500,000 Long-Term Care Insurance Applicants Expected

Over half a million Americans are expected to apply for long-term care insurance before the year concludes according to a projection from an industry trade group.

This marks significant continued growth in awareness and action among consumers explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance http://www.aaltci.org. "In 2010 the Association reported that 475,000 Americans obtained long-term care insurance coverage either on an individual basis or through their employer an increase over the prior year."

According to the projection, interest and sales continue to trend up which can be attributed to several factors. "Consumers in their 50s and young 60s are more aware than ever of the risks involved in living into their 80s and 90s," Slome explains. "The millions of pre-retirees understand that government programs will not be sufficient to deal with the burgeoning number of aging baby boomers and that new federal programs will be more suited to those with existing health limitations."

The Association director notes that significant growth in sales will result from the thousands of federal employees signing up for coverage through the Federal Long-Term Care Insurance Program (FLTCIP) where open enrollment closes June 24. "I would expect tens of thousands of newly covered individuals in the program with an equal number who searched and compared coverage on an individual basis," Slome adds.

Over eight million Americans currently have long-term care insurance protection and roughly 200,000 received benefits from their coverage in 2010 according to the 2011 Long-Term Care Insurance Sourcebook. The majority (56 percent) of individual applicants are between the ages of 55 and 64. "People increasingly understand the need to look into this protection prior to retirement age," Slome concludes. "That is when costs are more affordable and you are still most likely able to health qualify for coverage."

CLASS Act Information Worth Reading

We have just posted a current and comprehensive explanation of the CLASS Act with questions and answers online and it is well worth reading. The link is below.

President Obama has signed into law comprehensive healthcare reform legislation that contains a program known as the Community Living Assistance Services and Supporters Act (CLASS Act).

If you are an insurance agent, you will be getting more questions from current clients and certainly from prospects.

If you have questions that are not answered, feel free to send me an e-mail and we will look forward to addressing them.

Click on this link: or type, copy and paste this web address into your browser. http://www.aaltci.org/class/

Calorie Intake Linked To Longevity And Cancer Development

Cutting consumption of glucose, the most common dietary sugar, can extend the life of healthy human cells and speed the death of precancerous cells, reducing cancer's spread and growth rate.

According to findings reported by researchers from the University of Alabama at Birmingham, reducing calorie-intake can benefit longevity and help prevent diseases like cancer that have been linked to aging.

The researchers conducted tests by growing both healthy human-lung cells and precancerous human-lung cells in laboratory flasks. The flasks were provided either normal levels of glucose or significantly reduced amounts of the sugar compound, and the cells then were allowed to grow for a period of weeks. Restricted glucose levels led the healthy cells to grow longer than is typical and caused the precancerous cells to die off in large numbers.

Every year some 1.4 million Americans are diagnosed with cancer. It ranks as one of the leading factors for the need for costly long-term care according to the American Association for Long-Term Care Insurance among aging seniors.

Two key genes were affected in the cellular response to decreased glucose consumption. The first gene, telomerase, encodes an important enzyme that allows cells to divide indefinitely. The second gene, p16, encodes a well known anti-cancer protein.

Healthy cells saw their telomerase rise and p16 decrease, which would explain the boost in healthy cell growth, the researchers explained. The research into the links between calorie intake, aging and the onset of diseases related to aging is thought to be a first of its kind given that it used the unique approach of testing human cells versus laboratory animals.

The study has been published in the online edition of The Journal of the Federation of American Societies for Experimental Biology. The research was funded by a grant from the National Institutes of Health.

People Who Look Young For Their Age Tend To Live Longer

People who look young for their age enjoy a longer life than those who look older than their years.

According to researchers, doctors frequently use perceived age as a general indication of a patient's health. They note however, that there is little research upon which to base validity of the belief.

Researchers at the University of Southern Denmark, examined whether perceived age is linked with survival. They investigated important age related traits, such as physical and mental (cognitive) functioning and a molecular biomarker of aging (leukocyte telomere length).

Telomere length indicates the ability of the body's cells to reproduce. Shorter length is associated with a host of diseases related to aging, lifestyle factors and death.

A total of 1,826 Danish twins aged 70 years and over underwent physical and cognitive tests in the spring of 2001. Their faces were also photographed. Assessors rated the perceived age of the twins from their facial photographs. The assessors did not know the age range of the twins. In addition, each twin of a pair had their age assessed on different days.

