Thinking about Buying Long-Term Care Insurance? Read this first.

confusion-005by Tobe Gerard, CLTC, MBA, MLS, LIA

There are many questions posed by prospective clients when they are first considering long-term care insurance (LTCi), but most begin with the disciplined questioning of the Socratic method: Who? What? When? Where? Why? How?

Who is buying? Couples and single women.

What are they buying? 50% of our clients buy traditional LTCi and 50% buy a hybrid policy that combines LTCi with life insurance. That is a huge shift from just five years ago when traditional LTCi made up 90% of our sales.
>Traditional LTCi Policies Current policies are less robust than years ago, typically they provide $4,500/month or $6,000/month, 3 or 4 year benefit period, 3% compound inflation. Couples almost always purchase the “shared” rider.
> Hybrid LTCi Policies Clients most often re-position $100,000 to fund a policy. The benefits range from $4,500 to over $6,000/month depending upon age, gender, and dollars contributed to fund the policy. The sweet spot appears to be policies that have a six year benefit period and 3% compound inflation.

When are they buying? Most people purchase LTCi in their fifties, but our clients range from 46 to 71.

Where are they buying? The states that have the most “insured lives” are CA, TX, NY, FL, IL, PA, OH, VA, NJ, WA, and MN.

Why are they buying? These are the top six reasons people purchase a LTCi policy.
#1 A desire to protect assets.
#2 A desire not to be a burden to family and other loved ones.
#3 A desire to have choices on where to receive care.
#4 A desire not to rely upon the government for their care.
#5 They have experienced using LTCi for a relative (parent, grandparent, spouse) and saw what a gift LTCi was to the family.
#6 They have experienced caring for a relative without LTCi and they saw how it drained the family’s resources financially and emotionally.

How are they buying? Many clients have been referred to us by their financial advisor, their attorney, or their accountant, although some people purchase policies through their employer; some buy through affinity groups such as college alumni associations or professional associations that offer members a discount; and others search online and buy a policy remotely from an insurance agent who sells by phone in multiple states.

Editor’s Note: For decades, the author has provided families with guidance about selecting long-term care insurance policies as well as how and when to trigger a claim. To help you become a more savvy consumer, we’ve asked Tobe to become an ongoing contributor to our blog.

Reprinted with permission from Tobe Gerard.

c 2016 Circle of Life Partners, LLC. All rights reserved.

BOOK REVIEW: Being Mortal by Atul Gawande

by Janet Simpson Benvenuti

Let’s talk about death, or better yet, dying. Our guide is Dr. Atul Gawande, brilliant surgeon and best-selling author, who weaves a compelling narrative that informs, enlightens and challenges clinicians and senior housing leaders to improve the way our institutions of care impact lives. Unlike his previous books The Checklist Manifesto: How to Get Things Right, Complications: A Surgeon’s Notes on an Imperfect Science, and Better: A Surgeon’s Notes on Performance, Gawande gets personal in Being Mortal: Medicine and What Matters in the End, with a perspective enriched by his father’s end-of-life journey. “We are not ageless,” Gawande writes, pushing readers past the denial that afflicts both the physician and the patient. Our goal, he continues, is “not a good death, but a good life to the end.”

The challenge, of course, is how to achieve that goal when only three percent of medical students receive training in geriatrics. While Gawande and his colleagues at Ariadne Labs focus on physician education, Being Mortal provides insights that readers can use with their own families.

My favorite tip was his description of ODTAA Syndrome, the signature way to tell when a patient or loved one is nearing the end of their lives. ODTAA Syndrome is when one experiences “One Damn Thing After Another,” a sure sign that the body is weakening and starting to fail. While the medical community uses clinical markers and checklists for stages of dying, this intentionally amusing name most clearly describes what families experience.

Long before ODTAA syndrome begins, older people with medical concerns face three housing choices: aging in a home setting with assistance, moving to an assisted living community, or moving into a skilled nursing home. While each option has benefits and challenges, Gawande describes resources worthy of consideration.

1. The Eden Alternative – As a new medical director of Chase Memorial Nursing Home, Dr. Bill Thomas found that residents were suffering from boredom, loneliness and helplessness. His solution? Admitting 100 winged and six four-legged residents. Gawande shares this hilarious story about the founding of the Eden Alternative; you may find nursing home communities that subscribe to their philosophy here.

2. Assisted Living Communities – As a caution to families, Gawande reminds us that today only 11 percent of assisted living communities “offer both privacy and sufficient services to allow frail people to remain in residence,” the original intent of Dr. Keren Brown Wilson, the founder of the first community for assistance in Portland, Oregon. One of the model organizations recorded by Gawande is Sanborn Place, led by friend Jacquie Carson who provides the kind of passionate advocacy and skilled care all elders deserve.

