Outside Economics

What's Up With AARP and Long Term Care Study?

Posted by Wendell Brock, MBA, ChFC on Fri, Jun 30, 2017

This week an article I saw caught my eye…every three years AARP conducts and publishes a scorecard on how each state performs with regard to caring for our elderly, primarily centered around long-term services and support, basically long-term care. There were five main areas of focus for the study, Affordability and Access, Choice of Setting and Provider, Quality of Life and Quality of Care, Support for Family Caregivers, and Effective Transitions. Now people may say what does this have to do with me? I am working, I have a family, and saving for retirement, I am not interested in long-term services for the elderly.

That may be the case, but if you are on the earth and living, then you have parents who may still be living, and at some point you will have to assist them. Or you are older and you can see the top of the mountain you have been climbing for the past 30 plus years and retirement is getting closer; perhaps you need to stop for a moment on the journey and rearrange the gear in your pack, pickup a few tools to make the decent down the mountain much easier and more secure.  Either way this is for you.

Here are some highlights on this interesting article that are important for us to learn.1497018516323_2484036_1497017731134.jpg

Most states saw some improvement in fact more improved than declined. Few had meaningful improvement over 10 percent in any one category. The study reported: "Most notably, the majority of the states had no meaningful change in each of the five measures in the Affordability and Access dimension. The cost of Long-term Services and Support (LTSS) over time remains much higher than what middle-income families can afford, and most adults do not have private long-term care insurance."                                     Source: State Long-Term Services and Supports Scorecard, 2017.

It was interesting to see that there was no improvement in the vast population of this country in regards to people becoming more prepared for their future by purchasing Long-term Care Insurance.

One area where there was significant improvement was in the area of Family-Centered Care. Family caregivers provide the majority of care for the elderly and recognizing their needs is a positive signal. The article discussed the success measured across the following three main areas:

  • Family caregivers are assessed for their own needs;
  • States have adopted spousal impoverishment provisions in Medicaid home and community-based services; and
  • States have enacted the Caregiver Advise, Record, and Enable (CARE) Act to notify the family caregiver before the person is discharged from the hospital and to instruct the caregiver on how to perform follow-up medical/nursing tasks."

Families that care for their parents are true angels and it can be so difficult for them, many work and have children at home complicating matters more. Receiving some support in the form of education and understanding of what needs to be done to take care of your partents is huge.

One area where improvement was not so dramatic was in Effective Transitions. Effective Transitions is the process of moving a person from a hospital to a nursing care facility to recuperate and then back into their community. The aim is to help people who have been in nursing homes 90 or more days to transition back into the community. Only a few states saw improvement in this area.

The benefit of this is that people are really more comfortable in their own surroundings, in their own home, which is where they should be. The challenge is that only about 5 percent of people  on average who have been in a nursing home greater than 90 days transition back home. Receiving care at home is less expensive as well - saving retirees thousands of dollars.

The bottom line is that state law, best practices and the way people are cared for are changing. If people want to be cared for in their advanced age, it is best to make a plans now, if your parents are retired or over age 50, talk to them about their plans. The government has a plan for you - you will be cared for in one way or another, it may not be a the way you would like, but you will get care! Let your family members know what your plans are and make your wishes known (in writing). Helping those closest to you understand what to do to help is one of the kindest things you can do. Nobody wants to improperly care for a parent or other family member.

Educate yourself on the ins and outs of Long-term Care, learn the differences between assisted living, home health care, and nursing home care. What are the long-term care triggers, and how do they work? Review your budget and look at how you would pay for the different levels of care. Part of your plan may include obtaining some long-term care insurance, make sure the premiums are guaranteed for life. It can be difficult to pay into a policy for several years only to get an unaffordable premium increase.

For more information on other long term articles you can look hereor here. To see how your state did in the AARP study you can look here. The report was well done and offered some real insights into the overall needs of one of our nation's most valuable resources, our seniors.


I wish my wallet came with FREE refills! ~ Anonymous

Topics: Long term care, Long term care insurance, Long-term Support and Services

Who Should Have Long-Term Care Insurance?

Posted by Wendell Brock, MBA, ChFC on Wed, Nov 25, 2015

November as we know is the month in which we celebrate Thanksgiving, perhaps the most celebrated and gratefully under-commercialized holiday of the year, for which I am truly thankful. I love Thanksgiving – it is my favorite holiday. November is also Long-Term Care awareness month.

Long-Term Care is so very important to plan for. Throughout our lives we are bombarded with taking care of risks we are exposed to, auto accidents, home owners’ problems, life and disability, etc., but often we do not plan much for the end of our lives (actually few people die with a valid will in place). And what is left for our loved ones is literally a financial mess on top of the emotional challenges of losing a family member.Long-term_Care.jpg

Below is some information from two studies I would like to use, they lay out some statistics about Long-Term Care. The people who are prepared or ill-prepared for such a catastrophic problem might find the motivation to look for more information to help their unique situation.

According to researchers at Georgetown University and Pennsylvania State University, about 70% of individuals 65 and older will need some kind of long-term care—whether at home, in an assisted-living facility or nursing home.

But how many of them should purchase a long-term-care insurance policy? That number, it turns out, is far lower—at 19% of men and 31% of women, according to a new study published by Boston College’s Center for Retirement Research. (Women live longer on average, and so they’re statistically more likely to incur long-term-care costs; my own mother lived 27 years past my father.)

Surprise - most “individuals should not buy insurance,” wrote the authors of the paper, which was published in November 2014. However, this study only looks at strictly “nursing home care” and ignores assisted living facilities or home health care. Neither of these two levels of care are provided for by any government programs.

