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
Showing posts with label LTC insurance. Show all posts
Showing posts with label LTC insurance. Show all posts
Wednesday, December 1, 2010
Friday, October 2, 2009
Pennsylvania Insurance Department Petitions to Place Penn Treaty Into Liquidation
October 2, 2009. The Pennsylvania Insurance Department today filed petitions that seek orders of liquidation for Penn Treaty Network America Insurance Company and its subsidiary, American Network Insurance Company. The petitions are subject to the approval of Commonwealth Court.
"We have been on-site analyzing the organizations' assets, liabilities, reserves and surpluses since we began our rehabilitation action in January," Insurance Commissioner Joel Ario said. "Our comprehensive, independent evaluation has determined that the companies do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states. In the current circumstances, those rate increases simply would not be fair to policyholders.
"We have instead petitioned for an orderly liquidation of all company assets in which policyholders' claim payments are our number one priority. Additionally, active long-term care policies will not be canceled, except by the policyholder, so they will be transitioned to the states' guaranty funds once an order takes effect. Guaranty funds have the right to assess other insurance companies to cover policyholder claims up to coverage limits that vary by state."
Penn Treaty Network America, headquartered in Allentown, and its subsidiary, American Network, provide long-term care insurance to more than 120,000 policyholders.
Together, the companies offered long-term care insurance in all 50 states and the District of Columbia. Policyholders and other interested parties will receive further information about the liquidation when the court enters an order. In the interim, policyholders with questions on claims or non-claim matters may call, toll-free, 1-800-362-0700, ext. 3270.
Posted by Jesse Slome
American Association for Long-Term Care Insurance
"We have been on-site analyzing the organizations' assets, liabilities, reserves and surpluses since we began our rehabilitation action in January," Insurance Commissioner Joel Ario said. "Our comprehensive, independent evaluation has determined that the companies do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states. In the current circumstances, those rate increases simply would not be fair to policyholders.
"We have instead petitioned for an orderly liquidation of all company assets in which policyholders' claim payments are our number one priority. Additionally, active long-term care policies will not be canceled, except by the policyholder, so they will be transitioned to the states' guaranty funds once an order takes effect. Guaranty funds have the right to assess other insurance companies to cover policyholder claims up to coverage limits that vary by state."
Penn Treaty Network America, headquartered in Allentown, and its subsidiary, American Network, provide long-term care insurance to more than 120,000 policyholders.
Together, the companies offered long-term care insurance in all 50 states and the District of Columbia. Policyholders and other interested parties will receive further information about the liquidation when the court enters an order. In the interim, policyholders with questions on claims or non-claim matters may call, toll-free, 1-800-362-0700, ext. 3270.
Posted by Jesse Slome
American Association for Long-Term Care Insurance
Tuesday, July 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."
Monday, April 6, 2009
Women And Long-Term Care Insurance
Some quick facts about women and long-term care.
All statistics show that women live longer than men. Women who reach age 65 have a life expectency of (another) 20 years versus 17 years for men.
Women over age 75 are far less likely to be married (than men) and are twice as likely to be living alone.
Women over age 65 include 980,000 nursing home residents; versus 337,000 men.
Women are also typically the caregivers. Women provide between 60% and 75% of family or informal care.
These facts come from the Association's 2009 Long-Term Care Insurance Sourcebook and they will be an important part of the upcoming guide the Association will publish specifically for women.
But, facts support the issue and I am hoping readers of this blog will share their insights with me as I prepare the booklet. What have you found resonates with women - both those who are living alone ... as well as those who are married? My intent is to address both of these audiences with messages they will relate to.
What should be included in this brochure?
Please share your thoughts by sending me an E-mail to Jesse Slome.
Thanks. I can't think of a more important topic.
Jesse Slome
mailto:jslome@aaltci.org
All statistics show that women live longer than men. Women who reach age 65 have a life expectency of (another) 20 years versus 17 years for men.
Women over age 75 are far less likely to be married (than men) and are twice as likely to be living alone.