Following the assessments, death records were used to track the survival of the twins over a seven year period. Perceived age was significantly associated with longer life survival. This was true even after adjusting for chronological age, sex, and the environment in which each pair of twins grew up. Perceived age, adjusted for chronological age and sex, also correlated with physical and cognitive functioning as well as leukocyte telomere length.

Also, the bigger the difference in perceived age within a twin pair, the more likely it was that the older looking twin died first. The age, sex and professional background of the assessors had no relevance to any of the results.

The researchers concluded that perceived age based on facial photographs is a strong biomarker of ageing. It predicts survival among people aged 70 years and over and correlates with important functional and molecular age related characteristics.

Report gathered by the American Association for Long-Term Care Insurance.

Long-Term Care Awareness Month Television Appearance

Ron Goldner, Financial Planner with Wealth Strategies Group, Inc. in Memphis, Tennessee capitalized on Long-Term Care Awareness Month by arranging three local television appearances. You can view his appearance on the local Fox-station's newscast.

At the end of the interview, Ron offers copies of the Association's Guide For Women and has already fielded a number of calls. Offering a brochure is a great way to get the station to include your phone number. Way to go Ron.

If you send me examples of media placements you have secured, we'll gladly share them with others.



Posted by Jesse Slome
American Association for Long-Term Care Insurance
http://www.aaltci.org

Increased Tax Deduction Limits For Long-Term Care Insurance

The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2010. "For the first time, the maximum deductible limit for an individual exceeds $4,000," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance , the national trade organization.

"The federal government and an increasing number of states are sending a clear signal that individuals need to plan for long-term care and tax deductibility and tax credits certainly make long-term care insurance more attractive to millions," Slome adds. "It is a positive sign to see limits for long-term care insurance deductibility increase especially when pension contribution limits for 2010 were not increased."

The end of the year provides a double tax-saving incentive for consumers. There is still time to take advantage of tax deductions in 2009 and also benefit from the increased deductible limits next year.

The 2010 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110

A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: Click here for 2010 tax deductible limits.

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.

What Do Consumers Pay For Long-Term Care Insurance

The Partnership program provides enormous benefit for consumers. It also provides significant benefit to insurance professionals.

One of the most important benefits is the gathering of relevant information. The following is preliminary information gathered from the Partnership States. While the numbers may change, it sheds an important light on the subject of what people pay for long-term care insurance protection. It clearly shows that the majority of consumers are spending far less for long-term care insurance protection than what's reported in the consumer media.

The following data is based on over 70,000 individuals (under age 61) purchasing Partnership long-term care insurance policies between January 1, 2009 and June 30, 2009.

Premium Amount Percentage
Less than $500 18.1%
$500 - $999 33.2%
$1,000 - $1,499 11.1%
$1,500 - $1,999 10.2%
$2,000 - $2,499 7.6%
$2,500 - $2,999 6.0%
$3,000 - $3,499 4.7%
$3,500 - $3,999 3.3%
$4,000 and Over 5.3%

Why are these numbers so important?

Because, here is the number a highly respected organization reports to the media: "The average individual buyer in the first three months of 2009 is paying $2,129 during the first year of coverage." (June 8, 2009)

If consumers perceive $2,129 is the cost (that's $4,258 for a couple) they are going to believe that long-term care insurance is EXPENSIVE. And, they are not going to buy.

BUT 72.6% PAID LESS THAN $2,000. And more than half paid LESS THAN $1,000.

It is very hard to overcome perceptions. Let's hope facts will help. Certainly the American Association for Long-Term Care Insurance and our members are doing all they can to properly educate consumers and other professionals.

Jesse Slome
Executive Director
American Association for Long-Term Care Insurance

Nursing Home Studies Reveal Benefit of Long Term Care Insurance

While less than a third of benefits from U.S. long-term care insurance companies pays for nursing home care, most Americans still associate policies with a costly nursing home stay according to the American Association for Long-Term Care Insurance. Two studies now look at the benefits of this increasingly popular protection.

A report published in the organization's annual Sourcebook revealed that nine percent of nursing home residents would have delayed going to a nursing home for necessary care in the absence of a nursing home policy. Some 13 percent reported they would have used a less costly provider in the absence of having long-term care insurance.