Most people do not need the coverage because they do not have a sufficient level of assets to protect. People work their whole lives to provide for themselves and their families, what is left over at the end they want to pass on to their heirs, Long-term Care insurance can help protect that final nest egg, so there is something left.  The value of owning a Long-term Care policy is related to the amount of assets one has and the estimated amount needed to cover the catastrophic cost of long-term care. Additionally the authors found, that for many people of modest means the coverage provided by of Medicare and Medicaid are adequate to cover most of their needs. 

To assess the odds of needing long-term-care, the researchers used government data to “calculate monthly probabilities of transitioning among various health states” from age 65 on. The “health states” are: “healthy, requiring home health care, living in an assisted living facility, living in a nursing home and deceased.” The data show that 44% of men and 58% of women will spend at least some time receiving nursing-home care.

However, many people spend only short spells in nursing homes. Government data show that, on average, men who require nursing-home care spend an average of less than a year in such care over their lifetimes. For women, the figure is about one year and four months.

As the study notes, “many short-duration stays in nursing homes are covered by Medicare,” which covers stays of 100 days or less following a hospital stay of more than 3 consecutive days, Half of all men and 40% of women who use nursing-home care fall within this coverage window, and Medicare picks up their tabs.

At the other end of the spectrum, Medicaid picks up the tab for extended stays in nursing homes for those who run out of money. There are also those people of modest means who try to game the system by spending their assets and thus causing self-inflicted poverty to qualify for Medicaid.

So who should consider buying coverage? According to Anthony Webb, a senior research economist at the Center for Retirement Research and a co-author of the paper, those with significant assets—of a couple hundred thousand dollars or more ($200,000)—should look into a policy. The target market, he adds, is “people who have a sizable amount of household financial assets and would be unlikely to qualify for Medicaid.”

Two things to remember: 1) The study primarily focused on nursing home care, and that type of care is far more comprehensive care than assisted living care and Home Health Care, both of which is covered with Long-Term Care, but not covered by Medicaid or Medicare. People tend to spend more time in assisted living facilities and using home health care then nursing home care. Nursing home care is truly an end of life type of care.

2) What triggers the receiving of long-term care benefits is the loss of two of six activities of daily living, which often allows a person to remain at home, but simply need help on a daily basis to tend to certain activities.

It is likely that in your adult stage of life, most people have experienced a friend or relative that has needed and or used, home health care, assisted living care, and/or nursing home care. There are many different types of policies to choose from. You will want a policy which is simple to understand and yet is flexible enough to cover your needs, while at the same time not being subject to massive rate increases. Or worse, a reduction of the benefits you have paid for, because you can’t afford the new rate increase.

My family has several times expressed gratitude for the policy my mother had, which kept her estate intact and left more to her heirs. It was a wonderful blessing for which I am truly grateful. But more than that it made it possible for my sisters, who were responsible for her, to be care managers rather than care givers – a significant difference between the two roles – and a major difference in the quality of life for both the care manager and the one receiving the care.

With that - I wish y'all a very happy Thanksgiving!



“When you walk with gratitude, you do not walk with arrogance and conceit and egotism, you walk with a spirit of thanksgiving that is becoming to you and will bless your lives.” - Gordon B. Hinckley

Topics: Long term care, LTC, Long term care insurance

Long-term Care Who Needs it Anyway

Posted by Wendell Brock, MBA, ChFC on Thu, Nov 14, 2013

Once my mother asked me about long-term care insurance, she had obtained a policy through AARP, which was short on benefits, or peace of mind. I was early in my career and visiting my mother when the conversation started. Now my mother was an amazing women, she was a retired school teacher, served a church mission, tore down an old dilapidated house and built a new one in its place, and finally settled into a comfortable retirement, she raised seven children in Los Angeles in the 50’s through the 70’s.  

We looked at a some options and settled on one that was a little more expensive (maybe $25 per month), but it had more than twice the benefits. Today’s policies are even better.
elderly womanWhen you are in good health and life is clicking along smoothly, it seems that a long stay in a nursing home or even home health care is something that happens to the other guy! Similar to the young folks who are newly married, maybe with one or two kids, and thinks that life insurance is for people who live riskier lives. This is simply denial!
In today’s world with the higher standard of care, medications, diets, etc., the need for long-term care is more likely than not for our older and wiser population. Families find it more difficult to provide the necessary level of care that our aging population needs. Providing for long-term care is a necessity.
So the problem becomes, which assets are mom and dad going to sell/liquidate in order to provide the care? The family home? The retirement account? The family business? And how will the remaining spouse survive when one enters a care center?

About ten years ago my mother, who was in great health, was diagnosed w
ith Alzheimer’s. She began the medications and had to fight with medicare over the payment. After a couple years her home was too much for her to manage so she went into a retirement center, where she had an independent apartment, soon after that, my sister filed a claim on her long term care policy to help pay the bills. 

It was amazing having the policy, it allowed my mother to have a nice place to live and have a nurse on duty if needed. Eventually, when she required more care she moved to a different center with an Alzheimer’s unit, which provided the additional attention she needed. 

This policy, allowed my mother to really enjoy her final years not worrying about how she was going to be cared for, should she need the extra care. This is peace of mind! She passed away this past spring and her family was all around, she left an amazing posterity, with over 40 grandchildren, and over 50 great-grandchildren to date. My sisters who had the main charge of caring for her, (making the medical/financial decisions, etc.) expressed their gratitude for the policy. It provided them with the peace of mind in knowing that our mother would receive the best car
e and be comfortable in her final days. In short it was a great blessing.

This piece of mind came with a cost, a small cost compared to the benefit. I don’t need to share numbers, simply because everyone is different and with today’s policies, things are different; what matters is the peace of mind, and that is the same. Do you need more peace of mind?

Topics: Long term care, life insurance, Long term care insurance


Wendell W. Brock, MBA, ChFC

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