for those addicted to statistics, the average paid for individual long-term care insurance in 2008 will likely be about $1,900. Hope you are happy.
But for those who really want a more relevant perspective, new data that is reported in the Association's 2009 LTC Insurance Sourcebook, sheds more meaningful light. The data breaks down the range of premiums paid into age bands, showing the high and the low amount paid, as well as the mean.
Here are the findings for select age bands (2008 annual premiums paid by buyers in New York State):
Between ages 45-49 the low was $1,008 and the high was $6,445
Between ages 50-54 the low was $989 and the high was $6,407
Between ages 55-59 the low was $844 and the high was $6,939
between ages 60-64 the low was $1,125 and the high was $7,413
Between ages 65-69 the low was $1,883 and the high was $9,496
All information published in the Sourcebook or on this blog may be utilized with credit to the American Association for Long-Term Care Insurance.
Each year the American Association for Long-Term Care Insurance publishes an annual industry Sourcebook that is packed with the best facts and figures we can obtain. Some comes from independent research conducted by the Association, others from studies. Here are some findings that will be included.
Let me begin with a stated opinion. I dislike industry averages. Reporters like them and they use them regularly. But, without context, averages are meaningless. If I told you you couldn't control the temperature of the water in your shower, but that the average would be a balmy 80 degrees ... how would you feel if one minute it was 100 and the next it was 60. You get the picture.
The very same is true when it comes to long-term care insurance. For years, articles and experts talk about the average amount people pay for long-term care insurance. But, half of those who buy pay less than the average (they didn't get inferior protection) ... and half paid more (they didn't get ripped off). Okay, for those addicted to statistics, the average paid for individual long-term care insurance in 2008 will likely be about $1,900. Hope you are happy.
But for those who really want a more relevant perspective, new data that is reported in the Association's 2009 LTC Insurance Sourcebook, sheds more meaningful light. The data breaks down the range of premiums paid into age bands, showing the high and the low amount paid, as well as the mean.
Here are the findings for select age bands (2008 annual premiums paid by buyers in New York State):
Between ages 45-49 the low was $1,008 and the high was $6,445
Between ages 50-54 the low was $989 and the high was $6,407
Between ages 55-59 the low was $844 and the high was $6,939
between ages 60-64 the low was $1,125 and the high was $7,413
Between ages 65-69 the low was $1,883 and the high was $9,496
All information published in the Sourcebook or on this blog may be utilized with credit to the American Association for Long-Term Care Insurance.
Thứ Ba, 23 tháng 12, 2008
Comment on Congressional Budget Office Long-Term Care Proposals
Received several notes from people regarding the information posted from the Congressional Budget Office's report on Long-Term Care proposals.
I thought I would share comments (below) from one leading expert whom I respect as one of the more knowledgable LTCi industry pros. On a personal note, I completely concur that the proposals will cost taxpayers and will do nothing to keep Medicaid solvent to meet the future needs of consumers. The American Association for Long-Term Care Insurance is not chartered as a lobbying entity but we'll do our best to keep everyone apprised and if the time comes to raise our voices ... we will. My goal for this blog is to be information (not an ongoing rant) ... but I'm personally glad to see some folks have signed-up. You can post comments to the blog.
Let's keep building ... we have some wonderfully bright and passionate minds (on our side!)
Jesse Slome
One Expert Comments to the CBO Proposals for Long-Term Care
"I won't go into the problems the Medicaid suggestions raise: How does a minimally trained case worker in a county get info about expenditures made 7 years ago from anyone much less from a cognitively impaired 85 year old! But the LTC insurance piece does concern me. I'm surprised you were not more critical of the CBO report proposal.
As I look at it, it would severely impact LTCi sales opportunities and harm the public.
1. Even where a person made $100K over 40 years, a savings account of 1.2% of income would only accumulate about $53K. Scarcely adequate to buy LTCi for a 65 year old 40 yrs from now. If the client had used the 1.2% right along to pay premiums rather than put money into the Treasury account it would work, but not the way this concept is set up.
