Long Term Care Commentary

LONG TERM CARE COMMENTARY

(1998) Here is something you won't hear about from Money Mag or just about anyplace else. When reviewing a proposal on long term care that someone had sent me- primarily because they were concerned about home health care- I noted that the policy provided coverage for $100.00 per day. But with caps for each person she may have needed. Say what? For example, they would only pay $25 per hour for a RN, LPN, chemotherapy specialist, etc. and anything over that the patient paid. You don't get RN's for $25 an hour out here- or most anywhere else. So if a nurse charged $50.00 an hour for two hours, the patient would still have to pay $50 out of pocket. Hardly great coverage and certainly not what the agent inferred (or even recognized for that matter). The only ethical way this policy could be sold would be to have agents tell prospective clients exactly what costs they would pay themselves since they unquestionably believe that they would actually be getting $100/day coverage. Never happen. It would stop sales if the truth be known. Just another reason why you never buy insurance from (just) an insurance agent. Let's be careful out there.

HOME HEALTH CARE: (1998) The costs for home health care have almost decimated the Medicare and Medicaid budgets. Studies have shown that the "more government spends on services people want instead of nursing home care which they dread, the more people come "out of the woodwork" to seek public assistance." So government spending actually goes up in an effort to help people stay out of nursing homes since the patients don't bother to buy long term care which inevitably arises. "Evaluations of community care programs...tend to show not only that expansion of community care has little effect on nursing home use, but that it raises, rather than lowers, total expenditures." (Caring for the Disabled Elderly: Who Will Pay?, The Brookings Institution) And, quite obviously, more Medicare expenditures causes more fraud (which already consumes 40% of Medicare's home care dollars).

Health Care Trends Report- "Expenditures for the home health benefit, the fastest growing component of Medicare, increased from $2.6 billion in 1989 to $16 billion in 1995, and are expected to increase to $31.3 billion by 2002. This constitutes 3% of total Medicare spending in 1989 and 10% in 1995.... Increased utilization appears to be the driving force behind Medicare home health spending growth. Between 1989 and 1994, the number of home health users per 1,000 beneficiaries increased from 50 to 97, or 94%, and the number of visits per user increased from 27 to 70, or 159%. In contrast, payments per visit increased by only 2%."

National Medical Expenditure Survey Research Findings- "The percentage of nursing home patients receiving Medicaid jumps to 78.6% for full-year residents, and falls to 53.1% and 57.9% for admissions and discharges respectively. In other words, the more expensive, long-term patients tend to be on Medicaid, whereas the cheaper, short-term patients pay privately or have Medicare coverage."

LONG TERM CARE: (American Health Planning Association) (1998) About 75% of LTC is given by family members, and...one-half of the patients so helped are bedbound or incontinent or both."

NURSING HOME MEDICATION: The government pays about $1,000 per year per nursing home patient for drugs. But a recent study says that up to 20% of nursing home patients are receiving inappropriate medications. The problem may not be the homes per se but the fact that pharmacists are having trouble getting a patient's full prescription records so they can determine if there will be a conflict with the various medications. They noted that inappropriate medicines can lead to falls, constipation, delirium, depression and incontinence.

LONG TERM CARE: 1998 Nursing home costs have risen 20% in the last 3 years to about $46,000 average nationally. Assisted living costs range from $20,000 to $48,000 annually (the location is the real reason for the difference.)

40% of adult children whose parents are still living expect to support them financially versus 22% in 1994.

LONG TERM CARE: Women tend to outlive their husbands and have a 13% chance of spending five years or more in a nursing home, compared with 4% for men.

But about half of women now age 65 will spend some time in a nursing home; for men, the likelihood is 33%. Most stays are short; only 24% of today's 65-year-olds who enter a nursing home will remain there for a year or longer. The number of long-term-care policies in effect has risen rapidly to more than 3.5 million.

LONG TERM CARE POLICY COSTS: 1998 To purchase a basic policy- $100/day, compounded annual 5% increase, etc., the projected annual premiums for an individual in excellent health would be as follows: age 40- $550; age 45- $610; age 50- $760; age 55- $860; age 60- $1,130; age 65- $1,570; age 70- $2,020; age 75- $3,300; and age 80- $3,600. The premium for ages 70, 75, and 80 are with simple inflation protection. All premiums reflect a spousal discount. The premiums illustrated may be higher or lower depending on the state of residence.

LONG TERM CARE FACILITIES:(New Lifestyles 1998) CCRCs (Continuing Care Retirement Communities), also known as Continuing/Life Care Centers usually provide a variety of independent living options along with full medical and nursing services. Most CCRCs are self-contained communities that offer all types of recreational activities and dining accommodations and many may include shopping and banking facilities, beautician and barber facilities and transportation services. CCRCs usually charge a partially refundable entrance fee as well as a monthly rate and can be quite expensive.

Retirement Homes are designed for those who are effectively totally independent and want to live in an active community with other seniors. While the conveniences may be similar to CCRC's, they generally do not include any nursing care services. Some, however, may offer "Assisted Living" which is assistance with medications, bathing, or dressing. Retirement communities can be either free standing facilities or affiliated with a complex also offering a range of nursing care services.

Residential Care Facilities (also known informally as personal care facilities or board and care facilities) are residential-type homes licensed to care for a relatively small number of residents who are able to care for themselves in a protected environment. These facilities provide their residents with basic needs such as room and board, laundry, cleaning, and perhaps assistance with the taking of medications, bathing, or dressing. Most will accept at least some residents who are non-ambulatory. Residential Care facilities are usually licensed by each state's Department of Human Services (Some retirement communities are also licensed as Residential Care facilities).

Intermediate Care Facilities (ICF) are for those who are not bed bound, and can move about the facility under their own initiative, even with a wheelchair. They may be incontinent and require intermittent nursing services.

Skilled Nursing Facilities or Nursing Centers are for patients who need 24-hour nursing supervision, many of whom are confined to bed for some portion of the day or who are incontinent. These facilities offer medical treatment under the supervision of licensed nurses, and at least one registered nurse must be on duty during the day. Nursing centers are licensed by the each state's Department of Health. Complete information regarding amenities, services, charges, and care options can be obtained by calling the admission coordinator at any listed facility.

GROUP LONG TERM CARE POLICIES: (New Lifestyles) About 1,000 companies are offering employees (and usually their spouses, parents and in-laws) group long-term-care policies as part of their cafeteria plan.

Premiums are almost always paid solely by employees, with no employer contribution. Coverage for active employees, and possibly spouses, may be guaranteed, but under some plans insurers apply underwriting standards to each employee and coverage is not a sure thing. If you have controlled hypertension, for example, you may be automatically rejected, even though you would qualify for an individual policy.

Actually, individual policies might be more obtainable, cheaper and have greater coverage. For example, an individual policy probably would cover for assisted care- not normally offered in a group policy.

NURSING HOME COSTS: (1998) In New York State, skilled nursing facilities currently charge over $188 per day on average or $69,000 per year or more. In the New York City Metropolitan Area, which includes the 5 boroughs of New York City, Long Island and Westchester County, the average skilled nursing facility charge is about $222 per day or about $81,000 per year. It is estimated that persons in nursing homes stay for 2-1/2 years on average.

Home health care is also expensive. In New York, three home health care visits per week by a registered nurse can cost over $12,950 per year. Even custodial home care at three visits a week can cost over $8,960 per year.

Medicare can cover for SKILLED home health care through services furnished by a home health agency under the following four conditions: (You do not need a prior hospital stay to qualify for home health care.)

The care includes intermittent skilled nursing care, physical therapy, or speech language pathology.

You are confined to your home.

You are under the care of a physician who determines you need home health care and sets up a plan for you to receive care at home.

The home health agency providing services participates in Medicare.

Once all four of these conditions are met, Medicare will pay for covered services as long as they are medically reasonable and necessary. Coverage is provided for the services of skilled nurses, home health aides, medical social workers and different kinds of therapists. The services may be provided either on a part-time or intermittent basis, not full-time.

Medicare pays the full cost of medically necessary home health visits by a Medicare-approved home health agency. The Medicare home health benefit also covers the full cost of some medical supplies, however, if you need durable medical equipment, you are responsible for a 20% coinsurance payment for the equipment.

Medicare will NOT pay for full-time nursing care at home, drugs, meals delivered to your home, and homemaker services that are primarily to assist you in meeting personal care or housekeeping needs.

This looks great- till you recognize that a tremendous amount of fraud has been noted here as home health companies have charged $$$$$ for minimal care.

LONG TERM CARE: (1998) Before you attempt to reduce your assets so you can get Medicaid long term care, consider these issues:

(1) You will probably lose your price, dignity and have an increased dependence on others

(2) An inability to purchase services not available under

Medicare or Medicaid;

(3) There is unquestionably a reluctance by nursing homes to admit Medicaid as opposed to the more lucrative "private pay" patients;

(4) Once the assets are transferred, they ARE the ownership of the donee and it may be difficult or impossible to get the money back when needed.

(5) Once you have limited assets, you will be denied entry to facilities that do not accept Medicaid patients.

LONG TERM CARE: 1998 This should be fairly representative of the costs of buying a long term care policy when you are younger. Assume care is not needed till age 80.

Age Daily Amount Annual Premium Total Premiums Paid to Age 80

50 $100 $1,032 $30,960

60 $160 $2,273 $41,460

70 $250 $7,560 $75,600

ELDER CARE ASSURANCE: (1998) Home Health Care and other community based services is unquestionably one area of long term care that the elderly are concerned about. Those saying they are extremely, very, or somewhat likely to use elder care assurance.

Home health care - 92%

Assisted living - 80%

General upkeep and care of home - 53%

Household finances - 14%

Peace of mind is the most important reason.

It is also obvious in the increased product offerings of long term care products. Studies have shown that:

In using professionals for assistance-

99% said the person must be reliable

98% indicated the person have integrity

97% requested they be compassionate

96% that the individual deliver a high quality service

82% that the person must be accredited.

SKILLED NURSING HOME CARE: (1998) "Medicare covers intravenous and tube feedings, injections of insulin, insertion of catheters, tracheostomy aspiration, training in self-injections and diet for diabetics, and rehabilitation services like speech, occupational, and physical therapy. Rehabilitation therapies are covered if they're required at least five days a week, if they're restorative, and not simply to maintain functioning, and if improvement continues.

Payment stops if there's no further improvement.

Many nursing homes have begun to turn themselves into facilities focusing almost exclusively on Medicare-covered services. Other nursing homes are marketing units for "subacute" care: special wings or floors that provide hospital-level care. Even hospitals are setting aside skilled-nursing wings as a way to continue receiving Medicare money once patients move out of acute-care beds. It's unclear if subacute units are marketing-inspired locations with care not much different from that in other parts of a nursing home.

Regardless, eventually, Medicare stops paying. Either qualifications for benefits are no longer met, or the 100 days run out. For many families, coverage ends sooner than they expect. On average, beneficiaries use about 57 days of skilled-nursing care in any calendar year. When benefits end, residents may have to move. If you can't swing the private pay rate the facility charges, or if the facility is not certified for Medicaid, the fallback government program, you'll have to uproot your loved one.

Before you place your relative, make sure you know the facility's certification status. About 11,000 facilities are certified for both Medicare and Medicaid, but some 1,100 homes are certified only for Medicare. If your relative needs continued nursing care, and Medicaid will at some point have to pay the bills, choose a facility that's certified for both."

LONG TERM CARE: (1998) Nursing home costs have risen 20% in the last three years to a national average of $46,000 (in New York City, it is $81,000!). In 1994, only 22% of adult children expected to have to support living parents. Now it is 40%. According to many industry experts, "long term care policies are drastically under priced and will require substantial rate increases in the future. If so, they could suffer the same fate as many disability income policies." What they are referring to is the fact that thousands of disability policies written on the "best" categories (doctors, attorneys, etc.) came under a crescendo of claims requiring the complete rewriting of the contracts and substantial cost increases coupled with severe restrictions in benefits. I have read nothing to indicate that the underwriting on the elderly is misplaced. Admittedly, due to better health, MORE people will need long term care (yes, you read right). But they will not need it until a later age. How that is being factored in, I don't know.

COSTS OF CARE

AVERAGE STATE DAILY NURSING HOME COSTS 1998 (Met Life)

AL 103 CT 202 ID 136 LA 90 MS 100 NJ 192 OR 142 TX 130 WI 166

AK 413 DE 129 IL 133 ME 175 MO 105 MN 144 PA 149 UT 115 WY 100

AZ 137 DC 184 IN 141 MD 151 MT 100 NY 178 RI 155 VT 100 AVG 140

AR 118 FL 120 IA 101 MA 201 NE 142 ND 100 SC 118 VA 115

CA 156 GA 102 KS 110 MI 127 NV 130 OH 151 SD 100 WA 177

CO 117 HI 127 KY 127 MN 133 NH 199 OK 92 TN 126 WV 125

Over a 2 1/2 year average stay, the cost would be $127,750.

LONG TERM CARE: (1999) (Health Care Financing Administration) Total expenditures for nursing home care are projected by the Health Care Financing Administration (HCFA) to grow 70% from 1998 to 2007 ($87 billion to $148 billion). However, Out-of-Pocket payments are projected to grow 87% ($25 billion to $47 billion). While Medicaid payments for nursing home care are projected to grow 55% during this period ($41 billion to $63 billion), payments from private health insurance are projected to grow the most: from $5 billion to $11 billion (127%).

Home health care will grow more in expenditures: 100% between 1998 and 2007 ($33 billion to $66 billion). Out-of-pocket payments for home health care will soar to 150% ($7 billion to $17 billion), while Medicare's costs, now the major payer, will grow only 70% ($14 billion to $23 billion). Payments from private health insurance are projected to grow 140% ($4 billion to $9 billion). Medicaid's costs for home care are projected to grow 140% also, from $5 billion to $12 billion.

Total national health care expenditures are projected to grow 86% ($1,146.8 billion to $2,133.3 billion) between 1998 and 2007.

LONG TERM CARE POLICIES: (1999) Health Insurance Association of America Average stated that "premiums for private long-term care insurance dropped approximately 5% between 1995 and 1996. The number of long-term care policies sold between 1995 and 1996 rose by more than 600,000 - the largest number of policies ever sold in one year. Additionally, in 1996, 10 of the 12 leading sellers of private long-term care insurance waived pre-existing condition limitations, so long as pertinent medical conditions were disclosed when a consumer applied for coverage."

Almost "5 million private long-term care insurance policies were sold as of December 31, 1996. While most sales were in the individual market, employer-sponsored long-term care insurance accounted for nearly 20 percent of all sales in 1996. The average annual premium for individual policies containing a $100 a day nursing home benefit/$50 a day home health care benefit, four years of coverage, and a 20-day elimination period (deductible) was $247 at age 40. At age 50, the premium for the same policy was $364; at age 65, $980; and at age 79, $3,907. The same policy with a 5% compounded inflation feature had an average annual premium of $589 at age 40, $802 at age 50, $1,829 at age 65, and $5,592 at age 79.

Meanwhile, the average annual cost of a nursing home stay is more than $40,000.

The cumulative number of policies sold in the employer-sponsored market has grown to 650,000 - an average annual growth rate of 47% since 1987. The number of employer-sponsored plans grew to 1,532 in 1996 from 1,260 in 1995. Nearly 52 % of all employers offering coverage were small businesses with 100 or fewer employees.

The top 10 states with the largest number of sales, in descending order, are Florida, California, Pennsylvania, Illinois, Texas, Ohio, Washington, Iowa, Missouri, and Michigan.

The states with the greatest percentage of market penetration (15% of the population or more, based upon the number of policies sold and the number of state residents aged 65 and older) are Iowa, Montana, Nebraska, North Dakota, South Dakota, and Washington."

MEDICAID, MEDICARE AND LONG-TERM NURSING-HOME CARE: (1999) An "estate planning" article talks about Medicaid planning and the ability to remove assets through a "business interest" so that a person can "effectively" utilize state funding for long-term care. What is noticeable to me is that the commentary is similar to what I read with the various tax shelters in the 1980s. They used to spend a LOT of print and attorney rationale justifying why their offering was- or should be- exempt from securities law. You could almost smell that this "estate planning" was essentially a convoluted rationale that was probably not going to pass muster later on either (though only time will tell). Anyway, there was extended commentary about transferring assets as an exchange for a business interest (not a transfer of assets) and the fact that "you can 'go into business with this promoted business venture without any substantial effort (doesn't that sound a little too convenient) on your part". As such, the firm "never recommends that you give assets away, they recommend an EXCHANGE of assets for a business interest. This exchange does NOT create an "ineligibility period" and their "non-transferable business interest" is NOT subject to a Medicaid spend-down." Therefore, Medicaid supposedly does not have the right to attach these assets for payment of long-term care. It has, apparently, also been supported by court cases-though I have not checked them out. Will it work? I don't know. Would I use or recommend it? Not a chance.

As for proper planning, assume you are healthy and want to pass on as much assets to your beneficiaries (most often your children) as possible at death. You could attempt this "business strategy" or some other type of transfer. But beyond the attempt to get assets beyond Medicaid is the fact that you better be absolutely sure you want to die in a Medicaid Ward with a bunch of other screaming Alzheimers patients. And if you do not know the difference between the level of care between Medicaid and Private Pay, you probably should be in a home to begin with. That's because the lack of the limited financial resources allowed for Medicaid patients may commit them to substandard care in substandard homes (though not always. This is NOT a diatribe against Medicaid per se since there are good homes and caregivers.) But look at the problems identified in the WSJ and NBC news. One of the major nursing homes in the South was "caught" turning away and OUT Medicaid patients because they were losing money on them. They stated that Medicaid paid $82 a day for care wherein the actual cost to the home was $95. Private pay patients were paying $125 per day. You should be able to see that the difference in payments between the two ($42/day) would almost undoubtedly make a difference in potential care. This scenario is not an isolated case- 125 nursing homes nationally pulled out of Medicaid in the last two years.

Also, don't expect Medicare to help. In fact, it is not now, nor has been, nor will be, designed to provide any long term care at all unless it is skilled care- which represents only about 0.5% of all patients. Some ill people have attempted to use home health care services as a substitute for long term care. Since the rules were rather ambiguous, a lot of home health care services jumped onto the money bandwagon, providing (at times) unnecessary and/or overly expensive services which subsequently drove both the Medicare and Medicaid home health care budgets through the roof. some of the elderly complain that as the rules are tightened, home services will be reduced and they will be left in the lurch. Partially true. But irrespective of personal feelings, the government cannot afford cradle to the grave coverage. Look at the trouble social security is in and that's due to our glorious politicians who "know how to budget and plan"- though kudos to Moynihan and his efforts for years.

So do your planning early and utilize the various policies that can provide adequate care when you are infirmed- assuming you can afford to do so. Don't buy a policy if you were going to go on Medicaid anyway since your income/finances were limited.

Currently there area about 1,385,000 nursing home patients- 771,668 are paid for by Medicaid.

MORE LONG TERM CARE: (1999) "Long-term care related issues cost employers $29 billion a year in lost time, lost employees, and lost productivity" per HIAA. The U.S. faces a looming crisis because long-term care is the largest unfunded liability facing Americans today and the single major catastrophic expense facing today's elderly and tomorrow's retirees. With annual nursing home costs averaging $41,000 today and increasing to about $100,000 in 1996 dollars by the year 2030, such expenses can indeed cause financial ruin."

So I ask, what are you doing about it- either for yourself or a parent? Don't sit idly by and hope that something won't go wrong, particularly if your genealogy indicates you might live till 80 or so (when most long term care is needed). By the same token, don't go out and buy the cheapest thing available or one from an agent or financial planner who took one course (if that) in the subject. These contracts are NOT easy to figure out. As an example of the problems, one MAJOR company offers a home health care option- I'll say a customer bought a $100/day coverage. So if a nurse came to the home and charged $50/hour for two hours, the patient would pay nothing, right? WRONG! The contract only pays to a maximum of $25/hour and therefore the patient has to come up with $50 out of pocket. Frankly, although the "caveat" is printed in the contract, I don't think 99 44/100% of the purchasers are even aware of it, that 100% had been told of it by the salesperson nor that the salespeople even knew about it. I think it is unethical- but ethics is not a primary focus in today's society. (The national general sales manager for the company did not even know it until I bought it to his attention. True statement.)

MORE LONG TERM CARE. (1999) Some of you might be aware that Congress opted to provide some tax "friendly" policies that allow you to take a deduction for the premiums (but only when they exceed- along with other medical costs- 7.5% of your AGI. Big joke- hardly happen for anyone- maybe 4% max) and the ability to get your LTC payments tax free. But there are some major caveats- primarily that the tax qualified polices require "substantial" human assistance in performing at least two ADL's for a period of 90 consecutive days and that the individual must be certified as "chronically ill" to access the policy. Well these are very stringent requirements that are certainly open to interpretation. In fact, a recent letter by Richard Green on the subject says that insurers may find this a financial boon because up to 40% of the policyholders will be denied coverage versus purchasing the standard taxable policy that does not have these restrictions. He comments that "if we could provide early custodial care for the weak or frail or for the person returning from the hospital, we might be able to prevent injuries that require hospitalization or nursing home stays for periods longer than 90 days."

Admittedly these plans are perhaps 5% to 10% cheaper than the taxable plans, but if you are never able to utilize them properly- or at all under certain conditions- then the cost is prohibitive. Sure, you won't have to pay tax on the $50,000 (or whatever) received for long term care, but if you never get even $5, what's the point??

LONG TERM CARE: (1999) Between 12% and 23% of persons would not be eligible for a long term care policy at age 65 due to underwritings restrictions on prior illness and disease. (USHHR)

NURSING HOMES: (1999) (HCFA)- Of those patients in a nursing home, 45% have Alzheimers, 13% other disorders and 10% have mental retardation. 47% of those over age 85 have Alzheimers; 19% between 75 and 84 and 3% for those age 65 to 74.

LONG TERM CARE: (1999) (Center for Long-Term Care Financing President Stephen Moses) -"less than ten percent of seniors have purchased long-term care insurance and virtually none of the baby boomers have done so. Upwards of 85 percent to 90 percent of all payments to nursing homes in the United States come from Medicaid, Medicare, Social Security income, other private patient income or other private sources--NOT PATIENTS' ASSETS. In other words, people who fail to plan ahead for long-term care expenses routinely end up in nursing homes paid for by Medicaid or in extended home care paid for by Medicare. With every benign intent, government policy has anesthetized the public to the risk of catastrophic long-term care expenses. Consequently, people fail to plan ahead for long-term care when they are young, healthy, and affluent enough to insure for the risk. By the time most people confront the risk of long-term care directly, they are either too old to afford private insurance coverage or too infirm to qualify for such protection. Most of them, including a tragically large proportion of America's beloved World-War-II generation, end up in nursing homes on welfare by default, because that is the only way that remains to protect their estates from private long-term care expenses. Efforts to target Medicaid only to the genuinely needy by closing loopholes, mandating estate recoveries, or criminalizing Medicaid estate planning have not succeeded, because these interventions have always been attempted too late, usually after the need for long-term care has already occurred."

LONG TERM CARE: (1999) According to ASHA, 62% of all publicly financed long term care costs are paid for by Medicaid, and 82% of that amount goes to nursing homes. Such spending cost the U.S. government $39.4 billion in 1997, $14.7 billion more than 12 years ago.

ADL's and IADL's: (1999) Activities of Daily Living (ADL's) include Bathing, eating , dressing, transferring, toileting, continence and feeding, among others. IADL's are the Instrumental ADL's and include managing medications, using the telephone, handling finances, performing housework, doing laundry, arranging for transportation and preparing meals. Per LIfe Insurance Selling, "IADL's measure more complex functions than ADL's, such as one's ability to cope with his environment or perform adaptive tasks. A person's need for assistance with IADL's maybe a predictor of future ADL dependency."

Assisted Living Facilities (1999)

Female 76%

Average Age 83.6

Male 24%

Average Age 81.8

Average number of ADLs 3.1

Cognitively impaired 49%

Hospitalized before moving into an ALF 42%

Average Income $26,138

Reasons for Discharge

Death 26%

Move to Nursing Home 39%

Move to Relative's house 4%

AF had a 95% median occupancy for 1997 and 1998. There has been a 3 year decline in semi private rooms form 13% in 1996 to 9% in 1998. 86% of ALF residents receive no final assistance form another source.

LONG TERM CARE (1999)

Table 1

AND NOW FOR SOMETHING COMPLETELY DIFFERENT: (1999) Here is a unique planning "opportunity" for those age 55 and up that have cash value life insurance and an estate over $625,000 and where no long term care planning had been done by husband/wife NOR their children (who will may bear an ultimate responsibility for later care of their parents.) First, one must remember that the insurance is INCLUDED in the estate and will be taxed at around 40%.

Take a look at a simplistic example. Assume a $1,000,000 policy with $400,000 cash. Upon death, about $135,000+ in estate taxes will have to be paid. Why not take out the $350,000 in cash over time to reduce the estate down to the lifetime exemption ($675,000 now growing to $1,000,000 by 2005.) If they gave $20,000 to their son and daughter in law, they have effectively given $28,000. The additional $8,000 is the 40% savings from a lowered estate. But the new couple does NOT take the $20,000 and spend it. They buy MORE insurance on the parents. Say what? What they buy is one of the unique policies that provide life insurance WITH LONG TERM CARE ACCESS. The face value might be $75,000 with a $125,000 value for long term care. If the parents never need it and die, the kids get the $75,000 and there is no estate tax since it is not in the parent's estate. But if the parents need long term care, then the MEC contract can provide nursing home and home health care for an extended period. This provides the children and parents with the ability to cover a financial burden AT A REDUCED COST. Equally important is it provides an emotional security for the children that is hard to value. Whatever you do- review your estate plan to lower taxes- review your long term care to reduce a financial and emotional burden.

LONG TERM CARE: (1999) According to the National Committee to Preserve Social Security and Medicare, about 88% of U.S. Nursing homes certified for Medicaid are "drastically short" of qualified medical personnel. Additionally, other studies show that residents in homes with more Medicaid patients are 30% more likely to experience health declines.

LONG TERM CARE: (1999) Two thirds of elderly nursing home patients rely on Medicaid at an expense of $24.2 billion in 1995. Long term care for those over age 65- in and out of nursing homes- approximates 20% of Medicaid's entire budget. Medicaid spending is surpassed only by the cost of public schooling. In 1997, there are about 30.3 million Americans between the age of 65- 84 and 4.0 million over the age of 85; by 2030 that will increase to 60.9 million and 6.5 million respectively. By 2050, there will be 60.6 million between 64 and 84 but the over age 85 will balloon to 18.2 million. And it is the oldest of the elderly that need the most care.

