Transcript A Family Affair - Wholesale Insurance Broker

A Family Affair
Planning Today for Tomorrow's Future
Long-Term Care
© Individual Commercial Administrators, Inc.
The
Rights and
Benefits of
Medicare
and Medicaid
© Individual Commercial Administrators, Inc.
The Missing Link
In Your Financial
Plan
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We are living longer
• U. S. population will
continue to grow
substantially in the
future
• Single-parent families
are increasing
• More women, the
traditional care givers,
work outside the home
• Living longer is a gift
• Have we prepared
mentally, financially and
emotionally?
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MediCARE
“In 1998, it was estimated that
between Medicare, Medicaid, and
other programs the federal
government paid 64% of long
term-care dollars.
These amounts, however, do not
include many hidden costs of
long-term care since an
estimated two-thirds of the
disabled elderly living in the
community rely exclusively on
their families and other unpaid
sources of care.” *
* U.S.Department of Labor, Advisory Council on Employee Welfare and
Pension Benefits, Nov., 2000.
© Individual Commercial Administrators, Inc.
2008 MediCARE
Part-A (Hospital)
Your Cost
$ 1,024.00
Deductible
$
1st Through 60th Day
0.00
$ 256.00 Per Day
61st Through 90th Day
$ 512.00 Per Day
91st Through 150th Day
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Medicare pays for
‘Skilled’ Nursing Home Services
Medicare pays 100% of the Cost for
the First 20 Days
You pay $128.00 per day for the 21st
through the 100th day
After 100 days, YOU pay ALL
Medicare requires three day prior
hospital stay
 Must be Medicare Approved Facility
 Custodial Care NOT Included
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MediCARE
Part-B (Doctors)
80% of Medicare Approved Charges After Annual
Deductible of $135.00 that you pay.
Medicare Pays for:
•Immunosuppressive Drugs for 1st Year After
an Organ Transplant
•Injections for Broken Bones for Individuals
Who Have a Diagnosis of
Post-Menopausal Osteoporosis
•Mammography Screening for Women
over Age 65 Every 23 Months
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What is Long-Term Care?
The Assistance or Supervision
given to a person who has a
physical or mental disorder which
causes the person to no longer
function independently. This can
be due to injury, illness or the
normal aging process.
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The Greatest
Problem
DENIAL
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Medicare Pays for Long-Term
Care Services ONLY if:
 Care Provided in a Skilled Nursing Facility
 Must be Medicare Approved
 You Must Complete a Three Day Hospital Stay
 Skilled Care is Provided
 The Illness is “Restorative” in Nature
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Is Long-Term Care Only
Used In Nursing Facilities?
NO!
Long-term care can be provided in the privacy
of your own home, an Adult Day Care Facility
and other types of facilities.
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Long-Term Care
The truth is, long-term care today
does not always mean care in a
nursing home.
More and more, professional longterm care services are being
delivered in the comfort of one’s
own home, or in outpatient
facilities in the local community.
Yet the fear lingers, largely
because we don’t want to ask
simple questions and explore
readily available options.
Home
Health
Care
Medicare Pays for:
Medically Necessary
Part-time or Intermittent
* Physical Therapy *
* Skilled Care *
* No Hospital Stay Required *
* Custodial Care NOT Included *
© Individual Commercial Administrators, Inc.
Who Pays for
long-term care Services?
Other
6.3%
Medicar
e
17%
Private
Insurance
7.4%
Medicaid*
39%
Self and Family
29.5%
*.
© Individual Commercial Administrators, Inc.
Source: Health Care Financing Administration, Dept. of Health and Human Services, 2000
Who Pays for Long-Term Care?
Medicare
Supplements
Medicare
YOU
Private
Insurance
Medicaid
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Why the Need for LongTerm Care Protection?
“There are only four kinds
of people in this world.
Those who have been
caregivers, those who are
caregivers, those who will
be caregivers, and those
who will need caregivers.
Rosalyn Carter, Former First Lady,
The Rewards of Care Giving, 1999
“40% of the 13 million
Americans currently
receiving LTC services
are between the ages of
18 and 64.”
U.S. Dept. of Labor, Advisory Council
on Employee Benefit Plans, 2000
“More Americans die of Alzheimer’s
disease (49,044) than
In motor vehicle accidents (41,804).