Women over age 65 include 980,000 nursing home residents; versus 337,000 men.
Women are also typically the caregivers. Women provide between 60% and 75% of family or informal care.
These facts come from the Association's 2009 Long-Term Care Insurance Sourcebook and they will be an important part of the upcoming guide the Association will publish specifically for women.
But, facts support the issue and I am hoping readers of this blog will share their insights with me as I prepare the booklet. What have you found resonates with women - both those who are living alone ... as well as those who are married? My intent is to address both of these audiences with messages they will relate to.
What should be included in this brochure?
Please share your thoughts by sending me an E-mail to Jesse Slome.
Thanks. I can't think of a more important topic.
Jesse Slome
mailto:jslome@aaltci.org
Tuesday, March 10, 2009
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.
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.
Wednesday, February 4, 2009
Marketing Long-Term Care Insurance To Affinity Groups
Members of the American Association for Long-Term Care Insurance often submit questions via the organization's members only website. We solicit answers from leading industry experts and post them. I thought it would be valuable to post this one on our blog as well. As sales of long-term care insurance to associations and affinity groups grow, I believe you'll find this of value.
The American Association for Long-Term Care Insurance reached out to a leading national expert in the field, Joseph Pulitano of Advanced Resource Marketing, in Allston, MA.
The Question: I am agent of record for a large affinity group, and am debating whether to continue to use a mailback pro forma or to partner with an LTC specialty Managing General Agency (MGA). My question is, how many times more apps could I expect to receive by using the face to face process, vs the mailback process?
Joe Pulitano's reply: I don't have enough information on your group to give you a quantitative answer but I can certainly give some conceptual ones. In all of the associations and employer groups we market to we see participation rates much higher when the prospect is approached face to face with an agent.
The reasoning - Members/Employees have purchased life insurance and/or DI in the past and have perhaps purchased more than one policy. They tend to understand those products; the role they play in a person's overall financial plan and most people can adequately purchase them over the phone/mail/internet.
The people who have not purchased LTCi will hopefully only need to buy it once. For that to happen a well trained, competent agent who understands how to work affinity leads can guide a prospect through the role LTCi plays in a person's overall financial plan and help them purchase the right product at the right price.
Perhaps the best example of this is AARP. They have been offering LTCi to their membership for over 20 years strictly through over the phone and through the mail. Last year AARP contracted with a nationwide company of career agents to meet members at their homes and sell the product face to face. The results in most areas of the country have been phenomenal.
Yes, there are those prospects who do not want to sit with an agent and want to conduct business over the phone, internet, or through the mail, and as an MGA marketing to affinities we do accommodate those individuals with an on line education process and purchasing system.
When considering an LTCi MGA to handle your affinity there are several items you need to review:
1. What experience does the MGA have in affinity marketing?
2. Does the MGA have a regional of national base of agents who are experienced in working affinity leads?
3. What investment is the MGA willing to make to market to your affinity? Little or no investment means little or no leads.
4. Does the MGA have the ability to structure commissions to flow directly from the carrier to the affinity and the agent of record?
5. Does the MGA have an on line educational program Members can go to and get more information?
When an MGA is considering taking on this affinity project from you they may want to know:
1. What is the affinity between the association and the members?
2. Are other insurance products sold to affinity members?
3. What are the demographics of the affinity? There are some large affinities that will not be successful.
4. What is the retention rate of affinity members?
5. How long has LTCi been offered and what have the success rates been?
Affinity marketing of LTCi when marketed, sold, and administered correctly is a goldmine of opportunity.
Thanks Joe.
The Ask The Experts service is a benefit of membership in the American Association for Long-Term Care Insurance. To become a member, click here or type: www.aaltci.org/join into the address bar of your web browser.
The American Association for Long-Term Care Insurance reached out to a leading national expert in the field, Joseph Pulitano of Advanced Resource Marketing, in Allston, MA.