And the crisis is even more contentious today since some nursing homes are refusing Medicaid recipients because, since they are "for profit", Medicaid pays at least $27 per day less than private pay.

If you have assets, plan for long term care in your 50's. If you are a child of elderly parents, you may want to do some planning for them since the burden of care will invariably fall on you later on. This is particularly significant if they live a long distance from you.

LONG TERM CARE: (1999) The New England Journal of Medicine said in 1991 that about 43% of those people who turned age 65 in 1990 will enter a nursing home at some time during their life. 24% of the elderly over age 65 will need nursing home care for more than one year.

The same study reported that among all persons who live to age 65, only 1 in 3 will spend three months or more in a nursing home; about 1 in 4 will spend one year or more in a nursing home; and only about 1 in 11 will spend five years or more in a nursing home. In other words, 2 out of 3 people who turned 65 in 1990 will either never spend any time in a nursing home or will spend less than three months in one. The risk of needing nursing home care is greater for women than men; 13% of the women in this study, compared to 4% of the men, are projected to spent five or more years in a nursing home.

However the study does not address significant underlying problems. There are far more people that should get formal care but, due to both financial obstacles and emotional "obligations", many caregivers give care either beyond their own capacity to cope or may simply give inadequate care. About 75% of Alzheimers victims are cared for in the home. A long term care policy need not be prohibitively expensive and can cover care for many more than the 33% who do need care.

LONG TERM CARE: (Center for Long Term Care 1999) Nursing home care already averages $50,000 per year ($136 per day), up from $31,390 per year ($86 per day) in 1990. By 2030, all the boomers will be over age 65, and between four and five percent of them will already reside in nursing homes. Researchers predict that nine percent of people over the age of 65 will spend five years or more in a nursing home. The United States spent $82.8 billion on nursing home care in 1997, up from $30.7 billion in 1985, an increase of 270 percent. HCFA estimates nursing home costs will rise to $148.3 billion by 2007. Of the total spent in 1997, Medicaid paid 47.6 percent, practically unchanged from 47.2 percent in 1985. Medicare, however, paid 12.3 percent, up from 1.5 percent in 1985. Together, these two big public payers contributed 59.9 percent of the total cost of nursing home care in the United States in 1997, up from 48.7 percent in 1985. Out-of-pocket nursing home expenditures have fallen from 44.3 percent of the total in 1985 to 31.1 percent in 1997. Furthermore, a large proportion of these so-called out-of-pocket costs--possibly as much as two-fifths--are really just spend-through of Social Security income that people who are on Medicaid already must contribute toward their cost of care. (This explains why Medicaid pays for two-thirds of all nursing home patient days, but contributes only 48 percent toward the total cost of nursing home care.)

LONG TERM CARE POLICY COSTS: (1999) Here is something you won't makes sense of. $100 per day; 50% home health care, 5% compounded factor, lifetime benefit, 90 day elimination, best risk, one life

Company Age 65 Premium Age 75 Premium

Lincoln Benefit $1,575 3,803

CNA 1,823 4,042

GE Capital 1,678 3,866

John Hancock 1,850 4,190

Fortis 1,680 3,190

Travellers 2,400 5,690

What's my point? Obviously Lincoln Benefit looks the cheapest and the Travellers the most expensive. But while the various companies appear to cover for exactly the same limitations, there can be a vast difference between coverage that a price usually reflects. The costs of the policy are almost irrelevant since you need to figure out what is actually covered. For example, what is ambulating? Walking with a cane, walker or even personal assistance? Huge difference in coverage- yet not even remotely indicated at the surface via the price. These policies require extensive review. Better read these carefully. If you don't know the intricacies, hire someone that does. But it ain't your insurance agent.

HOME HEALTH CARE: (1999) 80 to 90 percent of home health visits are paid for via Medicare, the federal program that provides health insurance for the elderly and disabled. That's because most private insurance policies offer only limited home health benefits, and because very few seniors can afford to pay those expenses out of pocket.

Under the old reimbursement system, home health providers were paid per visit. But spiraling costs--and a number of high-profile fraud cases--prompted the Feds to cap the amount of Medicare money agencies can receive per patient and the balanced budget agreement of 1997 changed all that.

More than one-tenth of the country's 10,000 Medicare-certified home health agencies have closed since the Balanced Budget Act took effect, according to a recent story in Health Week magazine.

In 1994, 7.3 million Americans needed long-term care services. By next year, that number will rise to 9 million, and it will surge to as many as 24 million by 2060.

CONSUMERS MINIMUM STAFFING STANDARD FOR EVERY NURSING FACILITY:(National Citizens Coalition for Nursing Home Reform 1999)

1. A full time RN Director of Nursing

2. A full+ beds)

3. A full time time RN assistant Director of Nursing (in facilities or 100 RN Director of Inservice Education (in facilities or 100+ beds)

4. A RN nursing supervisor on duty at all times (24 hours per day, 7 days per week)

Direct Caregivers (RN, LPN, LVN, CNA)

Day 1:5 residents

Evening 1:10 residents

Night 1:15 residents

Licensed Nurses (RN, LPN, LVN)

Day 1: 15 residents

Evening 1:25 residents

Night 1:35 residents

"These requirements must be in place for all residents, regardless of payment source."

Staffing in a Nursing Home (National Citizens Coalition for Nursing Home Reform, 1995)".... on average, nursing home residents received very little direct care time: less than 1 hour per 8 hour shift and only 10 minutes from a Registered Nurse per 8 hour shift. In Medicare "skilled nursing facilities", on average, residents received 30 minutes of RN time per each 8 hour shift and less than 2 hours from LPN's, LVN's and NA's. LPN'S's, LVN's and NA's had little or no direct supervision by RN's. Actually the lack of RN participation in direct care was drastic because these numbers included the Director of Nursing, other administrative nurses and the Inservice or Staff Development Instructor, who are usually not providing direct care. "

"The National Committe to Preserve Social Security and Medicare study compared 1988 staffing data to an expert recommended minimum staffing standard. ONLY 5% OF US MEDICARE AND MEDICAID CERTIFIED NURSING HOMES MET THAT STANDARD. Over $4 billion additional expenditures for basic nursing care were needed in 1988 to meet just that proposed minimum standard."

LONG TERM CARE: (1999) An article in the SF Chronicle noted that "even though his mother was in a better home in Santa Rosa, but there were 12 to 16 residents for each care person. Nobody had the time to site with her and make sure she ate....." She was covered by Medicaid for the poor. Could she have gotten better care if covered by a private policy that her kids had bought in previous years? Quite possible.

But irrespective of that commentary was the issue that many individual should utilize various other options such as residential care facility- but that Medicaid won't pay for.

Per the Health and Human Services Agency's report- "Long term care in California traditionally has been biased toward institutional care using a medical model, largely in response to the public endorsement available for institutional care. This tendency can result in care that is both more restrictive and more expensive than necessary." Many states (35) have already used a Medicaid waiver to allow assisted living and residential care.

Many long term care operators have delayed many of these changes however suggesting that the "lower" level of care will seriously impact a patient. But it just hasn't happened. Oregon was instrumental in using the money for residential and assisted living and has had significant success. Of Oregonians over 65, 27 out of 1,000 are in nursing homes compared to 30 in California.

Everything stated, if you can afford private care, do so. You will have more feasibility not only as to the location of the facility but which type

ODDS, STATISTICS AND DISABILITIES: (1999) The chances of using your homeowners insurance are about 1 in 88. The odds of having a fire in your home is 1:1200. The odds of using your auto insurance at about 1 in 47. The chances of using your LTC insurance is about 2 in 5. One out of two women and one out of three men will spend some time in a nursing home. (Journal of the American Society of CLU, 1996) More than 12 million older Americans will require some form of long term care by 2020. (Health Insurance Association of America). 72% of residents in a nursing home are women 90% of nursing home residents are over the age of 65. 22% of the disabled population is under age 65. (Puget Sound Life Underwriters Journal 1996). Functionally disabled people between the ages of 18 and 64 represent 40% of Americans needing long term care services. (Life Insurance Selling 1995)

The likelihood of needing LTC (obviously) increases with age. In 1991, 29.2% if those age 45- 64 had a disability; 44.6% between 65 and 74 had a disability; 63.7% between the ages of 75 to 84. 15.3% and 41.5% respectively had a severe disability. (Employee Benefit Research Institute, 1995) 80% of disabled persons are cared for at home or in adult day care centers. 72% of caregivers are family or friends. (Puget Sound Underwriters Journal). The cost of home care can run from $4.25 to over $200 daily depending on the level of skill needed (SF Chronicle, 1995). Caring for each Alzheimers patient will cost more than $213,000- on top of other medical expenses- over the remaining five years of their lives. (American Journal of Public Health, 1994). Over 99% of nursing home care is either custodial or intermediate care, not skilled care, and is not covered by Medicare or Medicare supplements (Journal of the American Society of CLU's, 1996). The reason you see statistics showing Medicare covering for 5% of costs is that skilled care is so much more expensive.

LONG TERM CARE: (1999) People without Long Term Care policies will pay for custodial care themselves. Agencies charge $15+ per hour for the minimal level of custodial care. Skilled care can run as high as $200 an hour (Business Week, 1996)

HOME HEALTH CARE: (1999) 5.6 million seniors receive home health care - five times as many as are in nursing homes. Home care can cost as much as a private facility. Total costs for full time, live in health care averages about $50,000 annually (Business Week, 1996)

Long Term Care: 1999 (AM Best) I think that my previous comments about the "newness" of the industry and the inherent problems are properly and concisely identified by this statement from Best's review of LTC companies, "Given that very few actuaries have expertise and/or experience with this product and that few companies have long-term experience writing it......" Additionally, companies "were asked to estimate the number of actuaries in the field that they consider to be experts in long-term care. Their estimates ranged from as few as three to as many as 400, with most placing the number at less than 50."

Regardless, the risk of need- particularly for the aging baby boomers- has been clearly identified. A recent study by the U.S. Department of Health indicates that people who have reached age 65 face at least a 40% risk of entering a nursing home. Some of the public have purchased private policies and sales have increased dramatically over the last four years by 20%. Yet Best indicates that only 10% of the targeted market has purchased a policy- other statistics indicate about 6%.

Part of the problem is the fact that the public is woefully uneducated about long term care and, as recent as two years ago, 48% in a survey believed that Medicare would cover for long term care. It offers essentially zero days and zero costs (there is some coverage but it is only for skilled care which addresses only 0.5% of all people in a nursing home). The report noted, "It is safe to say most Americans believe that Medicare will pay for part or all of their long-term-care needs." From my perspective, it provides a view of the sorry state not only of U.S. citizen preparedness for future problems, but of their laziness and unwillingness to do even a modicum of research (and it applies to other areas as well.) One would at the very least go to a library upon approaching retirement and seek out literature to review health care for the next 20+ years of their lifetime. A librarian would also assuredly suggest the local Area Agency on Aging (and there is one in almost every metropolitan county) where they could get innumerable brochures on Medicare, Medicaid, etc., etc. They'd also be able to talk to staff personnel that might set them in the right direction.

Ignorance of a subject means that you don't know, but will do what is necessary in an attempt to find out. Being stupid means that you don't know and don't want to find out. Admittedly a pundit might say that "they think they know, so they are not stupid". Unacceptable. Accepting miscellaneous commentary and numbers about retirement from their neighbor at a cocktail party on which they will rely upon for the next 20+ years is ludicrous. (I know my comments are hard and not a very acceptable phrasing of something that has to do with the elderly. But what if your mother bought something where she subsequently lost $10,000 of premium and ended up in a Medicaid ward? Forcing them in the right direction when healthy is a much better alternative.)

As for those people who think that the government will have to step in and offer coverage for long term care- not a chance. Congress recently eliminated any chance to pay for the prescriptions of the elderly and this exposure for LTC is even greater. Best notes that, "based on the overall economic strain produced by the Medicare program, an entitlement program for long-term care would be difficult—if not impossible—to fund and manage through state and/or federal programs. Most the federal government has no choice but to support private-sector solutions to long-term-care risk. Because of these factors, some companies believe that the government must support private-sector involvement and that insurance companies are best equipped to take on this type of risk." I concur though submit they have to do a better job of informing and involving the public as well as training the agents.

Best notes, "Three-quarters of the companies surveyed said they sponsored multiple seminars, classes and other methods of formal training. In most cases, companies supplement their training with manuals that outline the company’s long-term-care products and offer needs-analysis tools, sales strategies and company procedures. One-quarter of the survey population said the training is supported by CD-ROM and videotape instructions. Other educational outlets included 800 numbers for agent support and Internet availability." As long time readers know, I teach LTC as mandated by California and have, obviously, had the chance to see the training offered by such companies. They DO provide some insight that the public needs, but they do NOT provide the limitations of coverage nor the differences in companies and many other critical and objective analyses. Recognize that while some info is good, the whole intent is to SELL a product (even when needed) and some objectivity has a tendency of being universally lost. Further, a lot of objective material won't be offered since even if they did so, such detractive commentary of other companies would look like sour grapes. (Have you even heard of a company telling potential consumers that they shouldn't buy a cheaper policy? Nope-even though the "what you see is what you get" issue is extensive with LTC). The issue is many times worse in others states that have no mandatory education at all. It is truly "caveat emptor".

Anyway, the suggestions for future government actions included additional tax incentives, increased education and much stronger messages from the government. For example, the public must receive information as to the limits of Medicare as it pertains to long-term care. "Companies, however, do not believe the government is going to advertise the long-term-care limitations set forth in the Medicare program. Therefore, the companies believe it is the responsibility of the insurance industry to educate the public. While the education process is taking place today, it is, for the most part, being completed through one-on-one sales presentations. This may not be enough to educate the public as to the realities of growing old in America." I think that, short of Oprah Winfrey or Rosie O'Donnell presenting such info on their shows, I see little improvement in the future.

The other issue mentioned covers tax incentives. Under current law, only tax qualified policies "escape" taxation of premiums (but not without risk of their own). I submit that a long term care should be taxed similar to a disability policy- no tax deduction on premium payments but also no taxation on receipt of "benefits". The study itself noted as regards "non-qualified plans, 15% of the companies surveyed said they believed the benefits of nonqualified plans would be taxed. One-third did not believe the benefits would have any tax consequences, and the rest believed a decision was at least five years away."

Here is another specific point which I have referenced in the past- use only those companies that have a supported track record in the business. "The first long-term-care products arrived in the market within the past 30 years. In comparison, life insurance carriers have about 200 years of experience by which to produce mortality tables and support rate structures." The point being is this- there are a few companies out of the approximately 120 nationally that have underwritten LTC policies for a least 20+ years. If you would not use a life company that had been in business for only 5 or 10 years, whey would you use a LTC company that has underwritten policies for only 5 or 10 years. From Best- "The experience of underwriters in the study group ranged from just a few years to more than 25 years underwriting long-term-care insurance. The backgrounds of underwriters are just as varied, drawing from the fields of life insurance, individual medical, disability, group medical, nursing and long-term care. Most came from the medical insurance field." Regardless, "little data exists to support pricing assumptions of current products, and few actuaries have proven expertise in the long-term-care market." Since there may be less than 50 proven experienced underwriters (I will assume that these are employed by the big firms that started the initial underwriting years ago- though I have no data directly supporting that.), large companies may have a greater ability at pricing a product that will stand the test of time. Yet Best noted,"There is an insufficient amount of reliable claims-payment data available to indicate what claim exposure may be in 20 to 30 years."

In that regard, here is a definite risk factor from Best- "many of the top-10 writers of long-term care are losing money in this business on a statutory accounting basis. In addition, many of the smaller players have little or no access to additional capital and could experience financial distress if they have not priced their products properly."

I will never guarantee that these larger companies will not default or deny claims, but purchasers would be well advised to review this list since wholesale denials of valid claims would destroy literally all other branches of their business. I still want a larger company that has adequate reserves and underwriting experience to make professional adjustments when necessary. That said, there are some companies on this list that are there only because of size and marketing. They do NOT have many years of experience and I would NOT use them.

And....."Until measurable claims experience can be ascertained on the policies in force, the ultimate profitability of this business will remain uncertain. Many of the carriers with smaller blocks of long-term-care business as well as less successful companies will exit the market." Some companies are entering the market not only because of the perceived revenue, but also due to the fact that many of their basic businesses of insurance have matured and extensive growth in the future is not anticipated. "Many recent entrants into the long-term-care market were prompted to venture into new product lines because of regulatory or competitive changes in the market for their primary products.For some companies—such as those with experience in estate planning or senior health insurance products—entering this market is a natural progression. For others, however, the entry into this less-seasoned and capital-intensive product line could become an expensive learning experience." Hence my repeated commentary about the use of only the major players.

"The average annual premium of the in-force business was between $1,250 and $1,500 for most companies, despite the wide deviation in assumptions used in their forecasting models. This may indicate that companies are pricing to the market and not to the risk. It also is possible that this dollar amount represents a saturation level for today’s consumer."

What is missing is the fact that due to the odds of needing long term care is so high- far greater than a house burning down or being in an auto accident- the premium has to be high in order to provide coverage. Additionally, from a previous study, underwritings statistics for nursing home care might be reasonably defined. But the use of home health care is "iffy" at best and may expose some companies to extensive financial exposure. This is an option that the public will pay for- assuming they have enough income- since people want to stay in their home for as long as possible. And that's fine as long as you know the limitations- that once you are impacted by the ADL's, it may be just a short time till you go into a home absent a strong home assistance by your spouse, relatives and other community involvement (which almost always will focus on a woman caregiver).

As regards acceptance by a company- you also have to know which companies accept which risks. One major player requires you to state "have you EVER had........", while another asks if you have ever had WITHIN THE LAST TEN YEARS". Huge difference. If an agent has you submit the wrong policy (many sell only one company), you are effectively preordained to be DENIED. Then no one else may approve you and you lost big time. Best found that "the average approval rate for the whole study group was 70% and the average decline rate was 20%. The highest approval rate reported was 88%, compared with a low of 20% for another carrier. The decline rate ranged from a low of 3% to a high of 80%." All of these differences signify the various underwriting philosophies used in today’s market.

And even when a policy is accepted, people lapse (terminate) a policy for various reasons (some due to huge premium increases caused by poor underwriting and very low initial premiums in order to buy business). Again from Best-"most of the lapse rates used ranged from 4% to 25% in year one, depending on the age at which the policy was issued and the policy duration."

How about State insurance department knowledge? Of those surveyed-"Nearly three-fourths of the companies said they believed the state insurance department’s knowledge base was well below that of the carriers. Only 15% of the respondents believed the departments had a strong knowledge base, and only Florida was mentioned by name as having long-term-care expertise." Having seen the overall ability in California, I submit that the industry remains "caveat emptor."

"A.M. Best views this growing market cautiously." Obviously, so do I. If you buy LTC, get somebody that has an interest and experience in field. That is not a fee only planner. That is not an attorney. That is not a CPA. They are almost universally not licensed in insurance. As such they rarely get the material from enough (any?) companies to review and have undoubtedly never seen the material from Best. But since most people use advisors they "trust" without requiring true competency, I do not see substantial improvement for the consumer in either short nor long term.

LONG TERM CARE POLICY COSTS: (1999) Here is something you won't makes sense of. $100 per day; 50% home health care, 5% compounded factor, lifetime benefit, 90 day elimination, best risk, one life

Company Age 65 Premium Age 75 Premium

Lincoln Benefit $1,575 3,803

CNA 1,823 4,042

GE Capital 1,678 3,866

John Hancock 1,850 4,190

Fortis 1,680 3,190

Travellers 2,400 5,690

NURSES AIDES: From a 1999 article about a nursing home shutdown. A "nurses aide" who had been working for the home for eight years still was paid only $8 per hour. You simply can't get the best of help at $8 per hour.

More than one-tenth of the country's 10,000 Medicare-certified home health agencies have closed since the Balanced Budget Act took effect, according to a recent story in Health Week magazine.

In 1994, 7.3 million Americans needed long-term care services. By next year, that number will rise to 9 million, and it will surge to as many as 24 million by 2060.

CONSUMERS MINIMUM STAFFING STANDARD FOR EVERY NURSING FACILITY:(National Citizens Coalition for Nursing Home Reform 1999)

1. A full time RN Director of Nursing

2. A full+ beds)

3. A full time time RN assistant Director of Nursing (in facilities or 100 RN Director of Inservice Education (in facilities or 100+ beds)

4. A RN nursing supervisor on duty at all times (24 hours per day, 7 days per week)

Direct Caregivers (RN, LPN, LVN, CNA)

Day 1:5 residents

Evening 1:10 residents

Night 1:15 residents

Licensed Nurses (RN, LPN, LVN)

Day 1: 15 residents

Evening 1:25 residents

Night 1:35 residents

"These requirements must be in place for all residents, regardless of payment source."

But irrespective of that commentary was the issue that many individual should utilize various other options such as residential care facility- but that Medicaid won't pay for.

Everything stated, if you can afford private care, do so. You will have more feasibility not only as to the location of the facility but which type.

LONG TERM CARE: (1999) "What motivates seniors to resolve long-term care problems?

Avoid Dependence...............25%

Protect Assets....................23%

Protect Living Standard........15%

Guarantee Long-Term Care...12%"

This was an ad regarding long term care- but not for insurance. It was called "The Medicaid Annuity Solution." The Executive Vice President of Western World Annuity shows how hundreds of thousands of dollars can be sheltered from Medicaid's spend down rules through the purchase of an annuity. They describe how annuity income, which usually is contributed to the Medicaid recipient's cost of care, can be made "unavailable" if paid to the at-home spouse under certain conditions. The ad went on-"Good planning can help seniors preserve assets--for the at-home spouse or even heirs--and at the same time qualify for Medicaid help for long-term care costs." Western World Annuity's average agent specializing in the Medicaid annuity market writes $2 million a year of annuity premium.

Do I agree with the use of such annuities to get Medicaid? No. If you have money, buy insurance. Remember, Medicaid will NOT provide home assistance at all- or certainly with any regularity. Further, the emotional strife of caring for a sick person is enormous- more so with Alzheimers/senile dementia. Lastly, if you know what happened with Vencor nursing homes, the issue of using Medicaid is so entirely remote as to be ludicrous.

If you have money, don't die in a Medicaid ward with a bunch of other screaming Alzheimers patients. Buy long term care insurance. It not only covers at least some of the financial burden, but a good deal of the guilt and emotional burdens that all caregivers face.

1997 analysis of California LTC companies

Company Actual Earned Premium Actual Incurred Claims Actual Loss Incurred to Premium Earned % Anticipated Loss Incurred to Premium Earned % Number of Lives Covered

AIG 116,537 23,000 19.7 21.2 291

Allianz 42,387,732 6,591,953 15.6 21.9 18,448

Bankers 1,564,474,541 519,288,909 33.2 38.7 161,917

Conseco 1,654,889,082 797,278,743 48.2 46.3 265,857

CNA 1,418,046,068 407,089,149 28.7 29.9 236,554

Fortis 237,598,917 59,744,468 25.1 17.4 62,898

GE 1,882,628,731 420,399,034 22.3 20.1 312,785

John Alden 59,286,214 59,286,215 12.0 19.0 12,591

John Hancock 931,236,717 931,236,717 18.3 22.4 242,703

MEDICO 181,431,654 99,253,256 54.7 48.7 9,259

Penn Treaty 226,294,993 94,007,257 41.5 36.7 33,612

PFL 366,489,172 98,786,046 27.0 22.1 69,118

Pioneer 440,036,357 232,288,950 52.8 52.8 29,597

TransAmerica 73,089,622 17,609,455 24.1 12.7 21,814

Travelers 563,990,539 91,683,516 16.3 23.8 105,047

UNUM 391,220,778 196,324,969 50.2 46.1 29,807

LONG TERM CARE: (2000) "The GAO surveyed government inspection reports from July 1995 to October 1998 for the nation's 17,000 nursing homes that receive federal Medicare and Medicaid money. More than a quarter of nursing homes have health and safety violations that harm residents or place them at risk of death or serious injury. Among the most frequent violations: inadequate attention by staff to prevent residents from developing bedsores and lack of supervision or special equipment such as alarms to prevent accidents."

LONG TERM CARE AND MEDICARE CHANGES: (2000) How have nursing home (and managed health care) facilities been impacted by the recent changes in Medicare payments. (Reuters) "A major heathcare group had a huge loss in fourth quarter of 1998 and was cutting 10,000 jobs, freezing wages, selling assets and trimming debt. The company operated 614 long-term care facilities. It indicated that Medicare had cut payments for an array of services for each patient to $319 a day, from more than $500 a day before the new Medicare payment system was phased in and was cutting payments by 60 percent for occupational, speech and physical therapy. In mid 1999, Vencor, a publicly traded health care firm, filed bankruptcy for the same reasons. (Private companies may/are not as seriously impacted since they are not carrying as much debt.)

Nonetheless, how would you feel if your loved one in a nursing home was being covered by Medicare/Medicaid? Think the quality of care will be the best????? Did you do a financial statement on the nursing home/company???

Long Term Care is NOT a required fundamental for Certified Financial Planners during coursework nor required thereafter. (In California, life agents are required to have 8 hours of continuing education in long term care and I feel that this "minimum" level of study is necessary for competent analysis of needs or a policy.) If you do not have such capability/knowledge, you cannot effectively do risk management, retirement or estate planning since a mandatory area is not covered. And if a planner does not have such competency, then the planner's ability to do all the other "types" of planning is highly suspect.

Long term policy possible rate increases (not verified 2000)

Aid Association of Lutherans

American Heritage Life Insurance Company

American Insurance Company of Texas

American Integrity Insurance Company

American Republic Insurance Company

American Travellers Life Insurance Company

ATL Life Insurance Company

Atlantic American Life Insurance Company

Bankers Fidelity Life Insurance Company

Bankers Life & Casualty Company

Central States Health & Life Company of Omaha

Colonial Insurance Company

Commonwealth Life Insurance Company

Continental Casualty Company (CNA)

Conseco Senior Health Insurance Company

Fortis Insurance Company (LTC Division sold to John Hancock)

Great Fidelity Life Insurance Company

Great Republic Life Insurance Company (California)

Great Republic Life Insurance Company (Washington)

Guarantee Trust Life Insurance Company

J. C. Penney Life

Lamar Life Insurance Company

Life & Health Insurance Company of America

Medico Life Insurance Company

Mutual of Omaha

Mutual Protective Insurance Company

National Financial Insurance Company

National States Insurance Company

Network America Life Insurance Company

New Era Life Insurance Company

Old American Insurance Company

Old Southern Life Insurance Company

Pekin Life Insurance Company

Penn Treaty Life Insurance Company

Pioneer Life Insurance Company

Resource Life Insurance Company

Sentry Insurance Company

Standard Life and Accident Insurance Company

Transport Life Insurance Company

Union Bankers Insurance Company

Union Fidelity Life Insurance Company

United Founders Life (now Glenbrook Life)

Universe Life Insurance Company

USAA Life Insurance Company

Remember, until most recently, all policies allow increases if they change the rates for an entire class within a state. Some policies are now guaranteeing rates but the premiums are higher. You still need to use just the five or so top companies. The others simply don't have enough experience in underwriting. That's why a lot of them have "bought business" by lowballing rates and then having to raise them later.