3. Palliative and Hospice Care – Perhaps the most useful guidance in Being Mortal were the examples of how patients, including his father, weighed treatment options during the last few years of their lives. Highlighting the importance of palliative consultations and hospice care, Gawande used his father’s fear of becoming a quadriplegic to demonstrate those often difficult conversations about care options, conversations that are the focus of the 5 Wishes, The Conversation Project, and the popular card game My Gift of Grace.

Here is an excerpt of the questions a physician trained in palliative care might ask.

1. What do you understand your prognosis to be?
2. What are your concerns about what lies ahead?
3. I need to understand how much you are willing to go through to stay alive.
4. What are your goals if your condition worsens?
5. If time becomes short, what is most important to you?

Unfortunately, until more physicians and health care providers are trained in palliative care, it remains for family members, especially those who are designated as health care agents, to clarify their loved one’s wishes. Being Mortal gives families insight into how to have those conversations. Buy a copy and use it to start the conversation with those you love.

HIGHLY RECOMMENDED. You may purchase a copy here.Being Mortal: Medicine and What Matters in the End

c 2014 Circle of Life Partners, LLC. All rights reserved.

Know Your Money: The True Cost of Long Term Care

Calculating the Cost of Care

Calculating the Cost of Care

by Janet Simpson Benvenuti

Recently I asked our financial advisor to do some retirement planning and estimate expenditures through the end of my life. To my surprise, my husband and I both are going to die at age 87 (for the record, I will predecease him), spending $100k/year in today’s dollars for each of the last three years of life. Amused, I wondered where I would find care for $100k in Massachusetts. The last assisted living facility with a memory unit I visited cost $8700/month without hairdressing or a personal care attendant. I’m sure to need both. And only three years of care? Prudently, one would plan for at least six, and with any history of longevity or cognitive impairment, I would plan for 12.

That same day, I spoke with a different financial advisor whose 91 year old client has Alzheimer’s disease. He and his spouse reside in Connecticut and spend a more typical $15,000 a month for assisted living with an aide for additional support, $180,000/year. When I reminded that advisor that home care for someone with Alzheimer’s disease is tax deductible as a medical expense, she expressed surprise, unaware of IRS Publication 502.

What’s going on here? Why are financial advisors so ill-informed about the true cost of care?

Quite simply, few people, including financial professionals, understand the extraordinary cost of long-term care and the options available to manage expenditures wisely in the last decade of life.  Effective financial planning requires more than just the skills to create an investment portfolio or project future expenses, but integrated knowledge about finance, elder law, insurance, health care and inexpensive community resources for aging in place. It’s why I founded Circle of Life Partners.

I’ve been guiding families through the aging journey for years, yet I still find the numbers shocking. Recently, I received a call from a family of three adult children who were growing concerned about their mother’s ability to care for their father safely at home. He was three years past his initial diagnosis of Alzheimer’s disease and the family felt he might be best served by moving into an assisted living facility with a memory unit although he did not have long-term care insurance. I calculated the price tag for nine years in a highly-regarded memory unit and subsequent skilled nursing care, $835,000- $1.25 million. Using an adult day health program or a part-time companion suddenly seemed a much more reasonable option.

Last week, I wrote about the Bipartisan Policy Center (BPC) launch of a new initiative on long-term care led by former Senate Majority Leaders Tom Daschle (D-SD) and Bill Frist (R-TN), former Congressional Budget Office Director Alice Rivlin, and former Wisconsin Governor and Secretary of Health and Human Services Tommy Thompson.  BPC’s Long-Term Care Initiative will propose a series of bipartisan policy options in late 2014 to improve the quality and efficacy of publicly and privately financed long-term support services. Read the white paper here to learn more and follow their work @BPC_Bipartisan.

Let’s hope they can get their arms around this issue. Until they do, I’ll continue guiding families to the resources they need, until I need the same support, at age 84.

©2014 Circle of Life Partners, LLC. All rights reserved.

Listen to Bipartisan Policy Center discuss Long-Term Care

Lonely adult child and parentby Jan Simpson Benvenuti

On Monday, April 7th at 1pm EST, the Bipartisan Policy Center in Washington, D.C. will host an event to discuss sustainable ways to finance and deliver long-term care services. The numbers are staggering. Today, there are 12 million seniors, veterans and disabled adults who need long-term care support and services; that number will jump to 27 million by 2050. As anyone who has cared for a loved one can attest, the time, energy and expense involved in supporting an ill family member can easily deplete a family’s resources, compromise the health of the family caregivers, and disrupt careers and relationships. Listen to the broadcast here.

 

© 2014 Circle of Life Partners, LLC. All rights reserved.