A new report issued this week has found that non-profit nursing homes provide better care than for-profit facilities. According to Canadian researchers, a review of 82 studies conducted starting in 1965 reported that 40 studies found that non-profit nursing homes provided significantly better quality care, while three studies concluded that for-profit homes delivered better care. The remaining studies had mixed results. Most of the studies were conducted in Canada and the United States.

Non-profit homes did better in four important quality measures: more or higher quality staffing; lower rates of pressure ulcers; less use of physical restraints; and fewer deficiencies cited by regulatory agencies. Based on their findings, the researchers calculated that if all nursing homes were non-profit, nursing home residents in the United States would receive 500,000 more hours of nursing care per day, while those in Canada would receive 42,000 more hours of nursing care per day.

The findings of the second study which were published online in the British Medical Journal suggest a trend toward higher quality care in non-profit nursing homes than in for-profit homes, said the researchers.

Last year American long-term care insurance companies paid some $8.5 billion in benefits to some 180,000 individuals. Some of the largest claims, typically for care in skilled nursing home facilities, exceed $1 million according to the industry organization. Long-term care insurance provides individuals with the ability to choose where care is provided, notes one industry expert. Choice and control are great benefits.

Posted On E-Max health by Jesse Slome from the American Association for Long Term Care Insurance

New Study Examines Long-Term Care Insurance Claims

The largest open long-term care insurance claim has surpassed $1.2 million in paid benefits, according to a just-released report from the American Association for Long-Term Care Insurance. The claimant, a woman, purchased coverage at age 43, paying an annual premium of $1,800. Three years later her claim began and has continued for almost 12 years. [Note: Payment of policy premiums ceases when an individual is receiving policy benefits.]

"As a result of increased longevity and medical advances, the need for long-term care is a new phenomenon for a generation of Americans," said Jesse Slome, Executive Director of the industry trade group. "The pervasive concern about purchasing long-term care insurance is will I ever use it?"

According to Association data 180,000 Americans received benefits from their long-term care insurance policy and some $8.5 billion in claims was paid in 2008. "This is a significant increase in benefits paid compared to the prior year," Slome explains. "Long-term care insurance is not the lottery. This is not something you really want to win; but having protection in place can certainly pay off and for thousands of people it increasingly is."

The organization collected data on claims including the largest open claims (still being paid as of December 31, 2008) paid by six of the nation's leading insurers. The second largest claim is by a woman who purchased her long-term care insurance policy at age 72, paying an annual premium of $12,766. Three years later her claim began and has continued for almost nine years ($1.02 million in benefits has already been paid for her nursing home care).

The largest claim being paid to a man exceeds $690,000. The individual purchased long-term care insurance protection through his employer at age 54, paying an annual premium of $2,560. The coverage was designed to pay benefits for five years. Two years later his claim began and has continued for almost seven years.

Nearly one in 10 (8.9%) of new individual claims initiated during 2008 prior to age 70 the study revealed. "While most long-term care insurance claims begin at older ages, typically in ones late 70s or 80s, accidents and illnesses are a common reason younger people need this care," Slome notes. The Association's study revealed that 30.5% of claims start between ages 70 and 79; some 60.6% after age 80. "Almost two-thirds of claimants receiving benefits (65%) are women," Slome reports, "and the largest percentage of benefit payments (42.0%) are for care in ones own home versus a nursing home (30.5%)."

The five most common reasons for a long-term care insurance claim, according to the Association, are Alzheimer's Disease, stroke, arthritis, circulatory issues or injury. "One in eight persons age 65 and over has Alzheimer's," Slome says. "The number of new cases is expected to increase to 450,000 a year by 2010 and to 615,000 new cases a year by 2030. It’s time for individuals to start planning for care should they need it in the future." The study shows that planning can certainly pay off.

The six largest claims will be published in the upcoming summer issue of LTCi Sales Strategies magazine which is sent to all Association members.

Readers of this blog: Let me know if you'd like to see more information on long-term care insurance claims.

IRS Rules Assisted Living Meals And Lodging Costs May Be Tax Deductible

A private letter from the Internal Revenue Service explains that meals and lodging costs for assisted living may be deducted as medical expenses if the individual is in the facility for qualifying medical reasons. The letter explains the types of conditions that would meet the standards in order to qualify these costs as tax deductible.