LONG TERM CARE: (2000) A Federal investigation of California's 1,400 nursing homes found that almost 1/3 were cited for causing death or serious harm as shown by death certificates. An article in the SF Chronicle and one attorney noting, "we'd like to think of all of these places should be heaven on earth, but all (residents) cannot have minute by minute, all the clock care unless the state is going to spend $100,000 per year per patient."

So what do you do if you do not have money to pay for the best of service? Pray. And hope that someone visits you often since that induces better care. That's about it. Outside of that, you are left to the financial constraints of Medicaid. If you have money and do not buy a policy so you can pass the assets to other beneficiaries and then end up dying in a Medicaid home under the above conditions: Don't Complain. You got what you wanted.

Also, "Workers are human. They make mistakes. Studies have shown that the bulk of elder abuse goes on in people's homes, not in nursing facilities".

Part of that abuse is due to the extreme emotional issue of caring for another. Again, if you do not have any money, count yourself lucky if a loved one can and is willing to take care of you properly. The problem is for many who do have money and who do not buy insurance- there is a great tendency to try to provide care beyond both the physical and emotional capabilities. This can easily lead to abuse. Such people that have purchased insurance are inclined to use it- hence better overall care and far less abuse.

LONG TERM CARE: (2000) "Most seniors have difficulty maintaining their policies until they reach age 80, when they most probably will need them. The National Association of Insurance Commissioners reports that 16% of all nursing home insurance buyers drop their coverage each year because they can no longer afford it. Insurance companies know that of those who buy coverage at age sixty, 95% will have canceled the coverage by age 80. The U.S. General Accounting Office confirmed those figures. Of insurance company files that were investigated and excluding those who had died, 60% or more of the original policyholders allowed their policies to lapse within 10 years and one insurance company reported a lapse rate approaching 90%."

But don't unilaterally blame the insurance companies. Many seniors are still healthy at ages of 70 and 75 and "forget" the fact that the potential ill health is still ahead of them. That's neither the agent's nor company's fault that they refuse to recognize the future problem. Certainly the (legitimate) company and agent will try to counsel them about retention, but they may surrender it anyway. That said, many agents may oversell a policy- meaning that the owners really could not afford all the bells and whistles they were sold. So as time goes on and money seems a little tight, it may seem prudent to drop something that may not need. Lastly, some companies did raise rates unconscionably (guaranteed renewable) and they became very unaffordable.

More statistics- According to a Congressional study, "57% of all those who enter a nursing home were not hospitalized before their admittance." 47% of all nursing home residents have chronic illnesses.

MORE LONG TERM CARE: (2000) ( Dr. Robert L. Kane, director of the Center on Aging at the University of Minnesota): "Private pay allows a person to buy more or better care, except in a few states that require services and costs to be identical whether payment is from a public or private source. Furthermore, private reimbursement may allow greater flexibility and choice. Private funds can be used to purchase a wider variety of services under more creative arrangements, while public funds cover only a limited set of authorized services. Much of the innovation in LTC has occurred in the private sector, such as assisted living and continuing care retirement communities. Beyond asset protection, the other reasons for considering private LTC insurance all relate to the quality of the package offered by Medicaid. In effect, the less attractive the Medicaid package, the more enticing private LTC insurance becomes"

TAX QUALIFIED VERSUS NON TAX QUALIFIED LONG TERM CARE POLICIES: (Tom Orr) In a newsletter addressing tax qualified policies, it is indicated that an independent tax advisor would be required to review the difference between the standard and tax qualified policies. He notes, "why in the hell would I refer clients to an individual who is not mandated to take up to eighteen hours of LTC-CTQ/CPR continuing education/certification and which I can "safely" say that 95% of them know Jack Squat about LTC insurance."

And more- when looking at tax qualified versus non tax qualified long term care policies, keep in mind the restriction for the 90 day "exemption" for coverage by the TQ policies. And then note this- "According to "Health Care Financing News,"Summer 1993, 77 percent of all nursing home cases and 83% of Medicare home health care cases last for less than 90 days." Additionally, "If TQ plans existed in 1995, 86 percent of Medicare's patients age 65 and older would have received no benefits from their plans because their recovery care lasted less than 90 days (e.g., 94 percent of 1,242,664 Medicare patients in skilled nursing facilities, plus 83 percent of 3,182,000 Medicare home health care patients ages 65 and over).

Now that's not as explicit as it appears. Short term skilled coverage IS covered by Medicare- but only about 0.5% of all people go into a home for skilled care. The issues of the short term stay is whether you have opted for the 0, 20, 30, 60 or 90+ day elimination periods. The longer the elimination, the less costly the premium. But if nursing home costs are roughly $4,000 a month now, at 5%, it will run over $10,500 in 20 years.

LONG TERM CARE AND MEDICAID: (2000) Among Americans aged sixty-five and over, only 12% are below the official poverty line-and fewer than 7% receive means-tested cash assistance under the SSI program. But over half of seniors get a Medicaid subsidy from the day they enter a nursing home. [Actually, 78 percent of people are already eligible for Medicaid when they enter a nursing home. Source: CLTCF]

LONG TERM CARE: (2000) A journalist asked this question- Q. Very few Boomers have bought into long-term care as a legitimate expenditure in their financial planning. To what extent are they missing the boat, vs. being (perhaps) appropriately leery of an insurance industry that has sold them a lot of unnecessary permanent life insurance and annuities? Also, please elaborate on the point you made on your website concerning the long-term care burden on women for "their" men.

My answer- "In order to put the answer into proper perspective, recognize that California (the only state that I am aware of) requires 8 hours of continuing education in long term care every two years for every agent involved with such policies. And I have taught the course for almost 4 years and have written extensively on the subject. That said, the amount of solid information available to consumers nationally is abysmal. Even when available, the public doesn't bother to read it anyway. For example, as recently as two years ago, 48% of the elderly believed that Medicare would cover for long term care. (A John Hancock survey just a couple years ago had 73% believing that Medicare would cover for LTC.) While it does cover for approximately 6% of long term care costs nationally, it is ONLY for those under skilled care services- and that approximates only about 0.5% of all the elderly needing long term care. In essence therefore, Medicare covers nothing. What about Medicaid? Yes- but once again the elderly either believe both they have a right to it and that it provides adequate care. In the first place, Medicaid is primarily for those who become financially indigent. It is not designed nor has ever been intended for use by people who have assets (roughly $100,000+) nor certainly for the middle income consumer. Secondly, Medicaid has extremely limited resources (both Medicare and Medicaid are going bankrupt sometime in the near future) and provide payments to nursing homes at far less than private pay. You are "at risk" for substandard care irrespective of what laws may be applied. Think of it this way. You could pay privately for help in a facility of your own choosing where the staff gets $13 an hour. Or you can opt for a Medicaid facility where they can only afford $8 an hour. And, invariably, there will be less staff anyway.

So what does the insurance industry do? In the more professional sense(?), it promotes products that can properly help an individual with that need- assuming the product is sold correctly. In the second issue, other companies provide and promote other products that "help" consumers escape the financial limits of Medicaid so that one can get (the inadequate) state care.

As regards the companies and policies per se, the consumer is thwarted from purchasing the best product for acceptable care because- even irrespective of California's intent- agents are woefully undertrained in the area. It is not simply a review of statistics as to why long term care is needed- education must also identify the companies that can effectively offer the product AS WELL AS a review of the contractual elements. For example, there are about 120+ companies offering products. About 10 control about 80%+ of the market. In one sense- "as well they should." The companies that have underwritten policies for 25 years+ are the odds on favorite for a sale since the experience in this new area is absolutely valid. But agents- sometimes captive- see a bunch of commissions forthcoming and are simply apt to sell anything for whatever reason- be it on price, perceived coverage, etc. The result- stuff like American Travelers. It was recently identified as a company that repeatedly raised rates (guaranteed renewable) in some states to the point that many purchasers had to drop coverage. The reason- the product had been priced "competitively" (far too low) to induce business. Another contractual provision actually limited coverage by the company to about 50% of the home health care aspects that purchasers thought they had purchased. Other companies have standards accepting only the most healthy- others have more flexible standards. Which one do you purchase and when? Add in the new tax qualified policies and the requirements for due care become all the more necessary. Yet, who reviews such policies independently and provides objective advice to consumers- or even to agents. Nobody. Certainly not the brokerage companies that go after agents with inducements of extra commissions, free trips, cars, etc. As a result, consumers end up being sold something that may or may not work. Even when good policies are sold, the wrong coverage may still be utilized. For example, home health care is a sought after rider (though expensive). But unless you happen to have a large support group in the community, you will (probably) end up in a nursing home in a short period since home health care is only provided on an intermittent basis. It is not intended to be a substitute for 24 hour care and unless there are other people to help, it won't work. So consumers really won't get to use effectively what was purchased and paid for for perhaps 20+ years. Is it therefore being sold in many cases to the wrong people. Yes. But is the criteria being mentioned anyplace? Certainly not in education training. In other words, as in life insurance, there is a need.. A definite need. But the bulk of the effort is to induce sales that may only be 50% to 70% correct- and even that might be by luck, not skill.

In the alternative to LTC products is the highly publicized and quite effective use of annuities to bypass the financial restrictions to Medicaid. Thousands of national seminars tout the ability of an annuity to get around Medicaid regulations. But they never tell attendees of the large commissions that are being generated, how the annuity restricts almost all access to money when it is most needed (retirement and poor health) and the fact that care in a Medicaid facility is clearly suspect. Even Elder Care attorneys have heavily promoted the use of special trusts and court filings in order to utilize Medicaid. This is not to say some intervention may not be needed in certain circumstances. But a unilateral focus to transfer assets so that one gets care under Medicaid borders of a breach of a fiduciary obligation to a client. What's the breach? Taking Mom or Dad to a Medicaid facility and tell them this is how and where they are going to die. Once Mom or Dad saw that, they'd almost universally opt for paying for private care.

Per your request is my continued focus on the emotional and physical state of caregivers- universally women. Women simply are the people who provide the care for others- first their children and lastly for their husbands and their own parents. Most do not plan for such later contingencies and may become martyrs. Their own health becomes secondary to their life. Once their husband/parents die, they may be in need of care themselves. In the alternative, a good long term care policy for a spouse, parents and themselves can provide not only physical care when needed, but an emotional well being that is immeasurable.

And I'll add commentary to statistics. You don't take a LTC budget and break it up equally between men and women. That's because women will live in a long term care facility whereas men usually get better or die. Therefore one picks 4 years+ for the woman and "just" a 2.5 year coverage for a man (unless there are other health or longevity issues). I think that one of the reason men die so "quickly" in a facility is that the wife has taken care of the husband far into an illness and will send them to a home only when the problem is almost terminal. (About 75% of all people who need care are cared for at home.) Women, on the other hand, don't have anyone left to care for them and have to enter a facility sooner. But then they "live" in the facility for a long time."

ADL: (2000) By 2030, the number of Americans age 85 or older- NEARLY HALF OF WHOM WILL NEED ASSISTANCE WITH DAILY ACTIVITIES- will be 8.4 million- up from the current 4 million.

Nationwide, caregiving families spend 2 billion dollars of their OWN money PER MONTH to provide care for family members. (Either there are a lot of caregivers or just one family is sending out someone in style.)

How to Pay for Long Term Care (Walter M. Cadette 2000) An excellent article that addresses potential changes in Medicare, Medicaid, use of tax credits, costs, subsidies, long term care insurance and more. One of the best concise articles addressing the dilemma of the elderly. Really a nice job

White Paper by the National Association of Elder Care Attorneys for changes in long term care. (2000) They are suggesting a new Medicare D with higher payroll taxes. I just do not believe another government bureaucracy is the right approach but you can read for yourself.

Experts think that only about 10- 20% of the elderly could afford a long term care policy (others say about 33%). A Gallup poll in 1993 indicated that 73% of respondents thought Medicare covered for long term care. Maybe the insight is better now, but I believe the poll would still show over 50%- perhaps over 60% have not done adequate research about their elderly years. That is borne out by an American Health Care Association of Baby Boomers where 56% did not know that Medicare did not fund for Long Term Care. Medicaid spending for long term care doubled between 1987 and 1997 to $56.1 BILLION

Adult Day Care Cost (2000) "Fees at accredited private facilities can average $40 per day with an extra $3.00 to $5.00 for transportation costs. However, at many non-profit adult day care facilities, transportation and meals may be the only charges–and you can expect to pay no more than $10.00 per day. Often — for example, when a religious group or private foundation funds the adult day care center – there is no charge at all. If there is a charge, be sure to ask if there is a sliding scale fee structure based on financial need."

Long Term Care: (PDF 2000) 'Middle income Baby Boomers will find that to successfully age "in place" - that is, in their homes or in the home-like setting of an assisted living facility - they will have to use their retirement savings to pay for increasingly expensive long-term care services,' says Barbara Stucki, Ph.D., primary author of the ACLI study Can Aging Baby Boomers Avoid the Nursing Home? 'Without private long-term care insurance, many will face potentially catastrophic costs that could lead to impoverishment and the need to use Medicaid-funded nursing home care.'

"While the financial benefits to individual policyholders are obvious, the benefits to government - and future taxpayers - of wider purchase of private long-term care insurance are substantial, the new ACLI study shows. Medicaid's annual nursing home expenditures are projected to skyrocket from today's $29 billion to $134 billion by 2030 - an increase of 360 percent. ACLI's research indicates that by paying policyholders' nursing home costs - and by keeping policyholders out of nursing homes by paying for home- and community- based services, private long-term care insurance could reduce Medicaid's institutional care expenditures by $40 billion a year, or about 30 percent.

"In addition, the ACLI study found that wider purchase of long-term care insurance could increase general tax revenues by $8 billion per year, because of the number of family caregivers who would remain at work. Today, 31 percent of caregivers quit work to care for an older person; nearly two-thirds have to cut back their work schedules; more than a quarter take leaves of absence, and 10 percent turn down promotions because of their caregiving responsibilities. It costs the typical working caregiver about $109 per day in lost wages and health benefits to provide full-time care at home - which is almost as much as the cost of nursing home care."

How to Cope with the Coming Crisis in Long-Term Care (2000) Excellent lengthy article from the Heritage Foundation In 1900, life expectancy for Americans was 47 years of age. By 1935, when President Franklin D. Roosevelt and Congress enacted the Social Security program, establishing eligibility at age 65, life expectancy had risen to age 62. By 1998, life expectancy had risen to 76.6 years, and it is projected to rise to age 81 in 2030, according to recent estimates by the Social Security Administration's Advisory Board.

The average yearly cost in 1998 for staying in a nursing home was $47,000; for the services of a home health aide, $36,000; and for assisted living, $26,000.

From 1990 to 2030, the number of all elderly will increase 105 percent, the number of Americans between the ages of 65 and 74 will grow 89 percent, and those between 75 and 84, 119 percent. But the number of Americans over age 85 will increase 143 percent.

The total number of elderly in nursing homes will climb from about 2.8 million in 2000 to 5.3 million in 2030. Yet only 330,000 of those aged 65 to 74 will be cared for in nursing homes, compared with 1.46 million adults over age 85. In 2030, the 65-to-74 age group will have increased to 650,000, but the over-85 age group in nursing homes will swell to 2.69 million. Although one in five persons will need long-term care sometime this year, 65 percent of those who are older than 85 will need long-term care during this same period (2000-2030).

Medicaid nursing home expenditures--$29 billion in 2000--will climb to $134 billion, a 470 percent increase in just 30 years.

"Who will pay for your long-term care?" Baby boomers answered:

80 percent did not know how they would pay for long-term care; 50 percent had not given long-term care any thought;
51 percent did not know "poverty" was a qualification for Medicaid;
41 percent were willing to pay $1 to 49 per month (the real cost for nursing home care is $3,500 to $4,000 per month);
25 percent were not willing to pay anything for long-term care; and
15 percent could identify Medicaid, not Medicare, as the primary payer of long-term care.

Divorced Baby Boomers Less Likely to Care for Elderly Parents: (Johns Hopkins 2000) Baby boomers have higher rates of divorce and remarriage, two factors that can affect the parent/child relationship later in life, and the likelihood of reliance on formal paid care for the elderly. Elderly divorced parents are less likely to live with a child, which has potential for increased demands on public programs, such as Medicare home health.

World Care for the Elderly (2000) This issue of Health Affairs provides a look at long-term care financing, provision, and reforms around the world.

ElderCare: (2000) Elder care programs continue to grow in popularity with 47 percent of employers now providing assistance, up from 40 percent in 1998 and 24 percent in 1994, according to a newly released survey of 1,020 U.S. employers by Hewitt Associates, a leading global management consulting firm. Of those employers offering elder care programs, dependent care spending accounts (32 percent), resources and referral services (40 percent), long-term care insurance (17 percent) and counseling (4 percent) are the most prominent.

Long Term Care: (Center for Long Term Care 2000)"Medicare cut-backs and Medicaid's parsimony have driven one in ten nursing home beds into bankruptcy. Nevertheless, public expenditures for nursing home care have increased ten percent in the past ten years, while out-of-pocket expenditures are down ten percent. In the meantime, the public's perception of nursing home quality has plummeted while litigation against nursing homes has skyrocketed."

( "The Medicare+Choice Program: Is It Code Blue?") Private Medicare HMOs serving the lion's share of beneficiaries receive annual federal funding increases of two percent, while the annual cost of medical care has increased around eight percent, and the cost of prescription drugs - offered by most Medicare HMOs - is increasing around 15 percent each year. These inadequate payments, as well as the crushing cost of excessive government regulation, are causing HMOs to withdraw from the Medicare program "at an alarming rate. Enrollment growth of private Medicare HMOs dropped from 36 percent in 1996 to less than one percent in the first four months of 2000. Since 1998, a total of 86 HMOs stopped providing Medicare coverage, while another 112 have pulled out of various counties throughout the country. As a result, he says, hundreds of thousands of Medicare beneficiaries have had their coverage disrupted, and hundreds of thousands more likely will face similar problems as Medicare HMOs announce plans to withdraw for 2001.

LTC: (NY Times 2000) About 22 percent of nursing homes in Texas, with an estimated 23,000 beds, are in bankruptcy, and this could jump to as much as 45 percent. The state would need to increase nursing home spending by as much as $800 million in the 2002-2003 budget to help the industry. Earlier this year, the state adopted a 3.7 percent increase in nursing home reimbursements, but industry officials said it was too small. The industry said it needed a 7 percent increase to offset the rising costs of liability insurance and labor. Industry officials say Texas nursing homes lost money every day on Medicaid patients in 1999. Health care providers say the state's $78-a-day average payment was one of the lowest in the country last year while liability coverage has tripled since 1998.

Did you note the comment about Medicaid??? There's the problem. If you want the best of care- even adequate care- and you have money, buy a LTC policy and use it to get into the private pay nursing homes that are not impacted by Medicaid fees.

Here are the average daily nursing home costs per region for a private room: (Met Life 2000)

Albany, NY $200 Miami, FL $123

Atlanta, GA $110 Middlesex Cty., NJ $195

Baltimore, MD $163 Milwaukee, WI $179

Battle Creek, MI $195 Minneapolis, MN $106

Birmingham, AL $105 Nashville, TN $135

Boston, MA $278 New Brunswick, NJ $161

Bristol County, VA $199 New Haven, CT $227

Buffalo, NY $193 New Orleans, LA $97

Charleston, SC $108 New York, NY (Manh) $295

Chattanooga, TN $136 Newark, DE $139

Cherry Hill, NJ $193 Newark, NJ $228

Chicago N. Suburbs $165 North Metro Atlanta, GA $131

Chicago S. Suburbs $138 Oakland, CA $157

Chicago, IL $120 Oklahoma City, OK $134

Cincinnati, OH $127 Omaha, NE $149

Cleveland, OH $200 Orlando, FL $125

Columbia, SC $120 Pensacola, FL $123

Columbus, OH $162 Philadelphia, PA $163

Dallas, TX $149 Phoenix, AZ $152

Dayton, OH $162 Pittsburgh/Napa Cty., CA $127

Denver, CO $141 Pittsburgh, PA $181

Des Moines, IA $102 Portland, ME $192

Detroit, MI $113 Portland, OR $144

Dover, NH $200 Providence, RI $160

Fairfax County, VA $172 Provo, UT $135

Flint, MI $134 Raleigh, NC $120

Florence & Decatur Cty., AL $108 Richmond, VA $147

Fort Wayne, IN $137 Rochester, NY $187

Gary, IN $98 Salt Lake City, UT $135

Grand Rapids, MI $154 San Antonio, TX $114

Greensboro, NC $132 San Diego, CA $149

Hartford, CT $210 San Francisco, CA $169

Hibbing, MN $90 Savannah, GA $103

Houston, TX $111 Seattle, WA $174

Huntsville, AL $113 Springfield, MA $181

Indianapolis, IN $161 Stamford, CT $286

Int. Falls, MN $91 St. Louis, MO $138

Jacksonville, FL $150 Summit, NJ $242

Kansas City, KS $117 Syracuse, NY $196

Las Vegas, NV $133 Tampa, FL $128

Lehigh Valley, PA $167 Toledo, OH $128

Long Beach, CA $138 Trenton, NJ $195

Los Angeles, CA $122 Tucson, AZ $149

Macon, GA $98 Washington, DC $165

Maryland (Suburban D.C.) $173 Winston-Salem, NC $137

Here are the average hourly home health care aide costs from a licensed agency in selected areas:

Alameda, CA $19 Mercer County, NJ $16

Allegheny, PA $16 Miami, FL $14

Atlanta, GA $15 Milwaukee, WI $17

Baltimore, MD $15 Minneapolis, MN $19

Battle Creek, MI $15 Monroe County, NY $17

Birmingham, AL $14 Nashville, TN $14

Boston, MA $19 New Castle, DE $20

Chattanooga, TN $15 New Orleans, LA $13

Chicago, IL $17 New York, NY $14

Cleveland, OH $17 Oklahoma City, OK $14

Columbia, SC $13 Omaha, NE $16

Columbus, OH $16 Onandaga, NY $15

Dallas, TX $15 Orlando, FL $15

Danbury, CT $21 Pensacola, FL $14

Dayton, OH $16 Philadelphia, PA $14

Denver, CO $22 Phoenix, AZ $17

Des Moines, IA $18 Providence, RI $15

Detroit, MI $17 Raleigh, NC $15

Essex, NJ $16 Richmond, VA $13

Ft. Wayne, IN $17 San Antonio, TX $12

Gary, IN $16 San Francisco, CA $17

Grand Rapids, MI $16 Savannah, GA $12

Hartford, CT $24 Seattle, WA $19

Hibbing, MN $14 St Louis, MO $19

Houston, TX $16 Stamford, CT $19

Indianapolis, IN $17 Tampa, FL $16

Jacksonville, FL $14 Toledo, OH $15

Kansas City, KS $16 Tucson, AZ $15

Lansing, MI $16 Washington, DC $16

Las Vegas, NV $18 Winston-Salem, NC $14

Los Angeles, CA $17

TABLE 30C: PERCENTAGE OF NURSING HOME RESIDENTS AGE 65 OR OLDER WHO ARE INCONTINENT AND DEPENDENT IN MOBILITY AND EATING, BY AGE GROUP AND SEX, 1985 AND 1997

DEPENDENT MOBILITY INCONTINENT DEPENDENT EATING DEPENDENT MOBILITY, EATING, AND INCONTINENT

1985 1997 1985 1997 1985 1997 1985 1997

TOTAL

65 OR OLDER 75.7 79.3 55.0 64.9 40.9 45.1 32.5 35.7

65 TO 74 61.2 73.1 42.9 59.2 33.5 42.1 25.7 30.7

75 TO 84 70.5 77.1 55.1 64.3 39.4 44.8 30.6 34.5

85 OR OLDER 83.3 82.6 58.1 66.9 43.9 46.1 35.6 37.8

MEN

65 OR OLDER 71.2 76.3 54.2 65.0 36.0 42.8 28.0 33.6

65 TO 74 55.8 72.3 38.8 60.1 32.8 42.7 24.1 32.9

75 TO 84 65.7 75.1 54.4 65.9 32.6 43.7 25.5 34.6

85 OR OLDER 79.2 78.3 58.1 65.6 39.2 42.1 30.9 33.0

WOMEN

65 OR OLDER 77.3 80.2 55.4 64.8 42.4 45.6 33.9 35.9

65 TO 74 64.5 73.7 45.4 58.6 34.0 41.6 26.7 29.2

75 TO 84 72.3 78.0 55.3 63.6 42.0 45.3 32.6 34.4

85 OR OLDER 84.3 83.5 58.1 67.2 45.0 46.9 36.7 38.8

Note: Residents dependent in mobility and eating require the assistance of a person or special equipment. Residents who are incontinent have difficulty in controlling bowels and/or bladder or have an ostomy or indwelling catheter. Rates for the 65 or older category are age-adjusted using the 1995 National Nursing Home Survey population.
Reference population: These data refer to the population residing in nursing homes. Persons residing in personal care or domiciliary care homes are excluded.
Source: National Nursing Home Survey.

Assisted Living: (2000) Assisted-living facilities can provide an alternative to long-term care in a nursing home. A recent national study of assisted-living facilities found that there were 11,472 assisted-living facilities nationwide, accommodating 558,400 residents. Assisted-living administrators estimated that 24 percent of their residents received assistance with three or more activities of daily living, such as bathing, dressing, and mobility. They estimated that about one-third of the residents had moderate to severe cognitive impairment.

LTC Policy increases and the NAIC: (2000)Insurance companies that persistently file for rate increases could be banned from doing business in states that adopt the new long term care regulatory amendments.

LTC: Over the last five years, the average daily nursing home benefit has increased by 28 percent - higher than the overall inflation rate. Also, the proportion of policies that cover both institutional care and home care grew from 37 percent in 1990 to 77 percent in 2000

Chart of Average Health Care Expenditures Among Medicare Beneficiaries Age 65 or Older, in 1996 Dollars, by Age Group, 1992 to 1996. See text for details.

