I can give your group new program called “Long-Term Care Insurance (LTCi) Mythbusting.” It lasts a half hour and is available in your workplace or for your civic or trade association.

Here are the four LTCi myths this talk will bust:

1) LTCi is expensive.

2) LTCi rates go up and become unaffordable.

3) I don’t need LTCi yet.

4) The government will pay for my care.

Correct long-term care planning requires knowledge. Knowledge is power. I would be delighted to accept an invitation to speak to your group.

Honey speaking at Senior Market Advisor Expo

I’ve just returned from the tenth Senior Market Advisor Expo in Las Vegas. There, I was most most honored to be a featured speaker on long-term care insurance (LTCi). My talk was titled, “Sitting on a Goldmine: LTCi”. 

The conference was attended by about 550 fellow advisors who specialize in various aspects of financial planning in the senior marketplace. My presentation was about current events in the nation and the LTCi industry and their implications in LTC planning.

Some collegues present an interesting perspective I hadn’t thought of. The article, “LTC Expert says Long Term Care ‘Eats’ Almost Three Square Feet of Average American Home Every Day” explains how they’ve caluculated exactly how much of your home value, measured in square feet, is gobbled up each day if care is needed and you don’t have long-term care insurance (LTCi).

They are basing their calculation on average daily nursing facility cost and average home cost and size.

“The National Association of REALTORS(R) reports that the median price for U.S. homes is currently $183,700, according to their latest survey. With an average 2,422 square feet per home, according to the U.S. Census Bureau, that equals $75.85 per square foot, about enough to pay for a third of a day of nursing home care.”

Very simple arithmetic. Makes sense to me.  Hope stories like this prompt you to act. I urge you to purchase long-term care insurance if you are insurable and have not done so already.

In recent weeks we’ve had a spate of reporting from the Associated Press, New York Times, Wall Street Journal, and all the other major news sources on Medicare and its trust fund.

An August 6, 2010 Associated Press article by Stephen Ohlemacher and Ricardo Alonso-Zalidvar states that according to the annual report by Medicare and Social Security trustees, Medicare will have enough money to run a dozen years longer than earlier projected.

Top Medicare actuary Richard Foster warned that the report’s financial projections “do not represent a reasonable expectation.”

Kathleen Sebelius, Secretary of Health and Human Services and one of the trustees, said the report was based on proposed cuts in Medicare payments, which she doubts will happen.

Related articles point out that job loss and the current recession are causing people to collect Social Security sooner than anticipated. They also note that health care reform includes reducing payments to Medicare providers and reducing future Medicare spending.

If you don’t own long-term care insurance, I hope information like this will prompt you to act accordingly and buy it now. It should be obvious that the government can’t—and won’t—pay for your long-term care.

Age 73 with health problems is not the right time to acquire long-term care insurance (LTCi).  Today I got a call from such a person’s son, eagerly wanting to buy LTCi for his mom from me.

I get more calls of this nature then you can possibly imagine !

These folks often appear to be incredulous upon hearing they’re not eligible for LTCi. I am “the heavy”, having to deliver this news.

I always suggest that now is the optimal time for the healthy, younger caller, to find very reasonable rates for LTCi. We talk about how the parent’s circumstances are the ideal illustration of what havoc can be wreaked without LTCi. Few take me up on my offer to teach them the basics of LTCi with no obligation. Evidently, the family is in a predictable state of panic, damage control and duress caused by the loved one’s need for care and lack of finances to pay for it. All they appear to be consumed with when we talk is trying to douse the fire caused by lack of owning LTCi.

What is it that causes people to avoid talking about and planning for the future responsibly, while they are able to insure their dignity, options, choices, and wealth with very reasonably priced LTC insurance? I think I will never fully understand this part of the human nature.

I’m getting asked a lot about the new, government run CLASS (Community Living Assistance Services and Supports) LTC program that is part of the healthcare reform passed earlier this year.