For insurance agents and brokers, this is good information to save and share with accountants and tax professionals who may be working with family members with a parent (or parents) residing in an assisted living community.

Here is a copy of the IRS letter dated December 18, 2008

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

Number: INFO 2009-0010
Release Date: 1/2/2008
UIL: 213.00-00
CONEX-149526-08

The Honorable Edward Markey
Member, U.S. House of Representatives
5 High Street, Suite 101
Medford, MA 02155
------------------------------
Dear Congressman Markey:

This letter responds to your inquiry dated December 10, 2008, on behalf of your
constituent (name withheld) who asked about the deductibility of expenses paid
to care for her mother, who is in an assisted care program because she suffers from
Alzheimer’s disease.

As a general rule, taxpayers may not deduct personal, family, or living expenses
(section 262(a) of the Internal Revenue Code (the Code)). However, an exception
allows taxpayers to deduct expenses that they pay for medical care of the taxpayer, the
taxpayer’s spouse, or the taxpayer’s dependent, subject to certain limitations, if the
expenses are not covered by insurance (section 213(a) of the Code). For purposes of
this deduction, medical care expenses include amounts paid for the treatment or
mitigation of a mental illness and amounts paid for qualified long-term care services
(section 213(d)(1) of the Code).

Qualified long-term care services are certain services that a chronically ill individual
requires, and that a licensed health care practitioner prescribes under a plan of care
(section 7702B(c)(1) of the Code). An individual is chronically ill if the individual meets
one of two “triggers.” The first trigger is the inability to perform at least two daily living
activities without substantial assistance from another individual for at least 90 days.
Daily living activities include eating, toileting, transferring, bathing, dressing, and
continence (section 7702B(c)(2)(B) of the Code). The second trigger is a severe
cognitive impairment that requires substantial supervision to protect the individual from
threats to health and safety (section 7702B(c)(2)(A) of the Code).

What level of assistance with daily living activities is required to meet the first of the two triggers—the inability to perform at least two daily living activities without substantial assistance from another individual. In Notice 97-31, 1997-1 C.B. 417, we define “substantial assistance” as either “hands-on assistance” or “standby assistance.”

Hands-on assistance means the physical assistance of another person without which
the individual could not perform the activity. Standby assistance means the presence of
another person within arm’s reach of the individual that is necessary to prevent, by
physical intervention, injury to the individual while the individual is performing the activity
(such as being ready to catch the individual if the individual falls while getting into or out
of the bathtub or shower as part of bathing, or being ready to remove food from the
individual’s throat if the individual chokes while eating).

Notice 97-31 also provides guidance about the second trigger—a severe cognitive
impairment that requires substantial supervision to protect the individual from threats to
health and safety. The notice defines a “severe cognitive impairment” as a loss or
deterioration in intellectual capacity that is comparable to (and includes) Alzheimer’s
disease and similar forms of irreversible dementia, and is measured by clinical evidence
and standardized tests that reliably measure impairment in the individual’s:
Short-term or long-term memory,
Orientation as to people, places or time, and
Deductive or abstract reasoning.

“Substantial supervision” means continual supervision (which may include cuing by
verbal prompting, gestures, or other demonstrations) by another person that is
necessary to protect the severely cognitively impaired individual from threats to his or
her health or safety (such as may result from wandering).

The individual also asked whether meals provided with long-term care services are deductible
medical care expenses. If an individual is in a hospital or another institution because of
a mental illness, the meals and lodging furnished as a necessary incident to medical
care are considered medical care expenses (section 1.213-1(e)(1)(v) of the Income Tax
Regulations (the regulations)). This regulation applies to individuals who must be in the
facility because of a mental illness that makes it unsafe for them to be left alone (section
1.213-1(e)(1)(v)(a) of the regulations).

However, if the principal reason for being in the facility is based on personal or family considerations, rather than the need for medical care, the cost of the meals and lodging is not a medical care expense. Only the cost of the medical care itself would be deductible (section 1.213-1(e)(1)(v)(b) of the regulations). Thus, expenses for meals and lodging that are non-deductible personal expenses at the onset of a mental illness may be deductible medical expenses after the
illness has progressed. For example, expenses for meals and lodging at a minimal-care
assisted living facility are non-deductible personal expenses. However, expenses for
meals and lodging in a constant-care nursing home may be deductible medical care
expenses if the meals and lodging are furnished as a necessary incident to medical
care.