Chart of Major Components of Health Care Expenditures Among Medicare Beneficiaries Age 65 or Older, 1992 and 1996. See text for details.

Chart of Percentage of Nursing Home Residents Age 65 or Older Who Are Incontinent and Dependent in Mobility and Eating, by Age Group, 1985 and 1997. See text for details.

Chart of Rate of Nursing Home Residence Among Persons Age 65 or Older, by Sex and Age Group, 1985, 1995, and 1997. See text for details.

LTC (2000)The Department of Health and Human Resources says that patients need, on average, two hours of care each day by a nurses aide but that 54% of nursing homes fall below this minimum standard. The lack of care has caused an increase of severe bed sores, malnutrition and abnormal weight loss.

Now tell me- do you want your loved one to go to a Medicaid ward? If you have money, buy a policy and then seek the homes that have the best private care. We do not have a budget surplus that will ever be able to pay for this. After all, we don't even have a national health system.

About 1.6 million American receive care in 17,000 nursing homes.

Survey on Health Care and Other Elder Care Issues(PDF) 2000

Elder Care: A new survey conducted by Family Circle magazine and the Kaiser Family Foundation has found that many may not be completely prepared for the task . The survey found that half check in on their parent with regular phone calls or visits, over four in ten visit or see their parent at least once a week, and more than a quarter help their parent with medical and financial decisions.

In the survey, 43 percent of the respondents said they knew little or nothing about their parents' health insurance, and 45 percent did not even know who their doctors were. Almost one-third said they were unaware of where their parents kept financial statements and other important documents like health insurance cards.

Most of the participants knew that Medicare was the health insurance program serving people over 65. But many were not familiar with the program's basic restrictions: only 38 percent knew that Medicare did not generally pay for prescription drugs, and just 34 percent knew that Medicare did not pay for long-term care.

Only 37 percent of participants were aware that Medicaid was the health insurance program for low-income families.

Long-Term Care Services in the States (U. S. Administration on Aging 2000) An overview of the Long-Term Care environment in America. Links include a national overview, state-by-state comparisons, and state programs and planning.

"Public Financing and the Market for Long-Term Care." (2000) An excerpt: "Two related forces affect the demand for nursing home care: the overall disability of the elderly population, and the rate of marriage among the elderly. Naturally, when disability rises, the demand for nursing home care rises. However, when the rate of marriage rises, the demand for nursing home care falls, because a spouse can function as a caregiver at home and thus represent a ready substitute for nursing home care. Healthy aging not only lowers nursing home demand, but also raises the supply of substitutes for nursing home care. By means of these two forces, growth in the elderly population, or aging, can actually lower demand for nursing home care, as appears to have been the case. If the healthy elderly population grows more rapidly than the disabled population, the per capita supply of healthy caregivers rises, and nursing home demand falls. Similarly, if the population of elderly males grows more rapidly than the population of elderly females, the per capita supply of spousal caregivers rises, and nursing home demand falls."

Did you note the bit about marriage. Sure a spouse- usually the woman- keeps the man out of an institution. But at what emotional cost? If you have money, buy a LTC policy. Otherwise both spouses suffer

FEDERAL LONG-TERM CARE INSURANCE (2000)The actual bill on the new coverage of LTC for Federal Employees.

Americans who get hands-on help from others so that they can accomplish life's basic daily activities are not necessarily elderly nor do they all live in nursing homes (Agency for Healthcare Research and Quality (AHRQ)2000). The latest available data show that an estimated 9.4 million adults, ages 18 and over, are given hands-on assistance to carry out either instrumental activities of daily living (IADLs)-chores such as shopping and housework-or for the more basic activities of daily living (ADLs), such as bathing and dressing. Roughly 79 percent of these people live at home or elsewhere in the community rather than in institutions, and almost half are under 65 years of age. These non-elderly adults who receive long-term care are less disabled than elderly adults, more likely to be mentally impaired, and more likely to live in the community. They are also more likely to receive only informal care, the type provided by family and friends, rather than only formal care, which is provided by agencies or other paid help, or by a combination of both.

LTC (2001) From, "When Caring Isn't Enough . . . Meeting the Need for Long-Term Care with Long-Term Care Insurance," by Samuel Larry Feldman and the National LTC Network","Many people who become convinced that transferring wealth to become eligible for Medicaid is a good idea ultimately discover that, by protecting their assets for someone else, they have drastically limited their own options and choices for long-term care. For instance, the level of Medicaid reimbursement for Assisted Living facilities and Alzheimer's centers is so low that these types of institutions seldom accept Medicaid residents. Most skilled nursing facilities accept Medicaid recipients now, but may have a limited number of Medicaid beds and may have long waiting lists of people ready to fill them. Those facilities with large numbers of Medicaid residents find they cannot provide an optimum quality of care on Medicaid funding, which is far lower that private pay rates. This often drives privately paying patients to the better facilities where larger numbers of privately paying residents provide funding for better quality care. Sometimes the only Medicaid openings available are some distance from relatives and friends with whom the resident would like to maintain contact. Home care, which is preferred by most people when possible, is difficult to get via our overburdened welfare system. . . . All in all, much of the freedom to choose how and where you will be cared for is lost to people on Medicaid. Medicaid was designed to be a safety net for those who lack the means to provide long-term care for themselves. It was never intended to be an entitlement for a prosperous middle class."

2000 Report on Quality of Long-Term Care Issued Stating that quality of care in the nation's long-term-care facilities is "an ever-pressing issue," the Institute of Medicine has released a new report on long-term care that makes several sweeping recommendations to improve its quality. Among other things, the report recommended that HCFA develop minimum staffing levels for direct care and urged that Congress and the states adjust Medicaid reimbursement formulas.

The LTC Triathlon: Report on Long-Term Care Financing Issued - The Center for Long-Term Care Financing released a report entitled The LTC Triathlon: Long-Term Care's Race for Survival (2000). Excerpt: "America's long-term care service delivery and financing system is a tragic mess. The symptoms include widespread bankruptcies, collapsed stocks, scant capital, scarce staffing, high costs, low government reimbursement, little private insurance, declining quality, expanding litigation, skyrocketing liability premiums, persistent institutional bias, and a growing generation of overwhelmed family caregivers. Unfortunately, aging demographics signal that the worst is yet to come. What's wrong? Who's responsible? What should be done? Those are the questions this study set out to address. The answers provided in this report reflect responses from 119 interviewees representing the leading financiers, providers and insurers of long-term care in the United States."

HCFA Releases Draft Guidelines on Nursing Home Restraints 2001

IRS Revenue Procedure 2001-13 gives the 2001 indexed figures for "eligible long-term care premiums" that can be considered "medical care" for federal income tax purposes. The 2001 allowable premium figures range from $230 per year (age 40 or less) to $2,860 per year (over age 70), up from $220 to $2,750 in 2000. The per diem limit for favorable income tax treatment for periodic payments received under a qualified long-term insurance contract will increase to $200 per day in 2001.

LTC: (2001) ("Rainey v. Guardianship of Mackey," 4D00-2018, Fla. App. December 20, 2000), Florida's Fourth District Court of Appeal stated:“Courts must make room for the possibility that some children may try to pressure vulnerable parents into divesting themselves of assets so that the estate is not depleted by the costs of nursing home care.” In so doing, the court rejected a request from the appellants in this case, guardians for an 86-year-old nursing home patient, to require Medicaid planning for long-term care on behalf of their ward. The court’s statement bears witness to the fact that Medicaid planning is often initiated by adult children looking for an early inheritance from their vulnerable parents.

LTC: (2001) 20% of the elderly are now obese. There has been a 57% increase in obesity since 1991 and a 5.6% increase from 1998 to 1999. The result- there has been a 41% increase in diabetes since 1990. This directly relates to a huge increased medical bill. Guaranteed renewable LTC rates are going to go up. Many elderly will get hurt.

Consumer-Directed Home- and Community-Based Services: (Urban Institute 2001) The study assesses the policy implications of consumer-directed home and community services for older persons by examining the experiences of public programs (often Medicaid funded) that serve this population in eight states. These programs give beneficiaries, rather than agencies, the power to hire, train, supervise, and fire workers. Most stakeholders interviewed for this case study, in addition to quantitative research, indicate that many older beneficiaries want to and can manage their services, although significant issues arise about the ability of persons with cognitive impairment to manage. Research results also point to better quality of life for beneficiaries when they direct their services, although quality of services remains a contentious issue. For workers, consumer-directed care has some disadvantages, including fewer fringe benefits. With exceptions, state agencies have not provided extensive consumer or worker support or aggressively regulated quality of care.

Psychiatric Treatment in Nursing Homes Often Unnecessary: (pdf) 2001 Thirty-nine percent of psychiatric services in nursing homes are either medically unnecessary, have no mental health documentation, or are questionable, the Office of Inspector General reports. Psychological testing is the most problematic of the services OIG reviewed in this study. Further, while carrier policies now specifically address psychiatric services in nursing homes, utilization guidelines are inconsistent and unclear. OIG recommended that the U. S. Health Care Financing Administration strengthen the billing process for psychiatric services in nursing homes by working with carriers to develop guidelines for the appropriate frequency and duration of such services, identify specific psychological testing instruments, and take advantage of the Minimum Data Set. Implementing these recommendations would result in potential savings of as much as $30 million a year, OIG claims. HCFA concurred with the recommendations.

Labor Department Study Warns Policy Makers on Long-Term Care Costs: (2001) This report on long-term care was prepared for the Secretary of Labor. Excerpt: "There is a potentially future serious long-term care (LTC) crisis in the United States. It is important that policy makers pay attention to this potential crisis and take specific preventive action to avoid it ... Baby boomers and their parents are requiring LTC services in record numbers. At present LTC consumes approximately one-eighth of national health expenditures, about the same proportion as prescription drugs." The Working Group makes several wide-ranging recommendations on dealing with the problem.

Assisted Living (NY Times) It ain't cheap- While monthly fees in nursing homes average $5,000 — paid mainly by the government's Medicaid program — residents and their families pay assisted living centers $2,500 to $6,000 a month from their own pockets, and often hundreds of dollars more for medical care.

And generally Unregulated- Assisted living facilities fall somewhere between nursing homes and retirement communities, offering a mix of independence and help with everyday tasks, such as meals, housekeeping and some basic medical attention. Regulation of the industry is very difficult and is often patchwork at best. While 29 states, including Oregon and New Jersey, have passed laws regulating certain aspects of assisted living facilities' operations, other states provide little or no oversight of the homes.

And whether to keep or throw a patient is capricious- To increase revenues and keep beds filled, assisted living companies have sought to retain the most frail and dependent residents, who typically are charged for the extra services they need. Indeed, Wall Street analysts say success on this score has become crucial for providers as more and more homes are built.

Moreover, residents often welcome the chance to remain in an assisted living center, rather than move to a nursing home as their health declines. On the flip side, other centers evict residents with little notice if their condition deteriorates.

"One of the problems that has confronted the industry is that consumers expect to move in and stay until they die or develop serious health problems," said Robert L. Mollica, the deputy director of the National Academy for State Health Policy, a research organization in Portland, Me. "And then they find out that the facility they chose does not allow them to stay once they get to a certain stage."

Study Finds No Benefit in Tube Feeding of Patients with Dementia: (2001)The influence of tube feeding on survival in hospitalized patients with advanced dementia is controversial. This study, reported in the Archives of Internal Medicine, found that the risk of new tube feeding is high and has no measurable influence on survival. With or without a feeding tube, these patients have a 50% six-month median mortality.

Barriers to Long-Term Care for Disabled Elderly Are Rising: (2001) Because long-term care has evolved since a 1988 Institute of Medicine report, this research report examines the characteristics of adult long-term care users. In analyzing the care, the report distinguishes between community-based and institutional care and also the age of recipients. The great diversity of long-term care users and the increasing level of disability of the elderly long-term care population documented suggest that it will remain difficult and expensive to ensure access to long-term care and meet the needs of this population. Both nursing home and home care expenditures in Medicare and Medicaid are projected to double from 1995 to 2005, and efforts to reduce public costs need to be monitored carefully to ensure that this population's needs are met.

LTC and MIB: (2001) A study showed that 16 percent of applicants for LTC coverage had some sort of medical condition on file at MIB. Seven percent of applicants had conditions that could have caused companies to reconsider the decision to issue a policy. Since the average amount paid on a closed LTC claim in 1999 was $92,000, that meant that the seven percent of LTC applicants in this sampling with serious medical conditions represented nearly $10 million in potential claims. And those were claims on policies that probably would not have been issued if underwriters had been aware of information readily available from MIB.

LTC: (2001) The number of United States residents covered by employer-sponsored insured long-term care insurance programs increased 19% in 2000, to 929,000, according to LIMRA International. But the number of employers offering LTC programs dropped 6% in 2000, to fewer than 3,800.

LTC: 2001 According to the Consumer Federation America (CFA) and the American Council of Life Insurers (ACLI), 82% of U.S. workers either have no long-term disability income coverage or believe their coverage is inadequate. CFA and ACLI have prepared a free brochure, Long-Term Disability Income Insurance -Financial Protection for You & Your Family, to help people understand this most misunderstood product. The brochure is available on CFA's Web site and on ACLI's Web site.

DRUGS and the ELDERLY: (Agency for Healthcare Research and Quality 2001.) Training nursing home doctors and nursing staff to treat chronic pain from osteoarthritis and other disorders through safer means than nonsteroidal anti-inflammatory drugs (NSAIDS) could reduce the incidence of drug-induced complications and even death in elderly residents without increasing their pain and disability.

The educational program provided instructions for substituting acetaminophen for NSAIDs, as well as for using topical agents, such as salicylic acid and capsaicin creams, and non-drug therapies like stretching and strengthening exercises. While acetaminophen is no more effective than NSAIDs, it does not cause the latter's complications, which include peptic ulceration and gastrointestinal bleeding. The randomized controlled trial involved 20 Tennessee nursing homes and 147 residents age 65 and older who took NSAIDs regularly. For details, see "An Educational Program for Nursing Home Patients and Staff to Reduce Use on Non-Steroidal Anti-Inflammatory Drugs Among Nursing Home Residents: A Randomized Controlled Trial," in the May 2001 issue of the journal, Medical Care.

Nurses (2000) Between 1991 and 2020, the AHCA study predicts the following growth in demand for nurses and nurse assistants:

*nursing facilities: registered nurses 66%; licensed practical and vocational nurses 72%; nurse assistants 69%.

*home health settings: registered nurses 270%; licenses practical and vocational nurses 268%; nurse assistants 263%.

According to the study, there will not be a sufficient workforce available in the coming years to maintain even the current staffing levels in skilled nursing facilities. This staffing shortage can, in turn, lead to a declining availability of services and introduce a problem of access to care for those, particularly the elderly, requiring long-term health care. It will also increase LTC premiums in my opinion.

The average nurse working in a long-term care facility earned 17% less than a comparable nurse working in an acute care hospital in 1996.

(Medicaid pays approximately 80% of the private pay rate and often less than even the cost of providing the care.) Today, skilled nursing providers are often lucky to have enough private pay patients to offset their Medicaid losses--leaving little or no money to invest in staff and facilities. In time, as providers transition to a mostly private pay census, the infusion of private dollars will empower them to attract enough capable and motivated staff to meet the predicted demand. Simply put, "You get what you pay for." Well-staffed long-term care providers are no exception.

Good for the elderly: (National Academy of Sciences) More than eight out of 10 elderly Americans are able to take care of themselves on their own, demonstrating that they are not only living longer, but also more vigorously. The rate of disability among elderly Americans has dropped under 20% for the first time.

Better Living: (Washington Post, Proceedings of the National Academy of Sciences 2001) Americans are not only living longer, but they are living more robust lives, in a study that tracked chronic disability rates from 1982 to 1999. Even as the elderly population has grown, the number of seniors needing help with routine activities such as bathing and eating fell sharply in the past decade, according to the report. Technological advances, healthier lifestyles and education are identified as likely explanations for the trend, a phenomenon that could mean dramatically lower costs for the government's Medicare and Social Security programs.

NURSING SHORTAGE SAID TO BE REACHING CRISIS STAGE (2001) The shortage of nurses and nurse aides is rapidly reaching the crisis point and is threatening the quality of patient care, witnesses told a Senate Committee on Thursday.

LTC: (2001) Seventy-six percent of Americans believe they will have no need for nursing home care, assisted living programs, home-based or community-based care, or any other LTC service. The facts show otherwise:

two out of five Americans will need some LTC some time in their life. Over the age of 50, the risk is even greater for one in five Americans who will need LTC services during the next twelve months. The U.S. Census Bureau reports the over-85 population is the fastest growing societal group with one out of four elders already living in a nursing home.

Last year about seven million men and women over the age of 65 needed long-term care. By 2005, the number will increase to nine million.

"The MetLife Study of Employed Caregivers: Does Long Term Care Insurance Make a Difference?" (2001)

"*Holding other factors constant, those caring for disabled elders with long-term care insurance are nearly two times as likely to stay in the workforce than are those caring for non-insured disabled individuals.

"*Insurance-financed care does not result in a significant reduction in the time working caregivers devote to caring. However, working caregivers of those with long-term care insurance devote more 'quality time'-- more companionship and less hands-on assistance with basic living activities than those without.

"*Caring for someone with long-term care insurance can reduce certain work disruptions among working caregivers. Sandwich Generation caregivers and those caring for very disabled elders are most likely to benefit.

"*Long-term care insurance can reduce certain 'social' stresses among working caregivers, i.e., the feeling that caregiving interferes with their emotional/social well-being or health.

"*Insured care recipients do not report a difference in the adequacy of family caregiving due to the work status of the family caregiver. The level of reported undermet ADL need among insured care recipients with working and non-working caregivers is similar.

"Long-term care insurance appears to play an important role in keeping caregivers in the workforce and in reducing certain workplace disruptions and social stresses. This may be very significant for employers who are looking at corporate eldercare and policy-makers who want to reduce the negative economic effects of caregiving. Additional research on work-place, caregiving, and insurance issues will provide more knowledge about how to support family care-giving and meet the needs of working caregivers."

Medicaid Estate Planning Unmasked (2001) Excerpts from an article titled "Medicaid Estate Planning: Perceptions of Morality and Necessity," by Leslie Curry, Cynthia Gruman and Julie Robison, published in the February 2001 edition (Vol. 41, No. 1) of "The Gerontologist," a peer-reviewed scholarly journal. ( Center for Long Term Care Financing) AND

Do You Really Want To Qualify Mom for Medicaid? (2001) Attorney and estate planner Lee R. Phillips, writing in Broker News Online, provides this reality check on living revocable trusts.

LTC: (2001) Nursing home residents are also important users of hospitals. About 9 percent of all Medicare hospital admissions are transfers from nursing homes. About 28 percent had one or more hospital visits during their nursing home stay. (Murtaugh and Freiman, 1995; Freiman and Murtaugh, 1995).

About 43 percent of persons turning age 65 will use a nursing home before they die. About 20 percent of users will spend 5 or more years there (Kemper and Murtaugh, 1991). Of those turning 65, 17 percent can expect to use a nursing home and receive Medicaid reimbursement (Spillman and Kemper, 1995).

More than 70 percent of nursing and personal care home residents are women and two-thirds of them are widowed or divorced. About 40 percent are demented and about 59 percent require assistance with four or more Activities of Daily Living (ADLs) (Lair and Lefkowitz, 1990).

About 10 percent of residents in nursing and personal care homes are under age 65 (Lair, 1992) and 11 percent do not need help with ADLs (Lair and Lefkowitz, 1990).

Nearly 6 million persons used home health services in 1987 (Altman and Walden, 1993).

The most frequently used home care services are home health aides and homemakers, providers that frequently are not covered by either public or private insurance (Altman and Walden, 1993).

Women were twice as likely to use home care as men. Those persons aged 85 and older, widows, those living alone, and those having difficulties with basic daily activities were the most likely to have a home care visit (Altman and Walden, 1993; Short and Leon, 1990).

Married persons are half as likely as unmarried persons to be admitted to a nursing home; having at least one daughter or sibling reduces those chances by about one-fifth (Freedman, 1996).

Generous home care programs increase the likelihood that unmarried persons will live independently rather than live in shared housing or enter a nursing or personal care home (Pezzin, Kemper, and Reschovsky, 1996). Evidence was not found that these interventions displaced informal care (Kemper and Pezzin, 1996).

About 20 percent of the elderly living in the community (5.4 million persons) in 1987 had difficulty with at least one instrumental or basic ADL (Leon and Lair, 1990). About 4 million of these persons need human help with these activities (Stone and Murtaugh, 1990). About one-fourth of those needing human help are cognitively impaired, and about one-half receive help with just ADLs (Spector, 1991).

A conservative estimate is that 15 percent of nursing home residents could be cared for at lower levels of care (Spector, Reschovsky, and Cohen, 1996).

About one million persons aged 65 and older living in the community would be eligible under criteria of needing active or standby help with three or more ADLs. The number would increase as much as 70 percent if eligibility were included for cognitively impaired persons, depending how that was defined (Spector, 1991). Other criteria are also potentially important, such as the need for complex medical treatments (Kemper, 1992).

Cost-based reimbursement increases the number of registered nurses, but reduces the number of practical nurses compared with flat-rate reimbursement. Higher reimbursement levels encourage the employment of practical nurses (Cohen and Spector, 1996).

Higher professional nursing staff levels and lower turnover of staff improve nursing home outcomes (Cohen and Spector, 1996; Spector and Takada, 1991).

Nursing facilities with few private pay residents are associated with negative outcomes (Spector and Takada, 1991).

For-profit nursing homes have lower operating costs (Cohen and Dubay, 1990) but higher hospitalization rates than nonprofits (Freiman and Murtaugh, 1993).

Case management can reduce cost per participant and maintain quality if the agency has power to authorize public payments, maintains an average expenditure cap, and provides the case management services itself (Kemper, 1990).

About 95 percent of noninstitutionalized elderly persons in need of long-term care rely on family members and friends for help with activities of daily living. About 70 percent of the combined community and institutional population receiving long-term care rely entirely on private resources (Spillman and Kemper, 1992).

Publicly-provided formal home care results in only small reductions in the overall amount of care provided by informal caregivers (Pezzin, Kemper, and Reschovky, 1996) while enabling elderly persons with disabilities to live more independently and to reduce their probability of institutionalization (Kemper and Pezzin, 1996).

The effectiveness of alternative government long-term care policies, such as caregiver allowances and other cash incentives designed to promote family care, depends critically on whether transferred resources are targeted to the elderly person or the caregiver (Pezzin and Schone, 1997).

Caregivers of elders with greater care needs are more likely to take unpaid leave, reduce work hours, or rearrange their work schedules to assume elder care responsibilities. Being female, white, and in fair-to-poor health also increased the likelihood of the caregiver requiring accommodation in his or her work (Stone and Short, 1990).

Major determinants of caregiver attrition are the degree of dependence of the frail elderly care recipient and the need for help on demand (Boaz and Muller, 1991).

About 95 percent of the facilities for the mentally retarded are community based, but they represent only about 60 percent of the beds because of large State institutions (Beauregard and Potter, 1992).

About half of persons with DD in institutions are admitted after they are past the age of 40. About two-thirds of persons with DD aged 65 or older are in nursing homes or other long-term care facilities that are not specially designated for DD (Altman, 1995a).

The most ADL-disabled persons tend to reside in State institutions, and the least disabled tend to reside in small private or public facilities (Cunningham and Mueller, 1990).

The type of services needed are very similar across age groups, although the reasons for these needs differ (Altman, 1995a).

LTC Medical Underwriting: (2001)

Federal Report Recommends Stricter U.S. Nursing Home Guidelines A recent study by the Department of Health and Human Services concluded that understaffing has contributed to increased incidences of severe bed sores, malnutrition and abnormal weight loss among nursing home patients.

Reducing Mortality in Older Patients Following Hospital Discharge: 2001Older hospital patients have about a one-third risk of dying in the year following discharge. The 6 characteristics that can be used to predict a patient's specific risk are male sex, dependence in activities of daily living, cancer, heart failure, renal insufficiency, and hypoalbuminemia.

LTC- More than half of Medicaid money spent on long-term care is dedicated to nursing home care, while nursing home patients account for just 25 percent of Medicaid recipients.

LTC: (2001) 3 million Americans currently receive long-term care in a facility -- and 40% of them are between the ages of 18 and 64.

Your risk of a major fire in your home is 1 in 1200; yet, it is certain you have homeowners insurance.

Your risk of a major auto accident is 1 in 240; yet, it is certain you have automobile insurance.

Your risk of spending more than $30,000 in a hospital is 1 in 15; yet, it is certain you have health insurance or Medicare.

Your risk at age 65 of needing long-term care- which could easily cost you $100,000 or more - is 1 in 2.

Eat those french fries folks and then figure this could happen to you. (2001) Nursing home’s care plan for 92-year-old, obese patient called for “2-3 staff members” to assist with transfers. During transfer with two staff members, patient fell, became entangled in legs of staff members and broke her leg and hip. State licensure agency determined fall was avoidable and fined nursing home, which appealed. Although court agreed with agency that the accident was avoidable, it reversed citation and fine, finding that the transfer in question was within the guidelines calling for a two-person transfer.

Nursing Shortage: (2001) spending on medical staffing is likely to increase more than 20 percent a year to $8.7 billion in 2001 and $10.6 billion next year. As more nurses reach retirement age the next 20 years, the shortage will worsen. Many firms that employ nurses are now eager to import foreign nurses to meet demand. But the nursing shortage is international.

It is one of the key reasons that I believe that long term care products will increase in price in subsequent years. Another reason not to opt for Medicaid since they cannot afford good care to begin with.

LTC: (2001) "Despite the progress in many states to shift the focus to long-term care, institutional nursing home care still consumes three times as many Medicaid dollars as home and community-based services, an unfortunate and troubling imbalance." According to the Congressional Research Service, there are nine million people in the United States over age eighteen that receive long-term care assistance.

The vast majority are now in home and community-based settings, while less than 20 percent live in nursing homes. Most are elderly. In 1999, the most current year for which data are available, Americans spent $133.8 billion on long-term care, nearly 13 percent of the total national spending on health care. That is slightly more than the nation spends on the combined costs of prescription drugs and nondurable medical supplies.

Aging Committee Examines Impact of Long-Term Care on States (2001)

The Senate Special Committee on Aging held a hearing on long-term care addressing a variety of state initiatives to shift Medicaid services away from institutional care and toward community-based services. The hearing, entitled "Long Term Care: States Grapple with Increasing Demands and Costs" featured a number of state long-term care experts, including Vermont Governor Howard Dean; David Hood, Louisiana's Secretary of Department of Health and Hospitals; and Rich Browdie, Pennsylvania's Secretary of Aging. State officials urged the panel to give states greater flexibility in providing long-term care services to the elderly in community-based and in-home settings instead of nursing home facilities.