Wall Street Journal, Jan, 25, 2002
© Individual Commercial Administrators, Inc.
More Facts You
Should Know
60% of Americans over age
65 will require long-term
care in their lifetime.*
1 in 5 Americans over age 50
will need long-term care services
in the next 12 months.**
Women are 1 ½ times more likely
than men to enter a nursing home
after age 65*
Key Issues of
Eldercare
"Distance between loved
ones (most family
members and their elders
live an average of 100
miles away from each
other), and the extended
family's assumptions of
who'll take on what
responsibility."
Benefits & Compensation Solutions
Retiring Rich, Retiring Well, Sept. 1998
"One in every four
employees is handling
some level of family elder
care responsibility right
now."
Risk Potential
2001, more than ¼ of the adult population had
provided care for a chronically ill or aged family
member.*
The odds of a person needing LTC are greater than
50%. Much higher than the odds of being in a car
accident or fire.**
2001, 12.1 million Americans of all ages needed
assistance with daily activities.
The over age 65 population will double again by year
2030.***
* Americans for Long-Term Care Security (ALTCS), “Did You Know?,” July 26,2001.
** Phyllis Shelton, 2000 LTC: “ Healthy Concepts” Financial Planning, Sept. 2000.
*** “Just who is Supposed to Care for Caregivers?” Chicago Tribue, by Janet Stooley, May, 2001.
****Ibid
© Individual Commercial Administrators, Inc.
Baby boomers are part of the
“sandwich generation”
pressed for money
taking care of their own
children
taking off work to stay with a
loved one
stress and anxiety at the
workplace
affects job performance
Questions To Ask Yourself
 Do you know where the money will come
from if you need to stay in a nursing facility
or at home?
 How long will your money last?
 Does it make sense to use your interest on
principle (CDs or Mutual Funds) to protect
your assets to pay for long-term care?
 Can you count on your family to be able to
help you?
© Individual Commercial Administrators, Inc.
MedicAID what is it and what
does it cover?
A federal, state health
insurance program for the
poor.
In 2000, Medicaid paid
48.1%.
Medicaid recipients also
must contribute most of
their income. Most which
comes from Social
Security paymentstoward their cost of care.*
* “Hope for a Healthly Marketplace”, A.M.Best Review April, 2002.
© Individual Commercial Administrators, Inc.
MEDICAID
Medicaid is really a welfare
safety net run by the
states and federal
government.
You (a single individual)
will have to give up all
but $2,000 of your
financial assets in order
to qualify for nursing
home coverage under
Medicaid. This number
varies by state.
© Individual Commercial Administrators, Inc.
2006 MEDICAID
Spend Down Reference Guide*
$ Home:
Regardless of income. Some states protect the home for a period of up to
six months, but only if you are single.
$ Automobile:
Up to a $4,500 value, no limit on value if it is used to go to work or used to
receive medical care.
$ Personal Belongings:
$ Wedding Ring:
$ Property:
$ Life Insurance:
$ Assets:
$ Burial Costs:
$ Personal Needs:
$ Home Maintenance:
Household goods and other personal items up to $2,000.
One wedding ring and one engagement ring, unlimited value.
Up to $6,000 equity in personal and real property, if essential for support.
Cash surrender value of $1,600
About $2,000
Funeral and burial plots up to $2,500
Allowance is $35 to $70 per month. Money spent for personal expenses are
not covered by Medicaid.
Allowance of about $2,000 per month.
•2002, Married Couples: half of the couple’s combined assets up to approximately $89,280. The community spouse may keep the first
$17,856. This figure will vary from state to state. 2002 Federal Guidelines.
© Individual Commercial Administrators, Inc.
OBRA 1993 - RECOVER AGAINST YOUR ESTATE
REQUIRES STATES TO RECOVER NURSING HOME
MEDICAID EXPENSES FROM THE
ESTATES OF DECEASED RECIPIENTS.
STATES CAN CLAIM ANY REAL OR PERSONAL
PROPERTY, INCLUDING THE HOME YOU HELD IN
YOUR OWN NAME.
THE STATE MAY EVEN RECOVER
FROM ASSETS YOU GAVE AWAY OR OTHERWISE
DISPOSED OF PRIOR TO DEATH, PROPERTY YOU HELD
JOINTLY WITH SOMEONE ELSE.