The Question: I am agent of record for a large affinity group, and am debating whether to continue to use a mailback pro forma or to partner with an LTC specialty Managing General Agency (MGA). My question is, how many times more apps could I expect to receive by using the face to face process, vs the mailback process?
Joe Pulitano's reply: I don't have enough information on your group to give you a quantitative answer but I can certainly give some conceptual ones. In all of the associations and employer groups we market to we see participation rates much higher when the prospect is approached face to face with an agent.
The reasoning - Members/Employees have purchased life insurance and/or DI in the past and have perhaps purchased more than one policy. They tend to understand those products; the role they play in a person's overall financial plan and most people can adequately purchase them over the phone/mail/internet.
The people who have not purchased LTCi will hopefully only need to buy it once. For that to happen a well trained, competent agent who understands how to work affinity leads can guide a prospect through the role LTCi plays in a person's overall financial plan and help them purchase the right product at the right price.
Perhaps the best example of this is AARP. They have been offering LTCi to their membership for over 20 years strictly through over the phone and through the mail. Last year AARP contracted with a nationwide company of career agents to meet members at their homes and sell the product face to face. The results in most areas of the country have been phenomenal.
Yes, there are those prospects who do not want to sit with an agent and want to conduct business over the phone, internet, or through the mail, and as an MGA marketing to affinities we do accommodate those individuals with an on line education process and purchasing system.
When considering an LTCi MGA to handle your affinity there are several items you need to review:
1. What experience does the MGA have in affinity marketing?
2. Does the MGA have a regional of national base of agents who are experienced in working affinity leads?
3. What investment is the MGA willing to make to market to your affinity? Little or no investment means little or no leads.
4. Does the MGA have the ability to structure commissions to flow directly from the carrier to the affinity and the agent of record?
5. Does the MGA have an on line educational program Members can go to and get more information?
When an MGA is considering taking on this affinity project from you they may want to know:
1. What is the affinity between the association and the members?
2. Are other insurance products sold to affinity members?
3. What are the demographics of the affinity? There are some large affinities that will not be successful.
4. What is the retention rate of affinity members?
5. How long has LTCi been offered and what have the success rates been?
Affinity marketing of LTCi when marketed, sold, and administered correctly is a goldmine of opportunity.
Thanks Joe.
The Ask The Experts service is a benefit of membership in the American Association for Long-Term Care Insurance. To become a member, click here or type: www.aaltci.org/join into the address bar of your web browser.
Thursday, January 29, 2009
Long-Term Care Insurance Producers Summit Planned
The American Association for Long-Term Care Insurance, the national professional organization, announced plans for the eighth National Long-Term Care Insurance Producers Summit.
The national conference which will focus on the marketing and selling of long-term care insurance as well as life insurance and annuity products that now offer long-term care benefits will be held November 15 and 16, 2009 at the Westin Crowne Center Hotel in Kansas City, MO.
The Summit is the premier long-term care insurance industry meeting for insurance and financial professionals who market long-term care solutions to individuals and the employer marketplace.
The Association is extending a special Pre-Early Registration offer--a $130 discount off the general registration fee of $325. In addition, for those who register before February 18th, the Association will provide two $25 credits toward room charges at the Westin in Kansas City. For details on this limited-time offer, contact Jesse Slome, Executive Director of the organization. Click here of call (818) 597-3227.
The national conference which will focus on the marketing and selling of long-term care insurance as well as life insurance and annuity products that now offer long-term care benefits will be held November 15 and 16, 2009 at the Westin Crowne Center Hotel in Kansas City, MO.
The Summit is the premier long-term care insurance industry meeting for insurance and financial professionals who market long-term care solutions to individuals and the employer marketplace.
The Association is extending a special Pre-Early Registration offer--a $130 discount off the general registration fee of $325. In addition, for those who register before February 18th, the Association will provide two $25 credits toward room charges at the Westin in Kansas City. For details on this limited-time offer, contact Jesse Slome, Executive Director of the organization. Click here of call (818) 597-3227.
Tuesday, December 23, 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."
Subscribe to:
Posts (Atom)