A big reason why health care costs will escalate: (2001) Frustrated with long hours, a lot of overtime and a heavy workload, many nurses have stopped working or have changed professions. The American Medical Association projects a 20% shortfall of nurses by 2020.

LTC (2001) In 2020, one of six Americans will be age 65 or older -- 20 million more seniors than today. By 2040, individuals 85 and older (the group most likely to require long-term care) will more than triple to over 12 million.

Today, roughly 40 percent of long-term care in this country is paid for by individuals needing care, their families, the insurance they purchase, or through other private sources. The average annual cost of a one-year nursing home stay is $55,000.

PPS Does Not Affect Access to Medicare Skilled Nursing Care or Home Health Care 2001

The Office of Inspector General issued two reports this month on how the Medicare prospective payment system has affected access to skilled nursing facilities and home health care.

This report describes the effects of the prospective payment system on access to skilled nursing facilities for Medicare beneficiaries. The prospective payment system for nursing homes was implemented in January 1999. Results are similar to those reported for home health. The OIG found that almost all Medicare beneficiaries have access to skilled nursing facilities when they need it. The number of skilled nursing facility beds nationwide continues to increase. However, some patients with certain medical conditions or service needs experience delays.

Nursing Homes: (2001) Elderly people were abused in nearly a third of the nation's nursing homes in the past two years, many of them suffering serious injuries such as hip fractures. More than 5,280 nursing homes were cited for abuse violations.

The reported abuses were physical, sexual and verbal. All abuse is on the rise, the report said. More than twice as many nursing homes were cited for abuse in 2000 than in 1996. In 1996, 5.9% of all nursing homes were cited for an abuse violation during their annual inspections; in 2000, 16% of nursing homes were cited.

More than 40%, or 3,800 abuse violations, were only reported after formal complaints from residents, their families or community advocates.

1,327 homes were cited for more than one abuse violation in the two-year period; 305 homes were cited for three or more abuse violations, and 192 nursing homes were cited for five or more abuse violations.

I think this is due in good part to the lack of qualified attendants ALONG WITH the fact that those facilities offering Medicaid coverage do NOT have the money to purchase the best of people. If you have money, buy a policy. No, they are not perfect- but there is less abuse with qualified people. About 1.5 million seniors live in nursing homes.

Homes 2001 the Special Investigations Division of the House Government Reform Committee, which oversees federal spending and other government operations, has found that nearly one-third of nursing homes were cited for a violation involving abuse between January 1999 and January 2001, that many of these abuse violations caused actual harm to residents, and that the number of abuse violations is increasing.

ADL: A 1997 US Census study estimated that there are 10.1 million Americans who need assistance with activities of daily living.

Hospice Helper (2001) The Hospice Foundation site is designed to help patients and their families find comfort and support in the final days of a terminal illness.

The Challenge of Caring for Patients with Dementia (Mary Marshall 2001) Professional carers need higher expectations and better training and support.

Disability-Model LTCs Can Be An Option For Some Clients (2001) Most long-term care insurance policies currently being sold are structured on the so-called reimbursement model. However, the disability model may be gaining greater attention, so the market will have more choice than ever, says Long Term Care Group's Peter Goldstein writing for National Underwriter.

Issues in Home Rehabilitative Care (Neil J. Nusbaum 2001) Several issues are changing the face of home rehabilitative care. The author explains how recent growth in home health care, the availability of rehabilitation services to a homebound patient, federal programs for home care, and the Health Care Financing Administration’s plans for a prospective payment system are all playing a role in doing so. This article is reprinted from the Annals of Long-Term Care 2000

Less-Than-Standard LTC Risks Can Be Insured Stephen K. Holland Despite the lack of disease-specific actuarial data that exists today, it is still possible to assign applicants to different risk classifications for LTC insurance. But to do so prudently, LTC underwriters need to understand why people go into claim, and the carriers must be smart about plan design in order to limit their liability on these riskier cases, says this article in National Underwriter.

Assisted Living: A National Study of Assisted Living for the Frail Elderly, the first national study of assisted living facilities

Medicaid underfunding: (pdf) Medicaid is underfunding nursing home care by at least $3.3 billion annually, according to an analysis of the Medicaid program released August 30 by accounting firm BDO Seidman, and funded by the American Health Care Association. Nursing facilities in New Jersey, Vermont, Massachusetts, Nevada, South Dakota, Oregon, Utah, Florida, Washington and Indiana experience the largest differential between the allowable costs of care per resident and governmental reimbursements.

Nursing Home costs: (2001) Agency for Healthcare Research and Quality's Medical Expenditure Panel Survey (MEPS) show that:

• From 1987 to 1996, the total annual expenses for nursing home care increased from $28 to $70 billion, a 150 percent increase.

• Annual expenses per nursing home resident increased by 63 percent, from $13,866 to $22,561. Daily expenses per nursing home resident increased from $56 to $118, for a 111 percent increase.

• Annual expenses per resident day were highest in the Northeast and West, and experienced the greatest increase from 1987 to 1996. Expenses in the Northeast increased 97 percent, from $73 to $144. Expenses in the West increased 156 percent, from $59 to $151.

• There was a large shift in the source of payments between 1987 and 1996. Medicare payments increased from 1.9 percent of total payments in 1987 to 18.9 percent in 1996. The greatest change occurred in the West, where Medicare's share increased from 4.1 percent in 1987 to 34.7 percent in 1996.

LTC: "A Briefing Chartbook on Shortfalls in Medicaid Funding for Nursing Home Care, (PDF) " prepared by BDO Seidman, LLP for the American Health Care Association (the trade association for America's proprietary, i.e. for- profit, nursing homes), August 30, 2001. He finds that over two-thirds of residents in America's nursing homes are financed by Medicaid.

California Department of Health Services' California Partnership for Long-Term Care. (2001) John Hancock Life Insurance Company has been certified as the sixth private provider of Partnership policies. The others are Bankers Life and Casualty, CNA Insurance, GE Financial Assurance, New York Life Insurance and Transamerica Occidental Life Insurance.

Partnership-certified policies are the only policies sold in California that contain a lifetime asset protection feature. This feature protects a selected dollar amount should the insurance benefits run out, requiring the policyholder to use Medi-Cal, the state's health insurance for low-income residents. In addition, all Partnership-certified policies contain many consumer features, such as built-in inflation protection to safeguard the policyholder from the inevitable increase in long-term care costs.

But therein lies the problem- the use of Medicaid for care. I don't like it if for no other reason that it does not pay enough for solid care.

That said, Partnership-certified policies are the only policies sold in California that contain a lifetime asset protection feature. This feature protects a selected dollar amount should the insurance benefits run out, requiring the policyholder to use Medi-Cal, the state's health insurance for low-income residents. In addition, all Partnership-certified policies contain many consumer features, such as built-in inflation protection to safeguard the policyholder from the inevitable increase in long-term care costs.

LTC: (2001) "The biggest problem the LTC industry faces is the inability to attract, train and retain appropriate staffing."

"We must educate the public on what assisted living is. Assisted living is the platform for long-term care for the future. Nursing home stays will become shorter and shorter and assisted living stays will become much longer. But, people do not understand that the government doesn't pay for assisted living. In the meantime, overbuilding, aggressive competition, and rate-cutting which ultimately cuts care are the norm. This reflects short term needs, rather than long-term needs."

"Nurse registry and home health care services in the private sector are experiencing extreme growth. There are not enough hours in the day. We can't keep up with the work. In the public sector programs, however, problems abound. We don’t know if they are going to survive.

The LTC insurance industry must insist: don't bring me someone who needs long-term care; bring me someone who needs long-term care INSURANCE."

Nurses shortage: (2001) If the current trend continues, there will be a shortage of 500,000 nurses by 2020.

The Centers for Medicare & Medicaid Services (2001) will issue a quarterly compendium of all changes to Medicare instructions that affect providers. The Compendia will be a single source of national provider information. The first issue will be released on the Internet at http://www.cms.hhs.gov/compendium

LTC and Medicaid: (2001) a recent BDO Seidman study noted that the gap between nursing homecosts and Medicaid reimbursement in Washington is $11.61 per patient per day. the only way nursing homes can now stay in business . . . is to charge private pay patients $20 to $30 a day more than what Medicaid pays.

Medicaid care in a nursing home. (2001) "Maybe the care in nursing homes appears the same regardless of payment status, but the overall experience may be quite different. We actually do have a nursing home here in Spokane that has a Medicaid Wing. I told them that Washington State has a statute prohibiting Medicaid discrimination. I don't think it stopped them. This same facility has some rooms that are much less desirable than others. One of our Medicaid clients was in a room where the air conditioner blew cold air on him constantly. (He developed pneumonia and died at that facility. No, the family did not sue, but they really would have liked to have him around longer.) The nursing home told me, We give Medicaid patients the least desirable rooms.The best rooms go to those who can pay for them."

"Even if you get the same care, it can be the little things that make a real difference in the quality of care. For example, having a telephone in one's room matters a great deal to most residents. Have your ever seen the line at the public phone in a SNF [skilled nursing facility]? Besides that, there's no privacy. The ability to have some spending money for the beverage cart that comes around in the afternoons is a big plus. There are lots of examples of the little extras that make life so enjoyable, I need not say more. "

ILL- New York Times (2 Oct 2001) Some experts say many seriously ill people who appear competent may actually have impaired abilities to make complicated medical decisions. Often, experts say, this impairment goes unrecognized, and regrettable decisions are made. Patients may refuse surgery or chemotherapy, only to have their diseases become life-threatening; they may consent to join experimental studies without fully understanding the risks; they may make life-and-death decisions like signing do-not-resuscitate orders. But other experts disagree, saying that even the most seriously ill patients have the capacity to make decisions, and that to think otherwise will throw health care back 20 or 30 years to a time when doctors paternalistically told patients what to do.

LTC (Center for Long Term Care 2001) Before 1988, Medicaid eligibility rules often caused community spouses of institutionalized recipients to become impoverished. The Medicare Catastrophic Coverage Act of 1988 (MCCA '88) eliminated this problem by allowing community spouses to retain substantial income and assets without causing their institutionalized spouses to lose Medicaid eligibility. The original income and asset allowances have increased with inflation for 13 years and now stand at up to $2,175 per month in income and $87,000 in assets, far above the poverty level. (Actually, much more--literally hundreds of thousands of dollars--can often be sheltered by using the "transfer assets before income" technique in states which allow it.)

MCCA '88 also contained a provision that guaranteed the institutionalized spouse's right to Medicaid nursing home benefits even if the community spouse withheld all support as long as the institutionalized spouse assigned his or her legal right to support to the state.

Some elder care attorneys opted to use this well-intentioned safeguard into a commonplace planning technique, a fountain of benefits for their well-to-do clients. They routinely encourage community spouses (1) to refuse to support their spouses on Medicaid, (2) to take all of the couple's money (less attorney's fees of course) leaving the institutionalized spouse totally impoverished, (3) to refuse to contribute anything toward the care of the institutionalized spouse, and (4) to plan early and carefully to avoid or minimize the state's later recovery of Medicaid expenses paid on behalf of the institutionalized spouse. In a nutshell: just say no, thumb your nose at the Medicaid authorities, make the taxpayers pay the bills, let the nursing home get by on starvation-level Medicaid reimbursements, and do whatever you can to dodge the responsibility to pay the system back someday.

Assessing Care of Vulnerable Elders (Annals of Internal Medicine (16 Oct 2001))

The Assessing Care of Vulnerable Elders (ACOVE) project endeavored to develop a comprehensive set of quality assessment tools for ill older persons. These quality indicators are presented in the supplement accompanying the October 16 issue of the Annals of Internal Medicine. The ACOVE project provides health care systems with a starting point in their efforts to measure the impact of innovations in the systems of care for older adults.

LTC- (2001) Over 98 percent of employees purchasing long-term care (LTC) insurance through their employers say the policies make them feel more secure about their future. The survey also reveals that 97 percent of policies are comprehensive (covering both nursing home and home care services), 88 percent of policies for the group market include inflation protection provisions and, on average, policies cover 6 years of long-term care.

Other key findings of the new HIAA survey include:

· Enrollees cited protecting assets; leaving an estate; preserving financial independence; and guaranteeing the affordability of needed services as the most important reasons for buying long-term care coverage.

· One-third of non-enrolled employees cited tax incentives for the purchase of long-term care coverage as the specific factor that would make them most interested in enrolling. Both enrollees and non-enrollees agreed that the single most important step the government should take concerning long-term care, is to put in place stronger tax incentives for the purchase of private long-term care coverage.

· Half of the non-enrollees indicated that they plan to enroll in a long-term care plan at some time in the future.

You have seen my past comments about the lack of nurses. Here is a direct impact- LOW ICU NURSE-TO-PATIENT RATIO LINKED TO INCREASED COMPLICATIONS AND COSTS: (American Journal of critical Care)Having fewer nurses in the intensive care unit (ICU) at night is associated with more patient complications and increased costsYou have seen my past comments about the lack of nurses.

So you want to go into a home and get coverage on Medicaid?: (2001) A nursing home in Virginia noted that it had a daily $33 shortfall between the cost of care for residents and the amount of Medicaid reimbursements it receives from the state; over the course of a year, the shortfall totals $1.3 million.

Recent studies indicate that more than a quarter of the nation's population currently over the age of 25 can anticipate at least one stay in a nursing or rehabilitation facility in their lifetime. (2001) Nearly 13 percent of the nation's population is age 65 and older. That segment is expected to grow to nearly 79 million persons by 2050, when it is expected to total 20 percent of the U.S. population. It is also estimated that the nursing facility population age 65 and over will grow to 6.6 million by 2050 (from approximately 1.5 million in 2001).

Elderly drugs: (JAMA, Contra Costa Times) About one in five seniors has been "inappropriately" prescribed drugs such as antidepressants and tranquilizers, an estimated seven million Americans ages 65 and older in 1996 were prescribed at least one of 33 drugs deemed inappropriate for use by seniors because of possible side effects

In 1996, 21.3% of "community-dwelling" seniors -- those not in institutions such as hospitals or nursing homes -- were prescribed an inappropriate medication. Based on the panel's classification, the study determined that 2.6% of seniors used at least one of the 11 drugs, including barbiturates, that "should always be avoided by elderly patients"; 9.1% used at least one of the eight drugs that "would rarely be appropriate"; and 13.3% used at least one of the 14 drugs "that have some [benefits] but are often misused."

"Elderly patients are falling and sustaining hip fractures because of the overuse and misuse of a wide variety of more modern agents, even those short half-life tranquilizers and hypnotics that would never make it onto any most wanted list of inappropriate drugs. Some patients are being labeled with diagnoses of new illnesses, or are simply viewed as 'just getting old' when they manifest adverse effects of anti-psychotic drugs used to excess"

LTC: (AARP 2002) More than half of Americans over age 45 say they are "somewhat familiar" with their options for long term care services, but the majority are uninformed about the costs and funding sources available for such care. The study, titled "The Costs of Long-Term Care: Public Perceptions Versus Reality," indicated 60% of respondents said they are "somewhat familiar" with their options for long term care, but only 15% could estimate the cost of nursing home care within 20% of the national average cost of $4,654. Nearly one-fourth said they did not know the cost, and 51% underestimated nursing home care costs. Thirty-one percent of those polled said they had insurance that would cover the cost of a long term stay in a nursing home.

More than half of respondents, including those who say they are "very familiar" with long term care, believe that Medicare will cover the cost of a long term stay, and about 25% say they would rely on the program to pay for such care." (Do you know how many days Medicare will cover you for? Basically 0 days. ZERO, NADA, NOTHING)

Per the National Work & Family Long-Term Care Solutions company, "We're talking about 24 million Medicare beneficiaries (63%); almost 74 million baby boomers (95%) who don't know - or think it's paid for.

Buying life insurance after a heart attack

Elderly (AMA 2002) About one in five elderly persons has been inappropriately prescribed drugs such as antidepressants and tranquilizers that can leave them dazed, groggy or susceptible to falls.

LTC: (2002) Only about 1.1 percent of the those 65-74 years of age live in nursing homes. Of those between 75-84, only 4.7 percent will be found in senior care facilities, and for those 85 and older, more than 80 percent either live by themselves or with family members.

According to the U.S. Administration on Aging, about half those 65 and older live in just nine states: California, Florida, New York, Pennsylvania, Ohio, Illinois, Michigan and New Jersey. Nationally the number of seniors is expected to double to 70 million in the next twenty years as the baby boom generation continues to age.

LTC:- The Life Insurance Marketing and Research Association (LIMRA) recently published a study titled "Long Term Care Insurance: Trends and Outlook." (2002) "Experts are cautiously optimistic about the outlook for long-term care insurance (LTCI) and expect moderate to strong growth. The reasons for the optimism are

* The market is untapped.

* The regulatory environment is favorable.

* Persons aged 50 and over are the fastest growing age group.

* The percentage of persons living to age 80 or more continues to increase.

* Public awareness for the need of LTCI is improving.

"The cautions center on these four challenges:

* Developing products that are adequately priced and are profitable

* Introducing too much regulatory change

* Improving product distribution

* Expanding consumer education and communication efforts

"Participants target married individuals over single persons. HIAA found that 70 percent of buyers in 2000 were married." Women reaching age 65 have a greater than 50 percent chance of needing extended care before death."

"A recent HIAA study on purchasing behaviors for LTCI underscores the need for increased consumer education. The survey notes that only 25 percent of individuals 55 and over think they or their family would be responsible for long-term care expenses."

According to the survey, 60% of respondents said they are "somewhat familiar" with their options for long-term care, but only 15% could estimate the cost of nursing home care within 20% of the national average cost of $4,654. Nearly one-fourth said they did not know the cost, and 51% underestimated nursing home care costs. Thirty-one percent of those polled said they had insurance that would cover the cost of a long-term stay in a nursing home. However, the Health Insurance Association of America estimates that just 6% of Americans have purchased long-term care insurance policies.

The "vast majority" of baby boomers "figure [long-term care insurance costs] will all be taken care of when we reach old age," he said, but with employer benefits that are "no longer very generous" for retirees, "ever-increasing" medical care costs and baby boomers' "allergic reaction" to the idea of raising taxes, it will be "almost impossible for the government to take care of all our long-term care needs."

LTC: (Fitch 2002) The long-term care industry is in transition, with funding, regulation, product design, distribution, and consumer awareness continuing to evolve. Fitch Ratings expects the more highly capitalized insurers and niche insurers, or those with better proprietary data, to grow stronger, while other companies that are unable to dedicate the resources to manage the risk will continue to enter and exit the market. Fitch believes long-term care insurance could become a highly rewarding niche for those companies that understand the risk and price correctly or a misfortune for those without the proper discipline.

LTC: "The Myth of Unaffordability: How Most Americans Should, Could and Would Buy Private Long-Term Care Insurance" http://www.centerltc.com/pubs/Myth%20Report.pdf. (2002)

Nurses (Spooner2002) Nearly 60% of the RN work force is over 40 years of age and the percentage of nurses under 30 has fallen 40% since 1980. 10% of falls occur in health care institutions (undoubtedly more since they go unreported) and it is due in large measure to the lack of trained aides and nurses. The understaffing of hospitals occurs in an environment where, according to the 199 National Hospital Discharge Survey, patients over 65 years of age accounted for 48% of discharges and 48% of hospital care days.

Weekends and, evenings and holidays are particularly hazardous. Increasingly, family and friends are staying in hospitals to ensure that the patient is accompanied when out of bed or in the bathroom.

LTC Medicaid: (2002) A recent BDO Seidman study shows that nursing homes in Washington lose an average of $11.96 every day on every Medicaid-funded resident, creating an annual shortfall of more than $61 million.

"Nursing Homes: Many Shortcomings Exist in Efforts to Protect Residents from Abuse" (Elder Law Bulletin) (GAO-02-448T, 4 Mar 2002), at http://www.gao.gov/new.items/d02448t.pdf. In this report for the Committee hearing, Leslie G. Aronovitz, Director, Health Care Program Administration and Integrity Issues, testified that, of the homes visited, state authorities often were not immediately informed of abuse complaints. Local law enforcement agencies have limited roles in addressing abuse cases and had little knowledge of the survey agency's investigations. For those cases in which law enforcement is involved, the physical and mental impairments of the resident make it difficult to develop and press a case. Early intervention by a state's Medicaid Fraud Control Unit was helpful in achieving convictions, but the early intervention does not always happen.

There is a lack of uniformity among states as to what is considered abuse. There are gaps in state abuse registries since information about abuse committed by aides in other states is not included. Furthermore, the registries do not list uncertified or unlicensed workers, resulting in employment of abusers by some facilities. The report noted difficulties in determining the extent of abuse occurring because of these and other reasons (such as reluctance of the victim to report abuse) and concluded that the Centers for Medicare & Medicaid Services (CMS) could take more steps to insure the protection of residents.

The detailed report on which this testimony was based was issued on March 6. GAO report, "Nursing Homes: More Can Be Done to Protect Residents From Abuse" (6 Mar 2002) at http://aging.senate.gov/hr78gao.pdf. The conclusions reached: residents need quality care and protection from abuse. Those abused need immediate referral of the abuse complaint to the appropriate authority for prompt investigation. Abusers should be prosecuted, and survey agencies should recommend to CMS the imposition of available administrative sanctions against those abusers.

The report notes that CMS has made some important progress in protecting residents, but more needs to be done. The recommendations to CMS: ensure survey agencies immediately notify the local law enforcement agency or Medicaid Fraud Unit of allegations of abuse, or confirmed complaints of abuse; step up the education campaign on reporting abuse; review state policies and practices for complying with employment requirements; improve the definition of abuse and ensure it is applied consistently and appropriately by the states; and shorten time for agencies to determine whether to include an abuse finding in the registry.

Interestingly, in a January 2002 report the United Nations Economic and Social Council has identified abuse of the elderly as a "human rights issue" to be addressed by the world community. (See "Abuse of older persons: recognizing and responding to abuse of older persons in a global context" at http://www.un.org/ageing/ecn52002pc2eng.pdf.)

Another report recently released and reported in the February 26 eBulletin (http://www.tn-elderlaw.com/telb/020226.html) reviewed the Medicare Web site about nursing homes at Nursing Home Compare. (See http://www.medicare.gov/NHCompare/home.asp.)

Medicare has embarked on a publicity campaign to inform beneficiaries about the services available to them and to direct them to the Medicare Web site for information about their services. According to a report prepared for Rep. Henry Waxman, D-Calif., and Sen. Charles Grassley, R-Iowa, by a Staff Committee on Government Reform, the information on the Nursing Home Compare Web site has serious flaws. (See http://www.house.gov/reform/min/pdfs/pdf_inves/pdf_nursing_compare_rep.pdf.)

According to the report, Nursing Home Compare contains violations that are found in the annual inspection, but does not contain violations from complaint investigations. A 13-month study of violations found that a significant number of serious violations that were both substantiated and resulted in citations were not in the database. As such, the information given to consumers is not accurate and may be misleading. The problem is compounded because of the large number of visitors to the site. According to the report, Nursing Home Compare is one of the most popular of the Medicare Web pages, receiving almost 100,000 visits per month. (See the February 26, 2002, eBulletin, at http://www.tn-elderlaw.com/telb/020226.html)

In addition to these government reports, long-term care facilities report problems in obtaining insurance. One legislative response to this situation has been statutory reform to cap the damages available under statutes. Last year Florida became the most recent state to reform its nursing home statute. The result was capping punitive damages on a scale, with no cap in the most egregious of cases. (See the May 7, 2001, eBulletin, at http://www.tn-elderlaw.com/telb/010507.html. See also Florida statutes, at http://www.leg.state.fl.us/Statutes/index.cfm?Tab=statutes&submenu=1.)

Despite the reform, anecdotal reports are surfacing of facilities still being unable to find insurance. (See, for example, "Insurance crisis widens," Philadelphia Business Journal (1 Mar 2002), at http://philadelphia.bizjournals.com/philadelphia/stories/2002/03/04/story1.html.) Reform efforts are underway in other states to cap damages and may prove likely, if the Florida model of reform proves successful.

Quality care continues to be a major issue for residents and their families. One proposal is to allow cameras in residents' rooms, a development we first reported on as long ago as the September 16, 1999, eBulletin (see http://www.tn-elderlaw.com/telb/990916.html). Texas passed a law last year allowing cameras in residents' rooms and the Maryland legislature approved a pilot program to allow cameras in residents' rooms in three facilities, with a report to the Maryland legislature in January 2003. A few other states are reviewing this issue, and a bill is pending before the Florida legislature. (See http://www.fdhc.state.fl.us/cinh/docs/cinhreport1_2002.pdf.)

Staffing continues to be an important topic of much debate. As reported in the February 26 eBulletin (http://www.tn-elderlaw.com/telb/020226.html), HHS found in a study that more than 90% of nursing homes lack enough workers to provide proper care of residents. However, the Administration has no plans to set minimum staffing levels for nursing homes, but instead intends just to publicize them, sending Congress the final report and recommendations within a month.

As we reported in last week's eBulletin (http://www.tn-elderlaw.com/telb/020305.html), the number of people becoming nursing home administrators has dropped sharply in the last four years, threatening a different crisis in long-term care.

Another crisis in caring for the elderly was the subject of a February 27 Senate Special Committee on Aging hearing, which examined the urgent need for more geriatric training for healthcare professionals. The panel heard from experts in the field of gerontology and geriatric medicine, aging advocates, and a patient receiving care from health care professionals both trained and untrained in geriatrics. (See http://www.senate.gov/~aging/hr77.htm for testimony of the witnesses and the Alliance for Aging Research report, "Medical Never-Never Land: 10 Reasons Why America's Not Ready for the Coming Age Boom,", at http://www.agingresearch.org/advocacy/geriatrics/02016_aar_geriatrics_text.pdf.)

As we struggle with issues of providing and paying for quality long-term care, elder law attorneys often must counsel their clients about these issues. There are excellent facilities that provide quality care, and giving clients the information and tools to help the client choose the right nursing home for their relative is important. With reports being released about substandard care, inadequate staffing, and inaccurate information about facilities, it is becoming increasingly difficult for clients to make choices. Clients need to be kept up to date with the most current, accurate information available to them in determining how best to choose a nursing home and to pay for long-term care.