NO RECOVERY IS MADE FROM LONG-TERM CARE
INSURANCE PAYMENTS!
© Individual Commercial Administrators, Inc.
States are driven by
Dollars & Cents
State Recovery: The amount recovered by
the State programs is a tiny drop in the
bucket. But it is growing! Recovery
percentage example:
ARIZONA 7.9%
MAINE 3.4%
OREGON 5%
IDAHO 2.8%
NEW HAMPSHIRE 2.6%
States are finding this program is extremely
cost effective, collecting $10 to $12 in
assets for every dollar “invested”.
Kiplinger’s Personal Finance Magazine. April, 1998 1998
Most Important Reasons to
Purchase Long-Term Care
1.
Choice & Remaining Independent
2.
Protection of Assets
3.
Avoid Emotional Burden on Family Members
4.
Guaranteed Affordability of Service
5.
Avoid Physical Dependence on Family
6.
Quality of Care
7.
Peace of Mind
2000 Health Insurance Association of America
© Individual Commercial Administrators, Inc.
Cost Sharing
You Pay
Company Pays
1 Year LTCI Premium
$30,000 to $70,000 for 1 year
Client premium usually is the cost
of 2 weeks to 1 month
of nursing home care cost.*
* ICA 1998 research study
© Individual Commercial Administrators, Inc.
What if I put my money into
savings instead of paying
insurance premiums?
Even if you had $500,000 in
assets, you could see them
quickly erode. This could
have serious impact on a
spouse or other dependents
and may significantly alter the
lifestyle the individual
maintained prior to the
disability.
Illness or injury can strike
at any time!
© Individual Commercial Administrators, Inc.
Length of Time it Would Take to
Save $30,000
(Savings Compounded 5% annually)
Amount
Saved
Per
Year
$3,000
$2,000
$1,000
0
2
4
6
8
10
12
14
16
YEARS
© Individual Commercial Administrators, Inc.
You want to pay for LTC
Services?
Does it make
dollars and sense?
Top Most Expensive places to live in a
Nursing Home-Cost per year
Alaska
$163,400
NY City (Metro)
$106,500
Connecticut
$93,500
NY(outside)
$90,000
D.C.
$88,000
Hawaii
$86,000
Mass.(Outside
$82,500
Boston)
Boston, Mass.
$82,000
New Jersey
$80,900
Phila, PA
$79,900
GE Capital Nursing Home Study in 50 States, 2002.
© Individual Commercial Administrators, Inc.
When is the right time to
consider long-term care
Insurance?
• Are you between the ages of
48 - 75?
• Are you retired or planning
for retirement?
• Do you have $50,000 + assets
not including your home?
• Are you reasonably healthy?
© Individual Commercial Administrators, Inc.
Have you considered the
following?
Who will take care of you? Your
children? Your spouse?
Can they physically lift you?
Can they assist in the normal
activities of daily living such as:
bathing
eating
dressing
walking or transferring
toileting
Would you want them to assist you at
home in the activities of daily living?
© Individual Commercial Administrators, Inc.
Long-Term Care Insurance
Tax Deductible
Owners of C-corporations:
get a corporate deduction
provide policies to a select group
allow the employees to exclude the premium from the
employees’ taxable income
keep the employees’ potential LTCI claims benefit
tax-free
may include the employees’ spouses and dependents
Self Employed - may deduct up to 100% of age based
annual LTCI in year 2003.
© Individual Commercial Administrators, Inc.
2007 Long-Term Care Insurance
Tax Deduction
Individuals: may deduct long-term care insurance
premiums that are subject to 7.5% of income. Limits
will vary according to the age of the consumer.
Benefits are always TAX-FREE
Age
Eligible Premium
40 or younger
$290
41 through 50
$550
51 through 60
$1,110
61 through 70
$2,950
Older than 70
$3,680
Long-Term Care Insurance
The Foundation of Every Household
© Individual Commercial Administrators, Inc.
What other risk do you know that
can change your life and your
family’s life - emotionally,
financially and medically?
L
iving Benefits to Preserve Lifestyle
T
otal Protection
C
hoice and Independence
© Individual Commercial Administrators, Inc.