Archive for the ‘Guest Columns’ Category
There have been tremendous changes and fluctuations in the long term care insurance industry in the last 15 years. The cost of care has more than double while the cost for long term care insurance has tripled and in some cases quadrupled. There are also fewer companies offering traditional long term care insurance in the marketplace now than at any other time.
There are a couple of reasons for this. The first reason is the low interest rate environment that we have seen for the last several years. Insurance companies have seen dramatic changes in their investment income due to these lower interest rates. Secondly, and more importantly, are claims. More policy holders have bought and kept their policies than what was anticipated. Also, those policy holders have used those benefits. Long term care insurance claims are expensive and can be worse than medical claims in a lot of situations. They can continue for years. Imagine writing a check for $ 6,000 every month for the next four years.
According to the Department of Health and Human Services, on average, someone who is 65 today will need some type of long-term care services and supports for three years. Women need care longer (on average 3.7 years) than men (on average 2.2 years), mostly because women usually live longer. While about one-third of today’s 65-year-olds may never need long-term care services and supports, 20 percent will need care for longer than 5 years. Bottom line: Insurance companies are losing money on long term care insurance because their clients are using it.
What are your options then? You can do nothing. (bad idea) You can self-insure. (Just make sure you have the financial means to do so) Or, you can get a plan.
I’ll touch on three different concepts. Because of the Pension Protection Act of 2006, there has been an influx of hybrid products over the last five years. Hybrid products combine other traditional long term care insurance with some other type of insurance. One popular combination is pairing life insurance with long term care insurance. These products allow you to access the life insurance policy’s death benefit to pay for long term care services. It also provides a death benefit to beneficiaries if you use little or no long term care services.
Another popular combination is putting together annuities with long term care insurance. This is for someone who may have put aside a certain amount of money into a CD for a “rainy day” fund. They may not say it, but in reality, this is their nursing home fund. Hypothetically, you could put $50,000 into a specially designed annuity. If the need for long term care services arises, then they have $ 150,000 worth of benefits available to them to pay for those services. The benefits come out tax free and if they don‘t use it, the beneficiary would receive the $50,000 with interest at death.
Finally, for younger individuals (under age 70), I would certainly encourage you to still look at traditional long term care insurance. It might still be the best for you. Younger ages haven’t been hit as hard on those price increases. Explore long term care insurance, see what’s out there, and above all, develop a plan for you and your family.
Chris Ward is an insurance broker located at Advisors Financial Center in Asheboro, NC. He has been specializing in life life, long term care, and medicare insurance products for over 20 years.
Guest Columnist . . .
Patricia A. Shevlin, MD
At the beginning of every year, most of us try to get organized, make a few resolutions about what we could do better and start new prescription drug plans. One area that is frequently neglected is the medication list. In an effort to cut down on medication errors, I offer my recommendations to patients about their medications.
- Keep an updated list of your medications with you. Include the prescription and the non-prescription medications. Before your appointments, review the list by comparing it to the bottles that you have at home. If there is a discrepancy, you should adjust your list. If there is an error or suspected error you will be able to get it corrected by calling the office of the physician who wrote the prescription, or ask at the office visit. At the appointment or when you get home, add any new prescriptions to your list.
- Include on the medication list the reason for the medicine, such as diabetes or blood pressure. I think this makes it easier to organize your medications and to realize what to expect if you miss a pill or run out of a medication.
- To prevent running out of a medication, I strongly recommend a weekly pill container. When you fill this every Saturday or Sunday, you will know in advance when you need to call for refills. No matter how efficient an office or pharmacy is, delays can occur due to electronic transmission errors, fax machine downtime etc. The sooner you can request a refill, (within the requirements of your insurance company), the better.
- The weekly medication container is NOT an indication of memory impairment. Most of us are busy and when we have medications we take at the same time day after day, it is easy to think you have taken a medication when you have not. I remind patients all the time that birth control pills have come in packages with the day of the week written on them for this exact reason. It’s not a problem just for the seniors.
- Keep the prescription and non prescription medications that you take on an as needed basis separate from the daily medications. The names should be on a separate list or the back of the daily list. The bottles should be in a separate bag. This cuts down on confusion, especially when filling the weekly pill container. It also helps a family member who may be helping you when you are sick and need one of those medications.
You may be asking yourself “Why do I need to do all of this? My doctor has a record of my medications.” First of all, you are the patient and you are responsible for what goes in your body. In addition to your health, it’s also your money that’s at stake here. Most of us have multiple doctors and all of our medicines are not written in one place. Bringing your list should encourage your physicians to put the entire list into their records. Finally, many patients use multiple drugstores. There are mail order options for daily medications, local drugstores for acute medications and $4 options for some medications. The possibilities for confusion are endless. Everybody needs a reliable system.
Dr. Shevlin is a partner in Asheboro Family Physicians of North Carolina, PA