The elder law attorney can draw on his or her experiences in counseling the client and give the client some tools to aid in making choices. For example, a checklist to guide the client through the process of selecting a long-term care facility can be very valuable in helping the client weigh all the different factors in choosing a nursing home. Make one part of the client package. Explain to the client about resident rights, quality of care, and the care planning process. Explain how the inspection process works and how to find information about the facility's record of care. Provide the client with telephone numbers for licensing agencies, state ombudsman, and others. Develop brochures or reference materials for clients to take home and consult at later dates. Form alliances with geriatric care managers and other persons who are connected to the long-term care network to whom you can refer clients who are looking for help in choosing a nursing home. If you can, consider adding geriatric social services or "elder care" to the services your office provides to your clients and their families. All this and more can help clients in making decisions regarding long-term care.

Long term care: (2002) More than 90% of U.S. nursing homes have too few employees to take "proper care" of patients, a shortage that is expected to worsen in the future, according to a new HHS study. The New York Times reports that the report found "strong and compelling" evidence that nursing homes with lower ratios of staff to patients provide "substandard care" more often than nursing homes with higher ratios of staff to patients. Patients in nursing homes with lower staff-to-patient ratios suffer bedsores, malnutrition, weight loss, dehydration, pneumonia and serious blood-borne infections more often, the report found. According to the report, most nursing home patients require an average of 4.1 hours of care per day -- 2.8 hours from nurse's aides and 1.3 hours from registered nurses or licensed practical nurses. Dr. John Schnelle, co-author of the report, said that under that standard, nursing homes would need to have one nurse's aide for every five or six patients from 7 a.m. to 11 p.m. Many nursing homes today have only one nurse's aide for every eight to 14 patients, he said. The report found that more than 40% of nursing homes would need to increase their nurse aide staffing by 50% or more in order to reach the "minimum threshold associated with their resident population." It also found that nursing homes would have to hire 77,000 to 137,000 registered nurses, 22,000 to 27,000 licensed practical nurses and 181,000 to 310,000 nurse's aides to reach the recommended staffing levels. Reaching "adequate" staffing levels would cost $7.6 billion per year, an 8% increase over current spending levels, the report found. Congress ordered HHS to conduct the study in a 1990 law. The Clinton administration issued preliminary findings in July 2000, and the Bush administration plans to send Congress a final report and recommendations within a month.

I repeat- if you want good care and you have money, consider a LTC policy. You simply can't get the coverage needed if you solely depend on Medicaid.

LTC Policies (HIAA 2002) The number of Americans who have purchased insurance against the catastrophic costs of long-term care has more than tripled over the last decade, from 1.9 million in 1990 to 6.8 million in 1999. Since 1987, the year HIAA began systematically tracking long-term care insurance, the market has grown by an average of 18 percent a year. More than 750,000 policies were sold in 1999, up from 538,000 in 1998, a 40 percent increase. A total of 124 companies sold long-term care insurance in 1999, with premium volume for policies sold in the individual and group association market totaling roughly $789 million, according to "Long-Term Care Insurance in 1998-1999."

LTC Coverage: (HIAA 2002) The number of Americans who have purchased insurance against the catastrophic costs of long-term care has more than tripled over the last decade, from 1.9 million in 1990 to 6.8 million in 1999. Since 1987, the year HIAA began systematically tracking long-term care insurance, the market has grown by an average of 18 percent a year. More than 750,000 policies were sold in 1999, up from 538,000 in 1998, a 40 percent increase. A total of 124 companies sold long-term care insurance in 1999, with premium volume for policies sold in the individual and group association market totaling roughly $789 million.

The number of employers offering long-term care insurance as an employee benefit skyrocketed over the last decade, from 135 in 1990 to more than 3,200 in 1999. The employer-sponsored market accounted for 25 percent of long-term care insurance sales in 1999, and the total number of policies sold in this market passed 1 million.

Average premiums in 1999 for basic long-term care insurance were $300 a year for a 40-year-old, $409 a year for a 50-year-old, and $1,002 a year for a 65-year-old. -- The average age of those who purchased long-term care insurance in the individual market fell from 72 in 1990 to 65 in 1999. The average age of those who purchase long-term care insurance in the employer-sponsored market is even lower, 43. -- All companies offer plans covering not only nursing homes but also assisted living facilities, home health care, hospice care, respite care, and alternate care services. -- Nine of the top 10 sellers no longer have a pre-existing condition limitation as long as pertinent medical conditions are disclosed at the time of application.

Home Aides: Your Home Health Care Aide: Establishing A Positive Relationship (Kim Champion)

You've made the decision to let an aide come into your home to assist. That was hard enough. Now you re getting apprehensive about what to expect when the aide arrives for work. If you don't have experience with in-home assistance, all sorts of "worst case scenarios" are whirling about in your head. And then there are the questions. What should you do if you don't like the aide?

How should you approach problems? Who supervises the aide?Assuming that you have hired an aide from a home health care agency, you can expect a lot of support in easing your anxieties. It is the agency's job to answer your questions in advance and resolve any issues that arise. The key to facilitating your satisfaction and comfort is good communication with the agency management and with your aide.

Here are a few tips for establishing positive relationships with your home health care professionals:

Be completely honest about your needs

Overcome any embarrassment or guilt associated with describing why you need help and what kind of help you need. Remember that you are dealing with professionals who have helped a variety of clients. They are experienced in meeting the needs of people just like you. Home Health Care professionals are prepared to deal with tough situations such as Alzheimer's, alcoholism, Parkinson's, strokes, incontinence and stressful family circumstances.

State your preferences from the start

The best way to get exactly what you want is to be specific. Give a detailed request to the agency so that the aide they send will meet your needs. Items to include are your household rules, such as "no smoking" or "kosher kitchen". Also express your daily routines and how to follow the, such as "up at 7 a.m.", "breakfast first, medicine second, shower last" , "I need privacy from 9 a.m. to 11 a.m.", "transportation to salon every Friday, using employee's car".

Give feedback to the agency on a timely basis

"Nip it in the bud," is good advice. Most problems start out small and can be best resolved when addressed promptly. If you are experiencing a problem with the aide, call the agency. This benefits you in two ways: you do not have to be involved in reprimanding the aide, and it prompts the agency to diplomatically resolve the problem. Employee supervision is the responsibility of the agency. If the problem cannot be resolved to your satisfaction, request the agency send a different aide. The agency will handle the hiring and firing for you.

If you start off with honesty and communication, having a home health care aide will be a successful and beneficial experience.

Women and LTC:

LTC: (2002) A survey of nursing home costs commissioned by GE Long Term Care Insurance shows that spending a year in a nursing home in the ten most expensive areas of the country now carries a price tag of roughly $80,000 or more. Two other statistics bring the significance of GE's survey's findings into sharp focus: roughly 40 percent of those reaching the age of 70 are expected to need some type of long term care during the rest of their lives; yet only seven percent of Americans have done any planning at all for their long term care needs. According to the GE Long Term Care Insurance Nursing Home Survey, the national annual average cost of a year in a nursing home is $54,900. The survey evaluated the cost of assistance in a nursing home with the activities of daily living for a person suffering from a debilitation such as Parkinson's disease. It did not include costs for therapy, rehabilitation, or medications.

The ten most expensive areas in which to receive nursing home care are: -- 1 Alaska $163,400, -- 2 New York City metro area $106,500, -- 3 Connecticut $93,500, -- 4 New York state (outside NYC) $ 90,000, -- 5 District of Columbia $88,000, -- 6 Hawaii $86,000, -- 7 Massachusetts (outside Boston) $ 82,500, -- 8 Boston metro area $82,200 -- 9 New Jersey $80,900, -- 10 Philadelphia metro area $79,900 The lowest average annual cost was in Louisiana, at $36,000 per year. The survey also revealed that costs varied widely, from a low of $52.14 per day at one nursing home in Montana to a high of $704 per day at a facility located on an island in Alaska. The survey did not evaluate the cost of assistance with activities of daily living provided either in the home or other types of facilities, including adult day care centers or assisted care facilities.

LTC: (2002) The number of Americans who have purchased insurance against the catastrophic costs of long-term care has more than tripled over the last decade, from 1.9 million in 1990 to 6.8 million in 1999, according to a survey released by HIAA.

The Older Age Underwriting Practices Subcommittee of the Society's Committee on Life Insurance Mortality & Underwriting Surveys has completed their report, which investigates how underwriting practices differ for the older age insurance market. (PDF)

Memory Loss In The Elderly – What’s Normal And What’s Not? Memory loss and dementia are common in the elderly, but the significance of memory complaints in insurance applicants may be difficult to determine

Monthly Maximum" Home Care Benefits Defined Some long term care insurance companies pay benefits for home care "based on a monthly maximum", providing a very unique and valuable benefit to their policyholders. It may seem simple enough, but oftentimes the true value of this benefit is overlooked or misunderstood.

LTC Policies More than 750,000 policies were sold in 1999, up from 538,000 in 1998, a 40 percent increase. A total of 124 companies sold long-term care insurance in 1999, with premium volume for policies sold in the individual and group association market totaling roughly $789 million, according to “Long-Term Care Insurance in 1998-1999.”

Average premiums in 1999 for basic long-term care insurance were $300 a year for a 40-year-old, $409 a year for a 50-year-old, and $1,002 a year for a 65-year-old.—The average age of those who purchased long-term care insurance in the individual market fell from 72 in 1990 to 65 in 1999. The average age of those who purchase long-term care insurance in the employer-sponsored market is even lower, 43.—All companies offer plans covering not only nursing homes but also assisted living facilities, home health care, hospice care, respite care, and alternate care services.—Nine of the top 10 sellers no longer have a pre-existing condition limitation as long as pertinent medical conditions are disclosed at the time of application.

LTC: (GE Capital 2002) Spending a year in a nursing home in the ten most expensive areas of the country now carries a price tag of roughly $80,000 or more. Two other statistics bring the significance of GE’s survey’s findings into sharp focus: roughly 40 percent of those reaching the age of 70 are expected to need some type of long term care during the rest of their lives; yet only seven percent of Americans have done any planning at all for their long term care needs. According to the GE Long Term Care Insurance Nursing Home Survey, the national annual average cost of a year in a nursing home is $54,900.

Medicare: (2002)Medicare will not go broke until 2030, a year later than previously predicted, but its future viability is still very much at risk.

Nursing homes: (2002) For-profit nursing facilities could face a staggering round of bankruptcies next year if the US Congress does not prevent cuts in their Medicare payment

Nursing Home Care:

Placing A Loved One Into A Nursing Home By Carolyn Haynali

Caring For An Elder From Far Away: Geriatric Care Managers

Top Ten Ways To Care For Yourself

How your blood pressure and cholesterol affect your life insurance costs

LTC: (Center for LTC 2002) "Long-term care providers report unprecedented vacancies and turnover rates for paraprofessional workers. Increasingly, the media, federal, and state policymakers and the industry itself are beginning to acknowledge the labor shortage crisis and its potentially negative consequences for quality of care and quality of life. These shortages are likely to worsen over time as demand increases. . .

"The Long-Term Care Frontline Workforce

"Most paid providers of long-term care are paraprofessional workers. After informal caregivers, these workers are the most essential component in helping older persons and younger people with disabilities maintain some level of function and quality of life. According to recent U.S. Bureau of Labor Statistics (BLS) data, nursing assistants held about 750,000 jobs in nursing homes in 1998, while home health and personal care aides held about 746,000 jobs in that same year. Like informal caregivers, the overwhelming majority of frontline long-term care workers are women. About 55 percent of nursing assistants are white, 35 percent are black, and 10 percent are Hispanic. Most workers are relatively disadvantaged economically and have low levels of educational attainment. While these paraprofessional workers are engaged in physically and emotionally demanding work, they are among the lowest paid in the service industry, making little more than the minimum wage. National data on the number of workers with health benefits is lacking, but state and local studies suggest the rate of uninsurance is high.

"What Is the Problem?

"The severe shortage of nursing assistants, home health and home care aides, and other paraprofessional workers is the primary trend influencing the current wave of concern about the long-term care workforce. National data on turnover rates show wide variation, depending on the source of the data: One source suggests that turnover rates average about 45 percent for nursing homes and about 10 percent for home health programs, while other data place average annual nursing home turnover at over 100 percent a year. High rates of staff vacancies and turnover have negative effects on providers, consumers, and workers: The cost to providers of replacing workers is high; quality of care may suffer; and workers in under-staffed environments may suffer higher rates of injury.

"The future availability of frontline workers does not look promising. There will be an unprecedented increase in the size of the elderly population as the 'baby boom' generation ages. BLS estimates that, in response to this rising demand, personal and home care assistance will be the fourth-fastest growing occupation by 2006, with a dramatic 84.7 percent growth rate expected. The number of home health aides is expected to increase by 74.6 percent and that of nursing assistants by 25.4 per-cent. While these projections suggest that the demand for workers will increase, the actual number of jobs may be tempered by the rate of economic growth and the extent to which purchasers are willing or able to pay. At the same time, as baby boomers approach old age, the pool of middle-aged women who have traditionally provided care will also be substantially smaller. Finally, with very low population and labor force growth, even a 'normal' business cycle recession would likely yield only a modest increase in the number of unemployed who could become part of a frontline worker pool.

"Factors Affecting the Supply and Quality of Workers

"The success of efforts to recruit, retain, and maintain a long-term care workforce is dependent on a variety of interdependent factors. One important influence on individuals' decisions to enter and remain in the long-term care field is how society values the job. Frontline worker jobs in long-term care are viewed by the public as low-wage, unpleasant occupations that involve primarily maid services and care of incontinent, cognitively unaware old people. This image is exacerbated by media reports that feature poor quality care by providers. .

"Health and long-term care policies also significantly affect workforce recruitment and retention. Medicare and Medicaid account for almost three-fifths of long-term care expenditures and therefore play a substantial role in determining provider wages, benefits, and training opportunities. Regulatory policy on long-term care focuses primarily on protecting consumers, rather than on responding to workers' concerns.

"Labor policy plays an important role in determining the size of the pool of frontline long-term care workers. The federal government invests more than $8 billion annually to prepare primarily low-income and unemployed individuals for new and better jobs. Ironically, state and federal employment agencies indirectly prevent the long-term care industry from participating in training support programs by requiring that program graduates secure wages that are higher than typical frontline worker salaries. While these policies are designed to protect trainees from being shunted into poverty-level jobs, they essentially preclude graduates from entering the paraprofessional long-term care labor force. The federal Work Investment Act of 2000 does not include the same requirements, but the effects of the new law are unclear. . .

"Given the current labor shortage and gloomy projections about the future pool of workers, many providers have expressed interest in immigration as a tool for expanding the potential labor pool. But immigration of low-wage workers would have to substantially increase to keep pace with population aging and new long-term care demands. Policymakers must recognize that having low-skilled immigrants fill entry-level jobs in the long-term care industry would likely mean a sharp cultural discontinuity between the client and the caregiver. . .

Sad commentary on our legal system: (2002) Federal Tax Dollars Meant For Senior Care Instead Diverted to Trial Lawyers FL, TX, AR, AL, MS, GA, CA, WV lead nation in watching essential health care dollars go towards higher lawsuit, insurance costs - not improved patient care.

* The average long term care GL/PL cost per skilled nursing bed has increased at an annual rate of 24% from $240 in 1990 to $2,360 in 2001. National costs are now ten times higher than they were in the early 1990s;

* GL/PL costs have absorbed 20% ($3.78) of the $18.47 increase in the countrywide average Medicaid reimbursement rate from 1995 to 2000;

* Almost half of the total amount of claim costs paid for GL/PL claims in the long term care industry is going directly to attorneys.

LTC (Tony Stuer 2002) The average cost of a nursing home stay in the United States is $168 per day for a private room, but there are large variations from metropolitan area to metropolitan area, according to a recent market study released by the MetLife Mature Market Institute. Stamford, Connecticut is the costliest at $347 per day while the Shreveport, Louisiana area is the lowest at $88, with prices dependent on supply and demand and the cost of living. The study found that the cost of a home health care aide averaged $18 per hour nationally. Home health care is most expensive in Anchorage, Alaska at $27 per hour and least expensive in Montgomery, Alabama at $12 per hour. Sandra Timmermann, Ed.D., Director of the MetLife Mature Market Institute.

Here are the average daily nursing home costs per regions studied in California for a private room: Los Angeles, CA - $175; San Diego, CA - $188 and San Francisco, CA - $250. The following are the average hourly home health care aide costs per regions studied in California from licensed agencies: Los Angeles, CA- $15; San Diego, CA- $18 and San Francisco, CA- $20. The two-part survey of nursing homes and home care agencies in all 50 states was conducted by telephone in January and February 2002. In each geographic area, 10% of nursing homes/home care agencies were contacted, for a total of 482 nursing homes and 521 home care agencies surveyed. According to the 2000 U.S. Census, the over-65 population has increased by 12% since 1990. Although the under-65 population increased by 13.3% for the same time period, the number of adults aged 45 to 64 increased 34%. These are the adults who will turn 65 over the next 20 years. Life expectancy after age 65 has now increased to 17.9 years, up from 1940 when life expectancy after 65 was only 13 extra years. The longer people live, the greater the chances are that chronic conditions may develop, resulting in an increased need for assistance with Activities of Daily Living or ADLs. These include toileting, transferring, bathing, dressing, eating and continence. Currently, 6.4 million people aged 65 or older need long-term care; one in two over age 85 require care and assistance with ADLs. As a result, the need for both nursing home and home care is great. A study by the U.S. Department of Health and Human Services reports that people age 65 or older face a 40% lifetime risk of entering a nursing home.

Standard Rates for a Single Person (2002)

Company Age 55 Age 65 Age 75

Fed Plan $912 $ 1,421 $2,940

UNUM $664 $1,260 $2,926

Fortis $822 $1,456 $3,547

Transamerica $846 $1,556 $3,522

Prudential $909 $1,557 $3,707

CNA $965 $1,756 $4,068

John Hancock $990 $1,650 $3,840

GE Capital $1,040 $1,910 $4,410

Preferred Rates* for a Single Person

Company Age 55 Age 65 Age 75

Fed Plan $912 $1,421 $2,940

UNUM $531 $1,008 $2,341

Fortis $697 $1,238 $3,016

Transamerica $762 $1,401 $3,170

Prudential $772 $1,323 $3,151

CNA $819 $1,493 $3,458

John Hancock $842 $1,403 $3,264

GE Capital $936 $1,719 $3,969

Standard Rates for a Married Individual**

Company Age 55 Age 65 Age 75

Fed Plan $912 $1,421 $2,940

UNUM $598 $1,134 $2,633

Fortis $698 $1,238 $3,015

Transamerica $762 $1,401 $3,170

CNA $772 $1,405 $3,254

GE Capital $780 $1,433 $3,308

John Hancock $792 $1,320 $3,072

Prudential $818 $1,401 $3,336

Preferred Rates for a Married Individual**

Company Age 55 Age 65 Age 75

Fed Plan $912 $1,421 $2,940

UNUM $498 $945 $2,195

Fortis $592 $1,052 $2,564

John Hancock $644 $1,073 $2,496

CNA $655 $1,194 $2,767

GE Capital $676 $1,242 $2,867

Transamerica $677 $1,245 $2,818

Prudential $681 $1,168 $2,780

*Note: The Federal group policy does not offer a preferred-health discount for people in above-average health.

** Note: The Federal group policy does not offer a preferred-health discount for people in above-average health, nor do they offer a discount for married couples.

LTC: the average LTC facility patient takes seven to nine medications per day. The marketplace for pharmacy services in LTC and assisted living facilities is currently estimated to over $8.0 Billion.

Hospitals Step Up Recruitment Efforts To Offset Nursing Shortage (2002) In the courses I teach for LTC, I note that some costs for services were inflated due to the use of the term "reasonable" Here is a story that shows what can go wrong and why Medicare blew up in many areas

In a front-page story on May 24, the Wall Street Journal profiles Integrated Health Services Inc., a nursing home "empire" that profited from a loophole in federal Medicare law but collapsed when the government made a "sudden and dramatic shift" in the way it reimburses care for the elderly. Founded by Dr. Robert Elkins in the late 1980s, IHS relied almost solely on Medicare reimbursements for what is known as subacute care -- turning nursing homes into "minihospitals" for seniors who would otherwise receive care in hospitals. The company filed claims through a Medicare rule allowing "reasonable costs" for providing additional care and was reimbursed like a hospital instead of a nursing home. The tactic allowed the nursing home chain to inflate its average Medicare reimbursement from $300 or $400 a day up to $600 or $700. IHS was also able to receive higher reimbursements from private insurers, who were eager to transfer patients to subacute facilities, where care costs half of that in a hospital. Hospitals, in turn, "loved" the system, as it shifted "costly patients out of their beds." The company "found a hole in Medicare policy through which one could drive a truck," former CMS Administrator Bruce Vladeck said. From 1991 to 1997, IHS' revenue grew from $202 million to about $2 billion. In 1998, however, Medicare "pulled the plug" on the payment loophole over fears that the entire nursing home industry was going bankrupt. Medicare began paying nursing homes a set rate per patient that varies based on a patient's health. As a result, the average reimbursement to nursing homes dropped 25%, but the decline was much steeper at IHS, which had "thrived" on the reasonable cost rule. The change also impacted patients, as care had to be reduced to meet the lower payments, the Journal reports. In 2000, IHS filed for bankruptcy protection. Soon after, Elkins was ousted and the company became the subject of a Medicare fraud investigation

Nursing shortage: (2002) There are about 126,000 jobs unfulfilled about 12% of capacity. Hospitals with the highest number of registered nurses had an average of 2.7 patients per registered nurse, while hospitals with the lowest number of registered nurses had an average of 3.8 patients per registered nurse

Patients in the highest-staffed hospitals experienced cardiac arrest and shock 9.4% less often than patients in the lowest-staffed hospitals.

Patients in the highest-staffed hospitals had 9% fewer urinary tract infections, 6.4% fewer cases of hospital-acquired pneumonia and 5% fewer episodes of stomach or intestinal bleeding than patients in the lowest-staffed hospitals.

Patients in the highest-staffed hospitals spent on average four hours less in the hospital than those in the lowest-staffed hospitals.

Surgical patients in the highest-staffed hospitals were 6% less likely to die from surgical complications, including shock and sepsis, than surgical patients in the lowest-staffed hospitals (Pelton, Baltimore Sun, 5/30).

The "failure to rescue" death rate -- patients who died from conditions that might have been reversed, including pneumonia, shock, cardiac arrest, upper gastrointestinal bleeding, sepsis or a blood clot -- for patients in the lowest-staffed hospitals was 2.5% higher than for medical patients in the highest-staffed hospitals (New York Times, 5/30).

Assisted Living: (Met Life 2002) The average cost of an assisted living facility in the U.S. is $2,159 per month, or $25,908 per year. The study produced for the MetLife Mature Market Institute by LifeCare, Inc., found that the highest monthly average was New York City at $3,696 while the lowest was Jackson, Mississippi at $592.

Assisted living facilities provide a way for older adults to retain a relatively independent lifestyle in a residential atmosphere with some assistance and support. While the types and sizes of facilities vary, all provide meals in a social setting and are staffed with people who can provide different levels of help with Activities of Daily Living (ADL's) like bathing and dressing. They can range from a small home to a large apartment-style complex.

LOCALITY AVERAGE COST(1) LOCALITY AVERAGE COST(1)

Statewide Total, AK $2,379.20 Jackson, MS $592.00

Birmingham, AL $1,444.00 Billings, MT $2,432.00

Montgomery, AL $1,811.00 Charlotte, NC $2,687.00

Little Rock, AR $1,121.11 Raleigh, NC $2,454.40

Phoenix, AZ $1,705.00 Statewide Total, ND $1,445.80

Tucson, AZ $2,364.62 Omaha, NE $1,977.90

Los Angeles, CA $1,524.64 Manchester, NH $3,334.00

San Diego, CA $1,639.79 Bridgewater, NJ $3,083.80

San Francisco, CA $3,071.15 Cherry Hill, NJ $2,571.40

Colorado Springs, CO $1,725.00 Albuquerque, NM $1,720.00

Denver, CO $1,892.80 Las Vegas, NV $1,433.75

Hartford, CT $2,324.00 New York, NY $3,696.66

Stamford, CT $3,564.00 Rochester, NY $2,312.00

Washington, DC $2,974.70 Syracuse, NY $2,183.00

Wilmington, DE $3,369.50 Akron, OH $2,556.60

Jacksonville, FL $1,622.00 Cleveland, OH $2,439.00

Miami, FL $1,410.00 Columbus, OH $2,832.50

Orlando, FL $1,560.00 Oklahoma City, OK $1,943.50

Alpharetta, GA $2,070.00 Tulsa, OK $2,398.00

Atlanta, GA $2,234.63 Eugene, OR $2,255.00

Honolulu, HI $3,250.20 Portland, OR $1,911.00

Des Moines, IA $2,109.00 Philadelphia, PA $1,910.64

Boise, ID $2,530.00 Pittsburgh, PA $2,147.75

Chicago, IL $2,783.80 Scranton, PA $1,354.20

Elgin, IL $2,794.40 Providence, RI $2,320.00

Highland Park, IL $3,084.00 Charleston, SC $1,903.00

Peoria, IL $2,147.20 Columbia, SC $2,382.00

Fort Wayne, IN $2,632.00 Dell Rapids, SD $1,856.00

Indianapolis, IN $1,677.50 Memphis, TN $2,045.00

Wichita, KS $2,082.50 Nashville, TN $1,602.00

Lexington, KY $2,318.50 Dallas, TX $1,372.00

Louisville, KY $2,001.66 Fort Worth, TX $1,755.00

New Orleans, LA $2,164.90 Houston, TX $1,552.00

Shreveport, LA $1,380.00 Salt Lake City, UT $1,694.00

Boston, MA $2,804.00 Alexandria, VA $3,011.20

Worcester, MA $2,635.00 Arlington, VA $2,716.10

Baltimore, MD $2,045.00 Richmond, VA $1,750.50

Silver Spring, MD $2,775.00 Rutland, VT $1,768.00

Brunswick, ME $2,325.20 Seattle, WA $2,189.00

Detroit, MI $1,179.00 Spokane, WA $2,660.00

Grand Rapids, MI $1,509.72 Madison, WI $2,273.50

Minneapolis, MN $2,090.85 Milwaukee, WI $2,282.80

Saint Paul, MN $2,766.60 Statewide Total, WV $1,775.00

Kansas City, MO $1,337.00 Statewide Total, WY $1,242.50

Saint Louis, MO $2,113.20

(1) There may be extra charges for ADL assistance beyond the base cost, or for Alzheimer's disease or related conditions.

According to a 2001 National Center for Assisted Living survey, approximately two-thirds of assisted living residents paid for their stay out-of-pocket and about 13.5% paid with Supplementary Security Income (SSI) funds. Medicare does not cover assisted living.