Here’s a quote related to CLASS that I’ve seen over and over: CLASS LTC ”is a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” Senate Budget Committee Chairman Kent Conrad (D-ND) said this.

CLASS LTC is not due to be off the ground and running until sometime in 2012. Prior blogs I’ve done on CLASS LTC will give you additional background.

The Congressional Budget Office (CBO), the American Academy of Actuaries, and Medicare’s Chief Actuary (Rick Foster) are all in agreement that CLASS LTC funding will not be sustainable, and will attract enrollees with the highest costs.

Mr. Foster predicts that the program will run deficits in 2025 and thereafter. He states premiums will initially need to average about $240/month for CLASS LTC to remain in the black. He calls CLASS LTC “an insurance death spiral.” Due to the program’s high costs, it is likely to attract the most expensive enrollees and discourage young and healthy people from enrolling. This is likely to cause premiums that continue to increase.

The CBO said CLASS “…would add to budget deficits in the third decade – and succeeding decades – by amounts on the order of tens of billions of dollars for each 10-year period.”

Two articles entitled “The CLASS ACT: Repeal Now, or Face Permanent Taxpayer Bailout Later“, by Brian Riedl and James Capretta, and “No CLASS: How Congress Saddled Taxpayers with Another Costly Entitlement,” by Brian Blase, were recently published by the Heritage Foundation. The second piece gives a great description of the CLASS LTC program and its history. It also graphs its projected economic failure.

There is now a bill to being proposed by Dr. Charles Boustany (R-LA) to rein in the CLASS Act. Click here for an article that will give more information on Dr. Boustany’s bill.

A July 16, 2010 article by John Leland of the New York Times states that since the start of the recession, at least 25 states and the District of Columbia have curtailed programs that enable low income, disabled people to remain at home.

In Oregon early this month, 4,500 low-income residents received letters stating that their state-paid home health care benefits would end. Cuts affecting an additional 10,500 residents are scheduled for October 1. This is due to Oregon’s $577 million budget deficit.

Ironically, what is likely to happen is that due to cut services, many of the affected will wind up in Medicaid-paid nursing homes, which are far more costly. Oregon’s average cost of nursing homes is $5,900/month, while the cost of the slashed home care services averages $1,500/month.

These cuts do not seem logical, but they are.

Medicaid is a joint state and federal program. Its rules require states to provide nursing home care (but not home health care) in order to receive federal money. In Oregon’s case, over half of its Medicaid dollars are spent on the home health care services being cut. The easiest place for it to save money and balance its budget without jeopardizing Medicaid funds is to slash home health care benefits.

Unfortunately, such money-saving cuts are likely to be “penny-wise and pound-foolish”. Many of those affected may wind up having incidents that will cause them to need nursing home placement in short order.

In the past Medicaid has paid for care for indigent, disabled people. Sadly, it is increasingly obvious that Medicaid as we’ve known it is simply unsustainable.

A favorite excuse for many wanting to avoid a conversation about responsible long-term care planning has been to insist that the government will pay for their care if they need it. I hope this blog helps readers understand how unwise this belief is.

Dave, Dave, Dave. How long have I been responding to your half-baked advice on long-term care insurance (LTCi)? And you have never given me the courtesy of even a cursory reply, but that’s another issue.

 Click here to read Dave Ramsey’s latest, very bad advice about LTCi.

Here’s my latest response to Dave’s illogical and incorrect advice:

Hey Dave
Love you and your mission to help people, but you have your facts wrong. www.ownyourfuturetexas.org, a government site not created by “pushy” insurance agents, advises people to purchase LTC between the ages of 55-64. Buying it earlier is an even better idea, as your prior reader confirmed.

Also according to this site, 43% of all care received in the US is needed by people under 65. The highest odds of needing care are in the last 1/3 of your life, which also confirms the age 55 advice. Should we just take your advice, or are we better off researching some of many correct, credible sources like  www.medicare.gov, www.longtermcare.gov,  www.mylifemyfamily.com and www.ownyourfuturetexas.org, to name just a few? All of these highly reputable sources oppose your advice.