2. Second, I couldn't find anything in the report about treasury bills. Nothing in the report that says any interest would be paid which makes affordability of decent LTCi at 65 even more unlikely.
3. Why buy LTCi at all until 65 when the windfall occurs. We've fought the "Medicare covers LTC" myth for years. This would be a million times worse especially since the feds will be touting the plan. Windfall is also an appropriate word. The concept implies a single premium. There is no other way to explain the report's provision that allows funds remaining after the "best" policy is purchased to go back to the accountholder (after taxes). If the CBO authors had envisioned annual premiums, this would never come up because remaining funds would be premised on death or LTC eligibility .
4. The report says insurers would have huge opportunities to sell new products. I agree, but not the products we do today nor products that actually help our clients. CBO optimism is premised on the idea that the cost of LTCi is driven primarily by negative selection. Not so. If everyone had to buy coverage, the cost of policies would go down (maybe 15%), but not enough to make even modestly adequate coverage affordable under this plan. So, at age 65, people would find that unless they were willing to kick in a lot, their promised coverage would be next to nothing. As to insurers, our sales outside the 65 mandated group would be even less than they are today.
On the bright side, we'd have the opportunity to sell new products that matched the limited account funds. On the downside, those products are likely to be standardized (whatever that means to the CBO) products (like Medigap) but dominated by NTQ minimal indemnity coverage akin the old hospital indemnity policies."
I thought I would share comments (below) from one leading expert whom I respect as one of the more knowledgable LTCi industry pros. On a personal note, I completely concur that the proposals will cost taxpayers and will do nothing to keep Medicaid solvent to meet the future needs of consumers. The American Association for Long-Term Care Insurance is not chartered as a lobbying entity but we'll do our best to keep everyone apprised and if the time comes to raise our voices ... we will. My goal for this blog is to be information (not an ongoing rant) ... but I'm personally glad to see some folks have signed-up. You can post comments to the blog.
Let's keep building ... we have some wonderfully bright and passionate minds (on our side!)
Jesse Slome
One Expert Comments to the CBO Proposals for Long-Term Care
"I won't go into the problems the Medicaid suggestions raise: How does a minimally trained case worker in a county get info about expenditures made 7 years ago from anyone much less from a cognitively impaired 85 year old! But the LTC insurance piece does concern me. I'm surprised you were not more critical of the CBO report proposal.
As I look at it, it would severely impact LTCi sales opportunities and harm the public.
1. Even where a person made $100K over 40 years, a savings account of 1.2% of income would only accumulate about $53K. Scarcely adequate to buy LTCi for a 65 year old 40 yrs from now. If the client had used the 1.2% right along to pay premiums rather than put money into the Treasury account it would work, but not the way this concept is set up.
2. Second, I couldn't find anything in the report about treasury bills. Nothing in the report that says any interest would be paid which makes affordability of decent LTCi at 65 even more unlikely.
3. Why buy LTCi at all until 65 when the windfall occurs. We've fought the "Medicare covers LTC" myth for years. This would be a million times worse especially since the feds will be touting the plan. Windfall is also an appropriate word. The concept implies a single premium. There is no other way to explain the report's provision that allows funds remaining after the "best" policy is purchased to go back to the accountholder (after taxes). If the CBO authors had envisioned annual premiums, this would never come up because remaining funds would be premised on death or LTC eligibility .
4. The report says insurers would have huge opportunities to sell new products. I agree, but not the products we do today nor products that actually help our clients. CBO optimism is premised on the idea that the cost of LTCi is driven primarily by negative selection. Not so. If everyone had to buy coverage, the cost of policies would go down (maybe 15%), but not enough to make even modestly adequate coverage affordable under this plan. So, at age 65, people would find that unless they were willing to kick in a lot, their promised coverage would be next to nothing. As to insurers, our sales outside the 65 mandated group would be even less than they are today.
On the bright side, we'd have the opportunity to sell new products that matched the limited account funds. On the downside, those products are likely to be standardized (whatever that means to the CBO) products (like Medigap) but dominated by NTQ minimal indemnity coverage akin the old hospital indemnity policies."
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