Strategies for Culturally Effective End-of-Life Care As a result of profound worldwide demographic change, physicians will increasingly care for patients from cultural backgrounds other than their own. Differences in beliefs, values, and traditional health care practices are of particular relevance at the end of life. Health care providers and patients and families may not have shared understandings of the meaning of illness or death and may not agree on the best strategies to plan for the end of life or to alleviate pain and suffering. Good end-of-life care may be complicated by disagreements between physicians and patients, difficult interactions, or decisions the physician does not understand. Challenges may result from cultural differences between the patient's background and traditional medical practice. Values so ingrained in physicians as to be unquestioned may be alien to patients from different backgrounds. Physicians need to be sensitive to cultural differences and to develop the skills necessary to work with patients from diverse backgrounds.

LTC: (2002) it’s estimated that 40% of the market will never have the need for private LTC insurance. This fact results from a number of alternatives that include Medicaid and other Federal assistance programs, services available from informal caregivers, self-insurance, reverse mortgages, annuities, life insurance, and death itself.

But, since no one knows who will be in that 40%, most people do need to be looking into this issue and considering their options, including the option to buy private coverage.

Falling down: Some 12 million elderly Americans fall down each year, resulting in billions of dollars in medical bills. 25% of the elderly who fracture a hip during a fall -- among the most common injuries -- die within one year, and 75% never regain the quality of life they had before the fall.

De-Stigmatizing Urinary Incontinence

Dealing with Difficult Alzheimers Behavior

"HHS Programs and Initiatives for an Aging America"

This Fact Sheet from the U. S. Department of Health and Human Services summarizes various government programs and initiatives for elderly Americans.

Nursing home clothing: (2002) If you, a loved one, or a client is coping with an illness or condition which has made dressing difficult, then check this site.

Everyday tasks such as buttoning, zipping, snapping or tying may require assistance as we grow older. Normal dressing skills can pose new difficulties due to arthritis, Parkinson’s disease, stroke, Alzheimer’s disease, multiple sclerososis and ALS, just to name a few. Complications such as incontinence, edema or fragile skin can make traditional clothing impractical, as well.

Nursing Shortage: CBS' '2002 60 Minutes' Reports on U.S. Nursing Shortage, International Recruiting Efforts

Caregivers: (WSJ 2002) Demand for home-health and nursing care is projected to grow 50% in the next decade, far outstripping supply.

LTC asset transfer: (2002) "Current transfer of asset practices, although perfectly legal, will cost the Medicaid program more than $87 million during the next five years. . . . The $87 million cost is borne by a program designed to serve the neediest individuals and is ultimately paid by the public.

LTC: (2002) The number of Americans who have purchased long term care insurance more than tripled over the last decade, going from 1.9 million in 1990 to 6.8 million in 1999, according to a survey released by the Health Insurance Association of America. HIAA in 1987 began tracking sales of LTC insurance. Since then the market has grown annually by an average of 18%. More than 750,000 policies were sold in 1999, up 40% from 538,000 in 1998, HIAA says. In total, 124 companies sold LTC insurance in 1999, with premium volume for policies sold in the individual and group association market totaling about $789 million, reports "Long-Term Care Insurance in 1998-1999."

Favorable Mass Changes - Individual long term care insurance companies have instituted favorable changes for their existing business in various ways. Some have been implemented solely by company practice without any fanfare, perhaps relying upon alternate plan of care provisions. Others have been announced to agents and brokers. In some cases, unilateral amendments have been sent to existing policyholders alerting them of liberalizations of policy wording. In other cases, upgrades have been offered to clients willing to pay additional premium for the expanded coverage.

Examples listed in the article were: Adding assisted living facility coverage to policies that had nursing home and home care coverage, but no assisted living coverage when priced. Less frequently, ALF coverage has been added to policies that lacked home care coverage; Broadening the definitions of activities of daily living to include stand-by assistance; Expanding bed reservation coverage to include reasons beyond hospitalization; Lowering existing premiums; Removing restrictions such as 3-day prior hospitalization as well as inorganic mental and nervous exclusions and Upgrading to add home care coverage and assisted living facility coverage (Note that some of the enhancements listed above can have significant premium considerations. So, for example, if a company added ALF coverage that had not been contemplated in the original pricing and at a later date felt that a premium increase was needed, all parties should appreciate that the rate increase might be entirely attributable to the pro-consumer expansion of coverage)

AGE ADJUSTED DEATH RATES (Pdf)

HOW TO COPE WITH THE COMING CRISIS IN LONG-TERM CARE: (ROBERT E. MOFFIT, PH.D., RICHARD TESKE, AND STEPHEN MOSES 2002)

Middle Class Abuse of Medicaid Long Term Care. The worst eligibility problem is the ability of the middle and even upper classes to use Medicaid as their long-term care insurance. Contrary to reasonable expectation, one need not be impoverished to qualify for Medicaid. In most cases, income and/or asset based qualifications are either nonexistent or easily avoidable with the right lawyer. Indeed, a whole cottage industry exists that teaches seniors how to qualify. This gaming of the system by middle class seniors is grossly unfair to taxpayers. Laws to prevent this have unfortunately not been successful.

"The result of the middle class using this loophole is now painfully obvious. Although Medicaid pays for only one-seventh of all national health expenditures, it pays for almost half of all nursing home costs and two-thirds of all home health costs. By comparison, private insurance covers about one-third of all national health expenditures but only 5 percent of long-term care. And because long-term care is so costly, it represents almost 43 percent of all Medicaid expenditures, but only 9 percent of all recipients use the services. Combine the rapid aging of the population with the fact that those over age 85 are the fastest growing part of our elderly population, not to mention the costliest, and the financial picture for America's taxpayers is bleak.

"The result is that by 2030 when the baby boomers are fully retired, Medicaid long-term costs will increase at least fourfold in real dollar terms. This is not only a catastrophe for Medicaid, but also for all other statewide programs that will be crowded out of the state budget. As a matter of equity, permitting the middle class to abuse Medicaid's long-term care eligibility requirements at the expense of the poor is inexcusable. By continuing this abuse, Medicaid will eventually absorb almost all state revenue. This means that if your primary concern is education, Medicaid must be reformed. If it is highways, Medicaid must be reformed. Reforming Medicaid is a prerequisite for states if they wish to fund any other issue in a generation.

Nursing home staff: CMS Releases Phase II Report on Minimum Nursing Home Staff Ratios

The Centers for Medicare & Medicaid Services has officially transmitted to Congress "Report to Congress: Appropriateness of Minimum Nurse Staffing Ratios In Nursing Homes Phase II Final Report."

The Truth About Human Aging

Antiaging products are big business--a multibillion-dollar industry. But the marketing of these products often misrepresents the science. Rather than let their silence imply compliance, 51 of the top researchers in the field of aging research collaborated to create a position paper that sets out the current state of the science. A shorter, more pointed essay, called "No Truth to the Fountain of Youth," by three of the position paper's signers, S. Jay Olshansky, Leonard Hayflick and Bruce A. Carnes, is in Scientific American's June 2002 issue; the position paper itself is here.

Older Women Receive Less Pension Income Than Men

Older women have lower incomes and fewer economic resources than their male counterparts, but the difference in income from pensions is especially pronounced. In the 65 plus age group, women are only about half as likely as men to receive income from pensions (including from their husbands' pensions). And the half who do, get about half as much as men. Among today's working women, women are participating in pension plans in greater numbers. For women who work full-time, near equality in participation rates has been achieved. Part-time workers, who are disproportionately women, however, are much less likely to participate in employer-sponsored pension plans. And over their lifetimes, women spend more time out of the labor force than men. This also contributes to the lesser likelihood of older women receiving pension income. And because women still earn less than men, their pensions will continue to be smaller. These findings are from a newly released study by the Institute for Women's Policy Research in Washington, D.C., funded by the U.S. Department of Labor, "The Gender Gap in Pension Coverage: What Does the Future Hold?"

Let's be careful out there. Where you may think the government must cover, recognize there are rules which may indicate something entirely different. Bedridden Patient Not Entitled to Home Health Care Services (TN) TennCare denied Plaintiff home health services coverage on the basis that the services were not medically necessary and constituted custodial care. Plaintiff, legally blind and bedridden due to rheumatoid arthritis, was receiving SSI disability benefits and, prior to TennCare, had her home health services covered by Medicaid. The administrative law judge and the trial court upheld the denial of coverage. The court of appeals affirmed the denial. There was no merit in Plaintiff's argument that Defendant had to establish a change of circumstances before terminating the Plaintiff's services. Material, substantial evidence supported the ALJ's decision that the services were not medically necessary.

Depression and Parkinson's disease

The Home Caregiver’s Guide to Coping With the Hospitalization of Your Loved One By Deidre A. Grab

Financial Aspects of Aging Research The latest research on economic security, retirement income and consumer expenditures is just a click away at the new www.FAAR.org. FAAR.org is intended to serve researchers, practitioners and journalists who have an interest in aging-related fields and do not have a background in financial matters.

LTC and aging: (Richard Jackson, "The Global Retirement Crisis: The Threat to World Stability and What to Do About It," The Center for Strategic and International Studies, Washington, DC, 2002. "The aging of the world's population will strain the capacity of societies to care for the old without sacrificing the living standards of the young. In the developed world, where workers typically support retirees through 'pay-as-you-go' retirement systems, the rising cost of pensions and health benefits threatens fiscal and economic stability. Yet even in the developing world, where the old typically live with the young, falling birthrates and growing life spans are combining with industrialization and urbanization to create new stresses. Almost everywhere, countries will have to race against time to ensure their social fabric against the 'shock' of global aging.

"The United States is better positioned to confront the challenge than most of the world's major economies. It is now the youngest of the developed countries-and its relatively high rates of fertility and immigration are likely to keep it so. By 2050, the elderly share of the population will reach 27 percent in France, 31 percent in Germany, and 36 percent in Japan. In the United States, it will only reach 21 percent.

"Along with its younger population, the United States has a relatively inexpensive Social Security system, relatively high retirement ages, and a large and innovative private pension system. A larger share of the elderly and near-elderly work in the United States than in any major developed country except Japan. As of 1999, US pension plans possessed an astonishing 59 percent of total pension assets worldwide.

"Although these are considerable advantages, they are not a cause for complacency. The US Social Security system faces a widening financing gap when Boomers start retiring a decade from now. Despite Americans' traditions of financial self reliance, most are heavily dependent on Social Security-and vulnerable to benefit cuts. Although US pension plans own 59 percent of all global pension assets, half of the workforce has no private pension coverage at all. America also has the most costly health-care system in the world. In 1998, the United States spent $4,178 per capita on health care; Switzerland, the next runner-up, spent just $2,794. Explosive growth in health-care spending on the elderly threatens to cancel out the US advantage in pensions.

"A few years ago, America began a much-needed debate over the aging challenge. The Clinton administration proposed using mounting budget surpluses as a means of bridging Social Security's financing gap. The Bush administration proposed using them to fund a transition to a two-tiered system that would include personal accounts. By the time President Bush's Social Security Reform Commission issued its final report in December 2001, however, its recommendations were overshadowed by other events.

"In the aftermath of September 11, the budget surpluses have vanished-and so has the enthusiasm for reform. Before long, however, America will be compelled to re-engage the aging challenge. In today's more constrained fiscal and economic environment, the reform of retirement systems has become more important, not less."

Many Baby Boomers Considering But Not Buying Long-Term Care Insurance

LTC Policies: Changes To In-Force Long term care insurance Policies- (National Underwriter Company, 2002) - Over the years, long term care insurance policies have improved tremendously. For instance, much has been written about the demise of the 3-day prior hospitalization provision and post-claim underwriting, the addition of home care and assisted living facility coverage, third-party notification of potential lapse and reinstatement due to unintentional lapse, and other improvements which have swept the industry. Less has been written about improvements that are not universally available, such as more liberal conditional receipt coverage, monthly home care and shared care. The above changes, stimulated by changes in the LTC delivery system, company innovation and regulatory leadership, apply to newly-issued LTCI policies. But what have the industry practices been regarding various types of changes to in-force policies?

While the spotlight has been shone on rate increases, little attention has been paid to favorable mass changes that insurers have implemented or on how their practices have affected policyholders whose needs or desires change over time. Given the long time between issue and claim for LTCI, these can be important issues.

LTC: According to the 2002 MetLife Mature Market Institute Survey of Nursing Home and Home Care Costs, the yearly cost of a nursing home averages $52,195 for a semi-private room in the U.S. The average cost of an assisted living facility, per the study, is $25,908 yearly.

Other options for Long Term Care: (2002)

HHS, NCSL Release Report On State Long-Term Care Policy

The HHS-funded report, prepared by the National Conference of State Legislatures (NCSL), analyzes states' long-term care policies and efforts to deal with the rising costs of caring for the elderly, people with disabilities and others requiring long-term care. The report also cites a trend in states towards providing individuals greater choice through opportunities for home and community-based care services. The NCSL report, "State Long-Term-Care: Recent Developments and Policy Directions," takes an in-depth look at long-term care budgets, legislation and planning in the 50 states and the District of Columbia. The report says that tight budget pictures in many states raise new challenges for continuing the trend toward more home and community-based care services.

The lack of nurses may account for up to 25% of patient injuries and death. For every nurse that retires, only one graduates from nursing school. (2002)

Jot this down: Only 18% of long term care is nursing home care. Most long term care is home care, home health care, adult day care, assisted living facility care, etc.

: CMS Cuts Payments to Skilled Nursing Facilities The Centers for Medicare & Medicaid Services announced several changes in payments to skilled nursing facilities that combine to reduce the amount they will receive starting October 1, 2002. CMS said payments under Medicare's nursing home prospective payment system will go up by 2.6%, a change worth nearly $400 million. However, CMS also noted that two Congressionally set, temporary add-on payments to nursing homes will expire at the start of fiscal 2003, cutting payments by about $1.4 billion. "The combined effect will result in an estimated net decrease of $1 billion in fiscal 2003 nursing facility payments.

Elderly homes: (2002) Of the houses owned by seniors, :

34 percent were built before 1950

38 percent were built between 1951-1965

More than 63 percent have physical deficiencies and are occupied by homeowners 70 years of age or older. "Not only are these structures likely to have physical deficiencies, they often contain outdated lighting and electrical systems and dangerous air and heating systems - elements that cause home accidents,"

Elderly Increasingly Outliving Their Driving Privileges (2002) As people live longer and more older drivers give up their driving privileges, a new study finds older men and women who outlive their ability or willingness to drive may be dependent on alternative transportation for more than a decade in later life. Hundreds of thousands of older people quit driving each year and must turn to alternative transportation. This change in status can create unforeseen economic and social burdens, according to the authors of this study reported in the August 2002 issue of the American Journal of Public Health.

Elderly care: (American Journal of Public Health 2002) Out-of-pocket expenses can be extremely high for older people who develop an illness that limits their ability to care for themselves. Based on data compiled by the National Institute on Aging for 1995, Medicare recipients spent an additional $13,254 for health care in the first year after they developed a disorder even if they did not move to a nursing home.

Aging: (2002) A Dilemma for Parents and Kids WHERE WILL ELDERLY PARENTS LIVE? WHO WILL PAY FOR THEIR CARE? BOSTON-Adult children and their parents are not thinking the same thing when it comes to planning for how parents will be cared for as they get older, or how their care will be financed. Results from the "Long Term Care Partners Survey of American Parents and Adult Children," conducted by Zogby International, show that America's older parents (between the ages of 54 and 84) do not want to move in with their children. A higher percent of adult children, however, feel it is likely their parents will move in with them when they are unable to care for themselves. And both recognize there is a high likelihood adult children will be tapped to help finance their parents' future long term care needs.

Results of the survey showed that parents have a strong desire not to move in with their children should they need care; nearly two-thirds (64%) of parents with children over age 34 stated they would not want to move in with their children in their later years should they need care. Adult children, however, aren't quite so sure. Nearly half (44%) stated they felt their parents would want to move in with them should they need care. And an overwhelming majority (82%) of adult children between the ages of 34 and 65 are prepared to take care of their parents' day-to-day needs if they could not do so themselves.

Additionally, both recognize parents may need financial help with their long term care needs. Nearly one third (32%) of parents believe they'll need financial assistance from their children, while just under half (44%) of adult children expect to help their parents financially. However, children are not advising their parents to purchase long term care insurance (only 23% would consider doing so) and only 12% of parents polled say they have purchased long term care insurance for themselves.

"This study highlights that parents and adult children aren't having conversations about future care needs and/or don't fully understand their options," said Paul Forte, Chief Executive Officer, Long Term Care Partners, LLC. "Parents and children need to talk about these issues before they become crises. Planning before care is needed can help both parties achieve a better outcome in the long run."

Nursing homes are not a popular choice for parents or their children. Almost half (47%) of seniors say it is unlikely they will spend some time in a nursing home or assisted living facility. Adult children agree, with 53% stating their parents will not spend time in a nursing home. Overall, six out of every 10 Americans who reach age 65 will need long term care services. And care can be expensive. According to a 2002 study by the MetLife Mature Market Institute, the average national cost of care in a nursing home is $143 per day for a semi-private room and $168 a day for a private room. Care at home is expensive as well, according to the Institute. The average cost of a home health care aide averages $18 per hour nationally, or $158,000 for round-the-clock care.

"Clearly, children expect to take responsibility for their parents' care and to assume some of their financial obligations," said Forte. "There's a big question, though, as to how they will pay for the care that may be necessary. They ought to be thinking about long term care insurance as a means to help provide more options for them and their parents should care be needed in the future."

Nurse Practitioner Prescribing Law: State by State. Pharmacists have the dual task of following both the dispensing law of the state where they practice and the prescriptive law of the state where prescribers practice. Most pharmacists are familiar with prescriber law in their own states, but may want guidance when it comes to interstate transactions, especially in regard to state variations in nurse practitioner (NP) prescriptive authority. This Medscape resource is designed to do just that.

Chronic Illness in America: Almost one-half of all Americans report having a chronic illness - and they account for 75% of national spending on health care. Almost one in five Americans has hypertension, one in ten reports clinical depression, and one in twelve has asthma. On average, people with chronic illness cost 3.5 times as much to serve as all others. The importance of this population and its needs has led to a surge in serious research and experimentation. Information abounds about the prevalence, cost, and emerging care models appropriate to these patients - but little coherent summary information is available on how well Americans are living with chronic illness, how well they are able to care for themselves, and how well our health system cares for them. Many are not receiving necessary services - particularly support services, such as home care - and more than half do not feel confident in their relationships with their physicians. These and other findings come from a report on chronic illness, "A Portrait of the Chronically Ill in America," published by the Foundation for Accountability and The Robert Wood Johnson Foundation.

CMS Publishes Final Rule on PPS for Long-Term Care Hospitals: The Centers for Medicare & Medicaid Services issued a final rule creating a prospective payment system (PPS) for long-term care hospitals. The new system, which is required by statute, will affect over 270 hospitals. The new payment system is designed to assure appropriate payment for services to severely ill or medically complex patients, while providing incentives to hospitals for more efficient care of Medicare beneficiaries. Long-term care hospitals, in general, are defined in the Medicare law as hospitals that have an average inpatient length of stay greater than 25 days. These hospitals typically provide extended medical and rehabilitative care for patients who are clinically complex and may suffer from multiple acute or chronic conditions. Services may include comprehensive rehabilitation, respiratory therapy, cancer treatment, head trauma treatment and pain management.

“Long Term Care Partners Survey of American Parents and Adult Children” show that both older parents and adult children recognize there is a high likelihood that adult children will be tapped to help finance their parents’ future LTC needs: Nearly two-thirds (64%) of parents with children over age 34 stated in the survey that they would not want to move in with their children in their later years, should they need care.

Adult children, however, aren’t quite so sure. Nearly half (44%) stated they felt their parents would want to move in with them should they need care.

And an overwhelming majority (82%) of adult children between the ages of 34 and 65 are prepared to take care of their parents’ day-to-day needs if they could not do so themselves.

Additionally, both recognize parents may need financial help with their long-term care needs.

Nearly one third (32%) of parents believe they’ll need financial assistance from their children, while just under half (44%) of adult children expect to help their parents financially.

However, children are not advising their parents to purchase LTC insurance (only 23% would consider doing so), and only 12% of parents polled say they have purchased LTC insurance for themselves.

Nurses: Nursing Homes Struggle With Too Few Nurses, Aides for Growing Elderly Population": The article examines the lack of qualified caregivers available in nursing homes in Pennsylvania and nationwide. Although experts predict that the number of individuals ages 85 and older will double by 2030, the "pool of younger females who traditionally have served that group of elderly ... is stagnant," the Gazette reports. A recent survey by the federal government found that less than one in 10 nursing homes employ the "optimum number" of nurses and aides

LTC: (2002) In the Washington area, assisted-living facilities and nursing homes charge $95 to $200 a day, or $34,675 to $73,000 a year, according to an April insurance industry report.

Home-health aides and visiting nurses cost $15 to $60 an hour. So having an aide to help with personal care for eight hours a day at $15 an hour adds up to $43,800 a year.

Data show that about 21 percent of people in the United States age 65 and older have a chronic disability. Of these, 5 percent live in long-term care facilities. A recent study predicts that among U.S. residents who turned 65 in the year 2000, 23 percent will stay in a nursing home for a year or longer. Almost 45 percent of 65-year-olds will stay in a nursing home for at least a brief period

the LTC insurance plan offered by the federal government (see "The Federal Case" on this page), a 44-year-old would pay $1,512 a year for the same well-padded plan that would cost a 54-year-old $2,196 and cost a 64-year-old $3,348. If they each pay premiums until age 74, the 44-year-old would have paid $45,360; the 54-year-old would have paid $43,920 and the 64-year-old would have paid $33,480.

Of 1,808 life and health insurance companies, including some that sell LTC insurance, monitored by Indiana University professor Joseph Belth, 813 are on his watch list because of poor ratings and other red flags.

Making the Choice to Purchase Long-Term Care Insurance (2002) This lengthy and informative article in the Washington Post, entitled "Long-Term Thinking," examines the promotion of long-term care insurance by the federal government, the marketing of such insurance, and the pros and cons of buying long-term care insurance.

Long Term Care Partners, (2002) LLC, the company administering the Federal Long Term Care Insurance Program sponsored by the U.S. Office of Personnel Management, offers a checklist, "Top Ten Considerations for Purchasing Long Term Care Insurance." This checklist will help consumers understand what they need to consider before they make a decision about purchasing a policy. Consumers are advised to educate themselves via Web sites or articles; consider a variety of care options; buy at a young age and only the necessary coverage. They also should check the financial viability of the insurance company and make sure the coverage keeps up with inflation.

Nursing homes: The Pittsburgh Post-Gazette published a four-part series on nursing homes, both in Pennsylvania and nationwide. http://www.post-gazette.com/healthscience/20020922nursinghomes0922p1.asp, http://www.post-gazette.com/healthscience/20020923collins0923xp2.asp, http://www.post-gazette.com/healthscience/20020924culturechange0924p1.asp, http://www.post-gazette.com/healthscience/20020925consumers0925p1.asp

"Long-Term Care: Availability of Medicaid Home and Community Services for Elderly Individuals Varies Across States," GAO-02-1121 (26 Sep 2002)

Top Ten Considerations When Purchasing Long-Term Care Insurance

Penn Treaty: Penn Treaty American Corporation today announced that its new applications for long-term care insurance coverage have more than doubled since receiving approval to recommence sales in Florida on July 30, 2002. Prior to its recommencement of sales in Florida, the Company received an average of approximately 75 new policy applications weekly. New long-term care insurance applications have grown steadily since that time to over 170 per week. Company management anticipates that this positive trend in new applications will increase as its agents continue to reengage sales in the Company's 31 authorized states and as the Company receives further approval to recommence sales in its remaining 19 states.

They got nailed years ago for some of the worst fiduciary violations regarding pricing of LTC. Maybe the pricing is OK now, but I would never even consider this company.

LTC: The average annual premium cost for policies purchased by individuals in the year 2000 was $1,677 per year and the average for policies purchased through a group plan like one offered by an employer was $722.

The vast majority of consumers (86 percent of all policies sold in 1999) buy TQ plans, not NQ plans (Health Insurance Association of America, 2001). True- but if you were in California, I would absolutely suggest a non tax qualified policy.

The premiums paid, by age, would really be as follows:

Purchase Age Annual Premium Total Premium Paid through Age 74

44 $1,512 $45,360

54 $3,660 $73,200

64 $8,861 $88,610

More Surgical Patients Die When Nurses' Caseloads Increase National Institute of Nursing Research (2002)

The Health Insurance Association of America (HIAA) reports that private long-term care insurance already in place could save Medicare/Medicaid in the neighborhood of $30 billion.

Health care(2002) - Various government agencies expect health-care spending in the United States to double to $2.8 trillion by 2011 and reach 17% of the country's gross domestic product.

Long Term Care Partners, (2002) which administers the Federal Long Term Care Insurance Program, has developed the Independent Living Test to identify if a family member is at or near the point when he or she would be unable to live independently. Key points: Medications -- Are prescriptions not being refilled? Has taking medication become difficult? Food and Groceries -- Are the cupboards frequently empty or being filled with unusual foods? Is the food in the refrigerator often spoiled? Daily Business -- Is the mail being picked up and opened regularly? Are credit cards or checkbook being misused or not balanced? Social Contact -- Has the amount of social contact changed dramatically? Is there a recent history of multiple minor accidents? Living Habits -- Has there been a change in living habits, such as a change in dress or appearance, or a decline in personal hygiene? Solicitations -- Is there an increase in ordering unnecessary items? Calls to Family Members or Health Care Providers -- Has there been a marked increase in panic calls to family or medical providers?

LTC COST - (2002 MetLife Market Survey of Nursing Home and Home Care Costs) the national average annual cost of a semi-private room in a nursing home is now $52,000. The American Council of Life Insurers estimates that the annual cost of nursing home care will rise to as much as $190,000 in less than 30 years.

End-of-Life Care: Questions and Answers National Cancer Institute (2003)

The 4.5 million private U.S. long-term care insurance policies already in place could save Medicaid and Medicare about $30 billion, according to a study by LifePlans Inc. (2003) The researchers found that private LTC coverage saved an average of $1,668 in out-of-- pocket expenditures per month for insureds who used home care and $2,458 per month for insureds who needed nursing home care. Private LTC coverage also reduced the probability that an insured would become poor enough to qualify for Medicaid nursing home assistance to 3%, from 9%. Private LTC coverage could save Medicaid $23 billion, or $5,032 per insured, for all forms of long-term care and Medicare $7 billion, or $1,609 per insured, for home care, the researchers estimate.