Why wait until 60 to buy LTCi? By then, many have medical issues that make getting approved difficult or impossible or more expensive.  LTC insurance pays for home health care and assisted living (people’s preferences), enabling most policyholders to AVOID nursing homes.

You’ve been giving this erroneous advice for years. I urge you to learn more about LTC to get your facts straight…otherwise, loyal fans who follow your incorrect advice could be adversely effected.

Honey Leveen, Houston, TX

I am very excited to learn that my good friend Phyllis Shelton appeared on Lifetime Television’s The Balancing Act today at 7 AM EDT. Phyllis is President of LTC Consultants, a Nashville-based company she founded in 1991 that specializes in long-term care insurance education and training. Phyllis has long been recognized as one of the most powerful people in the long-term care industy. She is passionate about her quest to educate professionals and the public not only about long-term care insurance, but also about the ramifications of needing care or being a caregiver. Those of us who know Phyllis have deep respect and admiration for her. I love you, Phyllis, and bravo!

Here’s a quote from the press release describing what the program covered:

“She will set the record straight that the issue of long-term care is not solely a financial problem. It’s first and foremost a threat to family relationships, with the burden particularly falling on women. “The caregiving tsunami that is about to hit this country could be the greatest threat to everything women have accomplished in the workplace. The age 55 segment of the workforce in the United States is the fastest growing segment, and that’s when women typically hit their peak earning years with the career they’ve worked so hard to build. It’s also primetime for becoming a caregiver, but it can happen much earlier,” says Shelton.

“Most people don’t realize that one-third of care recipients who are impaired enough to collect benefits on a long-term care insurance policy are under age 65,” Shelton points out.  ”It is never too soon to talk to your spouse, parents, in-laws, or any extended family members you think you may wind up taking care of about planning for long term care,” states Shelton. “Without a plan in place, the pressure of paying for caregiving, both with time and money, can rob your family of important lifestyle choices such as being able to pursue the career of your dreams, provide a child’s college education, or fund your own retirement.”

A recent Age Wave/Harris survey backs up her opinion. When asked about the most important reason to plan for long-term care, consumers said they are twice as concerned about being a burden on their families as about protecting their assets.  They also named emotional strain as the greatest worry about becoming a caregiver, even more than the financial sacrifice.

The impact that caregiving can have on this country is astonishing. Women make up almost half of the workforce in the United States. Since most long-term care is at home and over two-thirds of the caregivers are women, employers are looking at a huge loss of productivity if their female employees aren’t able to rely on long-term care insurance to pay for caregivers when a spouse, parent or adult child needs extended care.  ”That is why it is so important for employers to include long-term care insurance in their benefit offerings so that it is available to employees and their families at age 18 and up,” added Shelton.

The following words are true and not a paid endorsement. For the longest time, this client’s plan was to self-insure for her long-term care costs. Over time, she observed the circumstances of  people she knows who planned and saved properly, yet have been forced to downsize their lifestyles due to today’s unpredictable circumstances. She is now very glad she’s purchased LTC insurance.

“Dear Honey:

In planning for my future needs I recognized that the odds of needing long-term care are high. I considered that currently I can afford to pay the cost of this care if I need it, and that my orientation to living my life while I am able, is to go forward with as much zest and adventure as possible. I love my kids and would also like to leave something for them if possible.

I am a professional who works with the elderly and am aware of some of the difficulties some clients have recently had to face. These are the most uncertain times I can remember. I know people who had saved properly and invested conservatively, yet now their incomes are lower then projected while expenses have unfortunately increased. Sadly, they’ve had to downsize their lifestyle in order to accommodate these unexpected circumstances.

The options I was able to select in my long-term care insurance policy provide peace of mind in that my policy gives me a cushion to provide for that additional care expense in the manner that suits me.  Thanks for taking the time and patience for me to make a proper choice in a long-term care policy.

C. B.

Houston, TX

June, 2010″