Sincerely,
Kimberly L. Koch
Senior Technician Reviewer, Branch 2
(Income Tax & Accounting)

For more information on long-term care insurance, please visit the Website of the American Association for Long-Term Care Insurance.

Reserach Reveals Consumers Purchasing More Affordable Long-Term care Insurance

Some 400,000 individuals purchased long-term care insurance protection in 2008 according to a just-released report. The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and three-fourths (76%) selected a more affordable approach to this protection by opting for coverage for a specific number of years.

The annual study conducted by the American Association for Long-Term Care Insurance, the industry's professional trade organization, analyzed data on 215,000 buyers of individual long-term care insurance protection. According to the organization's research, some 8.2 million Americans now have long-term care insurance protection purchased on an individual basis (typically through an insurance professional) or through a plan offered by their employer.

"Individuals continue to purchase protection at younger ages," explains Jesse Slome, the Association's Executive Director. In 2008, some 53% of individual buyers were between ages 55 and 64; compared to 50% the prior year. Another 24% were between ages 45 and 54 (2008). "The age of buyers keeps dropping as consumers -- especially baby boomers -- understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable," Slome explains. In 2000, the average age of an individual buying long-term care insurance was 67.

The number of individuals purchasing long-term care insurance protection for a specified number of years also increased according to the Association study. Just over three-fourths (76%) of buyers in 2008 opted for coverage for a claim lasting five years or less; a slight increase over the prior year (71%). "The most expensive long-term care insurance policy is one with an unlimited benefit period (one with no cap on the number of years benefits will be received)," Slome explains. "Consumers are right-sizing their protection taking into account available savings and retirement income. This cost-sharing approach can reduce the cost of protection by 30 percent or more."

Perhaps in recognition of cost-consciousness, consumers were fairly evenly spread in terms of the level of selected daily benefit. Just under one-third (31.5%) opted for a daily benefit between $100 and $149. "In current dollars, that amounts to between $36,500 and $54,385 in a yearly benefit," Slome notes. "But most policies offer an option so benefits keep pace with rising costs and 15 years from now, the value of the (higher) benefit would be $75,800 a year."

The complete findings of the study are published in the 2009 LTCi Sourcebook available from the American Association for Long-Term Care Insurance. For additional information, call the Association's offices at (818) 597-3227 or visit the organization's website: http://www.aaltci.org/.

Summarized Study Data

Age of Buyers (2008)

Under 45 7%
45 to 54 24%
55 to 64 53%
65 and Over 16%

Daily Benefit (2008)
Less than $100 6.5%
$100 to $149 31.5%
$150 to $199 35.0%
$200 and Over 27.0%

Benefit Period (2008)
2 Years 7%
3 Years 30%
5 Years 24%
Unlimited 13%

Premium Paid (2008)
Age Low High Average
35 - 44 $637 $2,830 $1,650
45 - 54 $1008 $6,440 $1,900
55 - 64 $844 $7,400 $2,150
65+ $1,883 N/A $3,350

Additional information can be found in the Association's Consumer Information Center.

Long Term Care Insurance Videos - Featured Claims Stories

Five videos discussing the importance of purchasing long-term care insurance have been posted by the American Association for Long-Term Care Insurance on the new YouTube page established by the organization.

The first video features a three-minute television appearance by Jesse Slome, the Association's executive director. Slome recently appeared on the noon news in St. Louis, MO to discuss key facts consumers need to know about long-term care planning and insurance protection options.

Two additional videos feature Association members Harry Crosby and Fred Frauhiger who appeared on their local television news shows during 2008's Long Term Care Awareness Month. Both experts share relevant information for consumers.

The final two videos feature interviews with real claimaints who were featured in the 2008 Long-Term Care Insurance industry advertisement that appeared in the December 2008 edition of Kiplinger's personal Finance magazine. The ad was supported by eleven leading long-term care insurers. Click here to link to the page where the ad can be viewed.

All five videos can be viewed online. Click on this link or paste the following text into your web browser's address box: http://www.youtube.com/LongTermCareInfo . The Association plans to add additional long-term care insurance claims stories throughout 2009.