Maximum Medical Expense Claim for Qualified Long Term Care Insurance Premiums Under Code § 213(d)(10) (2003)

Attained Age Before Close of Year 2003

40 or Less $ 250

More Than 40 But No More Than 50 470

More Than 50 But No More Than 60 940

More Than 60 But No More Than 70 2,510

More Than 70 3,130

2003 Medicaid Spousal Impoverishment Figures - Effective January 1, 2003, the minimum/maximum resource allocation limits for community spouses of institutionalized individuals will increase as follows:

Minimum: $18,132

Maximum: $90,660

Effective January 1, 2003, the maximum income maintenance allowance will increase to $2,267. The standard maintenance amount (MMMNA) remains $1,493 and the excess shelter allowance (ESA) remains at $447.90.

Long Term Care: (2003) An Alliance survey found over 70% of respondents said they are very or somewhat concerned about needing long-term care in the future. However, only 21% have purchased long-term care insurance. This, despite the fact that 68 percent said they think that long-term care insurance is very or somewhat important to the financial security of their family.

But this is a problem for future purchasers- Annual premiums are rising anywhere from 15% to 50%, with Transamerica raising single person policy rates by as much as 84%. Reasons: higher-than-expected claim levels, lower-than-expected lapse rates and poorer-than-expected investment results.

Responses to the Nursing Shortage: Policy, Press, Pipeline, and Perks

PATIENT SAFETY: CALIFORNIA'S PROPOSED NURSE-PATIENT RATIOS

LTC: ("Can the Quality of Care Be Improved in Nursing Homes?" by Barbara Hanson 2003) MediCal, the welfare program in California, pays for about 70% of the residents of nursing homes at a reduced rate, usually less than the actual out of pocket cost to the facility. Any share of cost by the resident triggers the MediCal rate. More generous Medicare reimbursement which used to make up some of the short-fall has recently been cut to the bone as well. Also, with generous liability laws in CA, we have a lot of lawyers pouncing on nursing homes and driving the cost of liability insurance through the roof. Nursing homes are a money losing proposition already--a few more fines will put even more out of business. Twenty-five per cent of the nursing home industry declared bankruptcy a couple years ago and 8% are still bankrupt.

Look around. Have you seen any new skilled nursing homes popping up in your neighborhood? In Santa Cruz County, we have not seen a new one built in decades and some have closed. There are now 35 million people over 65 in the US, 75 million boomers on their heels. The historical rate is that 43% of us over 65 will need care at some point in a skilled nursing facility. Where will we all be staying?

The ideal place to convalesce is at home, and often a private-pay apartment in assisted living or a residential care facility will fill the bill. These options cost money. The government is not able or willing to spend $3000-$5000 a month to put us all up in a place we might like. The nursing home is the very last resort when health has deteriorated past home care, family and friends are exhausted, or all the money is gone.

LTC: (2003) The number of Americans who have purchased insurance against the catastrophic costs of long-term care has increased more than tenfold in the last fifteen years, according to a survey released today by the Health Insurance Association of America. The study also shows that long-term care insurers have paid out more than $6 billion to cover a wide range of services, including home health care, care in an assisted living facility, nursing home care, respite care and hospice care, including $839 million in benefits paid during 2001 alone.

The total number of long-term care insurance policies sold has grown from 815,000 in 1987, when HIAA began systematically tracking long-term care insurance, to nearly 8.3 million in 2001. More than 1.4 million people purchased a policy during the recent two-year survey period

Although premiums paid for long-term care insurance varied widely based on a number of factors, primarily benefit design chosen and entry age of the policyholder, the HIAA study found that the average premium paid in 2001 remained nearly constant when compared with the average premium paid two years earlier. For example, a basic policy purchased in 2001 at age 65 cost $996 a year, compared to an average annual premium of $1,002 for the same policy purchased in 1999. A policy with similar daily coverage as well as inflation protection and nonforfeiture benefits cost $2,261 in 2001, compared with $2,130 two years earlier.

The total number of policies sold through the employer market passed 1.3 million in 2001, accounting for nearly a quarter of the long-term care market during that year. The average annual growth in this market has outpaced growth in the individual and group association markets, and the federal government recently began offering a long-term care insurance plan to all federal employees, retirees and their families. Based on data reported by survey respondents, HIAA estimates that roughly 70% of all individual long-term care policies sold remain in effect.

LTC- (2003) statistics from the National Center for Health Statistics noted that the "chances of needing long term care increase with age; 17% of people between ages 65 to 74 need long term care; 28% between 75 and 84; and 49% for those over age 85. The average age of those buying a long term care policy was age 63."

About time (WSJ 2003) For years, thousands of middle-class and even affluent retirees -- terrified that long-term health-care costs could wipe out their savings -- have transferred their assets to relatives in order to qualify for Medicaid, the government health plan for the poor. Their goal is to make themselves poor by Medicaid's definition, generally meaning they have no more than $2,000 in assets, excluding their house and their car.

The upshot is that families, in some cases with net worths of millions of dollars, are going through contortions to spend or give away all their money. Some simply write giant checks to their children, while others splurge on their house. Technically, a person can have a multimillion-dollar mansion and still be considered for Medicaid -- though many states will try to recoup some of the money after he or she dies. New York has an even more bizarre option: A sick husband or wife can transfer all their assets to a spouse, who then refuses to pay for their care. Medicaid then steps in.

Such practices, while legal, are getting greater scrutiny as states -- which pick up roughly half the costs of Medicaid -- face their worst fiscal crisis in decades.

Medicaid paid $47 billion for nursing-home care in 2001, the most recent year available. Much of that goes to people truly in need. But much -- according to one earlier study, as much as 22% -- goes to families that could afford to pay for months or even years of their own nursing-home care. Exactly how many people shelter their assets in order to qualify for Medicaid isn't clear. The latest research was conducted in 1997 by the General Accounting Office which reviewed case files from two states and found that 13% to 22% of people who applied for nursing-home and other long-term care benefits through Medicaid transferred assets.

How to Impoverish Yourself

People with assets of more than about $2,000, not counting a house and car, generally don't qualify for Medicaid payments for nursing home care. Here are some of the ploys that people use to get around that.

• Give away all your money. Medicaid only looks at asset transfers during the previous three years. That means people can give away hundreds of thousands of dollars to their heirs and qualify for Medicaid just 36 months later. The drawback is that they can't get their money back if they end up not needing a nursing home. In addition, big transfers could be subject to stiff gift taxes.

• Give away half of your money. This common technique, dubbed "half a loaf," is used by people who need nursing-home care immediately. They give half their assets to their heirs. The other half of their nest egg pays for their care during the "penalty period" until they are eligible for Medicaid.

• Put it in an annuity. "Medicaid annuities," which make people appear poor, became popular several years ago. They work best for married couples, who use all their assets to buy an annuity.The sick spouse is considered impoverished and qualifies for Medicaid-paid care. The healthy spouse, meanwhile, receives a monthly check from the annuity company.

• Refuse to pay for your spouse. Under federal law, wives and husbands aren't required to pay nursing-home costs of their spouses. So people going into a nursing home sometimes transfer all their assets to their spouse so that they can still qualify for Medicaid. Many states don't permit "spousal refusal" when it comes to Medicaid, but New York does, and it's commonly used there.

• Splurge on your house or your car. Here the strategy is to spend on assets that generally aren't counted by Medicaid in determining eligibility. So people buy a new car. They pay down their home mortgage or they remodel their home.

LTC going up: UnumProvident, one of the major long-term care insurers, will be raising the premium on March 1 for a healthy 60-year old by $760, or 54%, and it is raising the rate on a 65 year old by $972 or 49%.

As business and government start to see the value of long-term care insurance, they are more receptive to private-sector solutions: (2003)

o At least 22 states now offer long-term care insurance to their employees.

o In 2002, 35 percent of large companies (5,000 or more employees) offered long-term care insurance as an employee benefit, as did one in four businesses with 1,000 to 4,999 workers.

o Nearly two-thirds of business owners surveyed by the U.S. Chamber of Commerce in 2001 regard the high cost of long-term care as a major concern (63%).

In 2001, seven of the top 10 insurance carriers in the group long-term care market had employer-subsidized plans on their books. For some of these carriers, employer-subsidized plans represent 31 to 98 percent of all their group long-term care insurance business.

Americans are purchasing long-term care insurance at younger ages. In the individual market, one-third of current owners bought their policy under age 65 (33%).

Nearly three-quarters of Asian-Americans ages 45 to 55 feel they should be doing more or should have done more for their parents. Private insurance helps them fulfill traditional obligations to elders (72%).

FEDERAL LONG TERM CARE RESULTS (Enews 2003) - Long Term Care Partners, LLC, the joint partnership formed by John Hancock Life and Metropolitan Life, said that 265,000 members of the "Federal Family" have applied for insurance under the Federal Long Term Care Insurance Program. To date, enrollees in the program are evenly split between two groups: active employees, members of the uniformed services, and their spouses; and annuitants, their spouses, and other qualified relatives. Approved applicants are 54% female and 46% male

Designations:

Letters What They Stand For Who Awards Them Avg. Completion Time

CECA Certified Elder Caregiver Advisor American Society of Specialty Counselors 35-45 hours

CLTC Certified in Long Term Care Corp. on Long-Term Care 2 classroom days or 4-6 weeks' correspondence

CLTCA Certified Long Term Care Advisor Society of Long Term Care Advisors 2 classroom days or 15 hours' correspondence

CSA Certified Senior Advisor Society of Certified Senior Advisors 3.5 classroom days or 8-12 weeks' correspondence

CSS Certified Senior Specialist Center for Senior Studies 2 weeks - 1 month

LTCGS Long Term Care Group Specialist Carequest University 45-plus hours

LTCIS Long Term Care Insurance Specialist Center for Senior Studies 2-4 classroom days

LTCP Long Term Care Insurance Professional Health Insurance Association of America 2.5 classroom days

LTC: (2003) By the end of 1999, more than 6.8 million Americans had purchased a long-term care policy, either individually or through a group plan sponsored by an employer or association. This private coverage is already meeting the needs of thousands of families and businesses every day. By 2000, insurers' payments for long-term care benefits are estimated to have reached a cumulative $11 billion.

LTC: (2003) Of 8.3 million policies sold since 1987, approximately 5.8 million policies remain in effect. America has 35 million seniors and 76 million baby-boomers. So, only about 5 percent of the people likely to need long-term care in the next 30 years are privately insured for the risk despite 15 years of intense marketing efforts to convince them of the need.

Long-term care insurance paid $839 million in claims during 2001. In that same year, America spent $98.9 billion on nursing home care and $33.2 billion on home health care. That means private LTCI paid only six-tenths of one percent of the cost of long-term care in the United States in 2001. So, who does pay for long-term care? Mostly, Medicaid and Medicare.

Assisted living facilities are 90 percent private pay but too few people can afford ALFs to fill the surplus of beds in their overbuilt facilities profitably.

Long Term Care Insurance in 2000-2001”

Federal LTC: In mid-February, Long Term Care Partners, LLC, announced that 265,000 members of the “Federal Family” had so far applied for LTC Insurance under the program, and that when underwriting on “Open Season” applicants is completed this spring, they expect to have more than 215,000 policies in force.

LTC: (2003) An American Council of Life Insurers report shows consumer and business awareness of the importance of long-term care insurance is growing. Among the findings: Women baby boomers are buying this insurance as a result of their experiences in caring for people needing long-term care assistance; half of Americans 45 and older have discussed their possible need for long-term care with their adult children; 22 states are offering long-term care insurance to their employees; one-third of large companies and more smaller employers are offering long-term care insurance to employees; insurers have paid out more than $11 billion in long-term care benefits and consumers are buying long-term care at younger ages.

LTC (ACLI 2003) 35% of companies with 5,000 or more employees last year offered LTCI as an employee benefit, as did 25% of businesses with 1,000 to 4,999 workers. Moreover, at least 22 state governments offer the insurance to their employees. And it's not just older, affluent people buying policies. About a third of policy owners, many of them blue-collar workers, purchased the insurance before age 65.

Seven of the 10 largest insurance carriers in group LTCI have employer-subsidized plans on their books, and almost two-thirds of business owners believe the high cost of long-term care is a major concern. About half of Americans age 45 and older have discussed the eventual need for long-term care with their grown children, and 37% of female baby boomers, after caring for someone, have taken specific action to plan for their future, including buying additional life, health or LTCI.

LTC: (2003) Today, the average nursing home stay costs close to $56,000 a year.

By 2030, the national average cost is estimated to be $190,600 a year.

An in-home aide who assists with dressing, bathing, meals, and similar household chores 3 times a week can cost $1,000 a month, or $12,000 a year.

The costs of LTC services will more than quadruple by 2030.

HIAA estimates that roughly 70% of all individual long-term care policies sold remain in effect.

The American Nursing Homes Directory: (2003) This brand new directory provides comprehensive and accurate information on ALL nursing homes, long-term care facilities, nursing home corporations and assisted living facilities throughout the United States. It includes senior managers, beds, specialized services, type of ownership, employees and much more. $285. 905-751-0199 (tel: 905-751-0919).

Lifespan: (2003) The Senate passed the Lifespan Respite Care Act (S. 538) this past week. The bill has been referred to the House Committee on Energy and Commerce. This bill would amend the Public Health Service Act to establish a program to assist family caregivers in accessing affordable and high-quality respite care. For anyone who remembers (or stayed awake through) Civics 101 classes, getting a bill passed through the House and/or Senate is no small feat. Jill and her team have worked exceptionally hard to get to this point and should be commended.

Lifespan Respite is a coordinated system of accessible, community-based respite care services for caregivers and individuals regardless of age, race, ethnicity, special need or situation. Respite care is planned or emergency short-term relief to caregivers from the demands of ongoing care for an individual with special needs or at risk of abuse or neglect. Special needs may include any disability, any chronic or terminal physical, emotional, cognitive or mental health condition requiring ongoing care and supervision, including Alzheimer’s disease and related disorders, developmental disabilities, children with special medical needs, and any other condition determined by the state. Crisis respite may also be used to provide a temporary safe haven for the care recipient in the event of an emergency brought on by domestic violence, substance abuse, or a housing, health or job crisis.

Cancer- (2003) About one in 10 cancer patients in the U.S. younger than 65 do not have health insurance and may not be getting the care they need.

Most of the uninsured are Hispanic.

Overall, five percent of the 1,383 cancer patients studied lacked insurance. When restricted to people younger than 65, however, that proportion rose to 11 percent, including 20 percent of Hispanics, 14 percent of blacks and 10 percent of whites. These uninsured patients had less than half as much money spent on their cancer care as their privately insured peers. During a six-month period, the under-65 group, for example, had an average of $4,806 put toward their cancer care, in comparison to the average of $8,419 among privately insured cancer patients.

Assisted Living: The USA had 36,399 assisted-living facilities last year, up 48% from 1998, according to the National Academy for State Health Policy.

A federal study has produced first-ever guidelines aimed at ensuring more consistent quality in assisted-living facilities. The issues include:

Written disclosure of all facility costs, services and policies, including minimum notice for any changes or termination.

Rules to ensure that "trained and awake staff are on duty" at all times and that medication is administered and stored safely.

Creation of a national Center for Excellence in Assisted Living to analyze and suggest regulations.

Increased state and federal funding for the Long-Term Care Ombudsman Program, the 50-state network whose members field complaints and represent the residents' interests.

Going to Eden- Pets: (Kristin Bender, Daily Review 2003) : "As part of comprehensive care, an increasing numbers of facilities are finding that allowing cats, dogs and birds and even rabbits to live with their two legged companions to relieve stress, helps with socialability and makes everyone just seem a little bit happier.

Pets are reminiscent therapy. When people retire to a nursing home, they start to think about when they had dogs and kids running around and had a good job.... They can fall into a deep pit until something ,like a pet, comes along and reminds them of a better time.

With a new admission, the family and patients are very anxious. If the dogs come out with me to meet a new person, its's much more of a social admission. It takes away the anxiety and fear because most of us relate to animals. We forget about 'us' and our tensions go away.

LTC (2003)- Two out of three nursing home residents receive Medicaid, which pays approximately 80 percent of the cost of care as measured by resident-days. Only about 5 percent of the bill is paid by insurance; the rest, out of pocket. Medicaid in effect has become a nearly universal form of long-term-care insurance, albeit with strict asset and income limits. . . .

"The first consequence of this funding system is that almost one-fourth of the Medicaid budget is diverted from the acute-care needs of the indigent population.

Medicaid financing of long-term care yields two-tier care. Nursing homes are often unwilling to accept Medicaid recipients (or those who are unlikely to remain private payers for long), except when they can bill Medicare for rehabilitation services. The admission process at many of the best-run institutions is grounded not in need, but in the ability to pay. Because of long-standing budget constraints, Medicaid typically pays 20 to 30 percent less than a private-pay resident-and often as much as 50 percent less. It is a simple business decision to accept the private payer, especially since decades of "certificate of need" regulation, an important supply limitation, have kept nursing homes operating at or close to capacity.

"The problem is not only two-tier care, but also second-rate care. Certainly there are many fine nursing homes, staffed by heroes and saints. But reimbursement rates, even in relatively high-income states like New York, cannot possibly provide for first-rate care. There are too few aides and nurses for too many residents; too few porters for too many residents; and too little physical therapy to accommodate too many residents. Indeed, no physical therapy is offered unless the patient's prognosis points to improvement in the impaired skill. Thus, no reimbursement is available if the aim is merely to prevent the skill-ambulation, for example-from atrophying. So atrophy it does.

"Nursing homes strive not to provide first-rate care in any idealized sense, but care that is achievable within the payment limits of the state and federal governments. Such care requires countless compromises: chairs that recline too much for residents to get out of easily (also a threat to ambulation); wheelchairs that, however uncomfortable, are efficient for transporting residents around the building; lift contraptions that, however frightening to residents, ease their transfer from bed to chair. There is only so much even heroes and saints can do on a shift.

ltc: (2003) California has 11 percent of the state's homes already in bankruptcy.

Cancer: The WHO has published the World Cancer Report, a comprehensive global examination of the disease. The report projects that the number of cancer cases will increase – from 10 million new cases globally in 2000 to 15 million in 2020 -due primarily to steadily ageing populations in both developed and developing countries, and also to current trends in smoking prevalence and the growing adoption common cancer worldwide, accounting for 1.2 million new cases annually; followed by breast cancer, with just over 1 million cases. The report includes suggestions on how the potential increase can be minimized, primarily involving tobacco cessation, adopting healthier lifestyles, and early disease detection through screening. /.

ILC Policy Report prepared by Centers for Disease Control and Prevention (CDC): The CDC released the “2001 National Hospital Discharge Survey,” which is based on the records of over 30 million hospital patients. The report finds over the past three decades, the average length of a was less than half of what it had been in 1970 (12.6 days). In 2001, older patients made up over 38 percent of the discharges, and used 46 percent of all inpatient days.

Prescription Medication Safety: The Caregiver’s Role Over two million Americans experience adverse drug reactions from prescription medication each year. Patients develop complications from these medications when doctors, pharmacists, and health care professionals ignore precautionary measures and lack communication skills. Prescription medication safety is crucial to prevent patients from suffering adverse drug reactions or death. Caregivers can become involved in preventing these errors.

LTC DECLINES -- (2003) A study in Long-Term Care Insurance Strategies magazine reports that as many as 40% of the applicants for LTC insurance may be declined due to health reasons.

Into the Hands of Strangers: Placing A Loved One Into A Nursing Home

Other Options for Long-Term Care by Sandy Lieberman (2003)

Leaving the home can be difficult for a senior, particularly when failing health forces the issue. However, even a relatively healthy senior alone in a single family dwelling may become isolated and lonely, unable to manage a large home and yard, and may no longer feel safe. This may be the time to consider an Independent Living Retirement Community. Also known as senior housing, these homes are designed to accommodate the needs and preferences of older persons. They appeal to people who prefer to live independently and may not need the degree of personal care or health care associated with assisted living or nursing homes.

Many retirement communities offer an opportunity to live among others with similar interests and needs, along with security and supportive services. Look for a community that is architecturally designed to alleviate some of the physical challenges that growing older may bring. For example, bathrooms may be equipped with handrails and grab bars or electrical outlets placed higher on the wall. Many accommodations are equipped for 24-hour emergency call service.

Senior Housing sometimes offers restaurant style meals, laundry service, house cleaning and limited transportation. The array of supportive services and amenities will vary from one community to another, but ideally the home you choose will offer the opportunity to live in dignity among others in a secure environment.

Monthly rents or purchase prices vary, depending on the community, the size of the apartment and services offered. Low cost, federally subsidized communities are available, but the Federal Division of Aging cautions that there can be up to a two-three year waiting list.

Assisted Living Facilities

Also known as personal care homes, this popular choice among families, requires licensing by the state. The American Association of Homes and Services for the Aging (AAHSA) calls this the most rapidly growing segment of all the senior living choices. Assisted living facilities (ALFs) are generally warm, friendly places best suited to the older person who needs assistance with daily activities.

ALFs allow their residents to be as independent as they are capable of being, while providing care services in the areas where they need help. Services include baths, dressing, oral hygiene, ambulation, help with meals, hair styling, transportation and recreation. Assisted living facilities provide a 24-hour staff, meals in a common dining hall, and are specially designed to allow access by the handicapped. An ALF should be designed with bathroom guardrails, sit-down showers, emergency pull cords, elevators, and other safety features.

Many assisted living facilities allow seniors to move in for several days to even a month or more, offering respite for the caregiver, a kind of vacation, for all involved. This can be an excellent way to try out a home to decide if this option is right for your loved one.

Cost can certainly be a major issue in the selection of appropriate housing. ALFs are all private pay, and, according to AAHSA, can range from less than $1,000 a month to more than $3,000. For the most part, assisted living costs are not eligible for Medicare or Medicaid reimbursement, although some states are beginning to provide some funding, either from state funds or through Medicaid. The fee structure of most ALFs changes as the needs of the resident increases and he or she requires a higher level of care.

Because the concept of assisted living is relatively new, and is not regulated by the federal government, the definition of "assisted living" often differs from state to state, even facility to facility. In some states assisted living facilities are allowed to provide some nursing care for residents, thereby qualifying to receive some payment assistance from Medicaid, the state-federal program for medical services to the poor. But this varies from state to state. Check with your local Area Agency on Aging to find out what services your state might pay for and how you may qualify.

Continuing Care Retirement Communities (CCRC’s)

The modern thought in residential housing is to offer a “continuum of care.” This latest catch phrase simply means that individuals can move to different levels of housing as age and health concerns require additional support. This is particularly important to those with progressive, dementia-related disorders such as Alzheimer’s disease.

CCRC’s may offer choices such as: independent living, assisted living, Alzheimer’s centers, and skilled nursing and rehabilitation services. Many progressive facilities are strictly designed for people with Alzheimer’s disease allowing residents in the early-to-middle stages of the disease to benefit from living in a more residential setting. Their programs go on to offer skilled nursing for Alzheimer’s patients as the need presents itself. These facilities offer a home-like, warm, friendly and safe environment exclusively for people with memory impairments.

Like Assisted Living Facilities, CCRC’s offer more care than traditional retirement communities. They were established to provide care when needed, leaving the healthy residents to live as independently as possible while simultaneously providing nursing care to residents who require it. The level of care ranges from minimal to a skilled nursing facility and is provided on the same campus, allowing residents to remain a part of the community. The basic premise of Continuing Care is that older people in reasonably good health may first enjoy independent living in the retirement section while having the security of nursing care, if necessary, in an adjacent section of the same facility.

This can be a good option for married couples in which one spouse has dementia. They may be well served in the retirement section for a long time into the disease as long as the well spouse can manage day-to-day needs of care. Although the retirement home section offers minimal services, additional services such as personal care can typically be purchased on a fee-for-service basis with an outside agency. Some facilities require that all residents be relatively independent at the time of admission while others may accept those with different levels of need.

Most CCRC’s require an entrance fee plus a set monthly fee with the guarantee that care will be provided indefinitely. Such an arrangement offers lifetime security for a fixed cost. Other facilities base their fees on the level of care a resident requires; in other words, residents who need more health care will have a higher fee than those who require less care. Some facilities accept Medicaid when residents deplete their assets, while others accept private payment only.

Nursing Homes

Thinking about whether to put your loved one in a nursing home is often a decision full of emotional conflict. It is often seen as a last resort or a sign of failure on the part of the caregiver or their family. While the decision should not be made carelessly, in many situations nursing home care is clearly the best option for both the caregiver and the loved one. A skilled nursing facility provides comprehensive care for those with medical needs requiring day-to-day, 24-hour supervision and medical care. A nursing home stay may be only temporary or may be a long-term living arrangement.

All nursing homes are government-licensed facilities with round-the-clock care supervised by registered nurses and certified nursing assistants. Although nursing homes offer rehabilitation services such as physical, occupational and speech therapy, most services are custodial in nature because many of the residents live there due to chronic conditions that may not respond to therapy.

In assessing whether a nursing home is the best option, you will also need to consider your financial and personal resources. Under certain limited conditions, Medicare will pay some nursing home costs for Medicare beneficiaries who require skilled nursing or rehabilitation services that have been ordered by a physician. To be covered, you must enter the nursing home directly after a qualifying hospital stay, which is at least three days.

According to the Health Care Financing Authority (HCFA) about half of all nursing home residents pay nursing home costs out of their own savings. After these savings and other resources are spent, many people who stay in nursing homes for long periods eventually become eligible for Medicaid once they have depleted their personal assets. If you have any questions about how you will pay for nursing home care, what coverage you may already have, or whether there are any government programs that will help with your expenses, there are people who can help. Your State's Insurance Counseling and Assistance (ICA) program has counselors ready to help you figure out how you can finance your long-term care. Some nursing homes accept residents on a private payment basis only and do not accept Medicaid reimbursement.

Lastly, include your loved one to the fullest extent possible in the decision-making process. This will help to alleviate fears and make the transition easier.

Nurse Burnout Could Lead to Lower Quality of Care

AWARE BUT NOT ACTING ON LTC NEED - Most Americans over the age of 44 view long-term care as an important health care issue, yet have done little or nothing to prepare for the high costs of such a crisis in their lives, according to a Roper study released today by the American Society on Aging (ASA). "We know that after age 65, Americans have more than a 70% chance of needing some form of long-term care. This is a real wake-up call for all of us to redouble our efforts to get good information on long-term care financing out into the community."

LTC: (2003) A majority (62%) of those surveyed have at least one serious misconception about who provides long-term care coverage or the conditions under which coverage is offered. For example, more than four in ten are unaware that Medicare provides limited coverage for skilled nursing care, limited to 100 days in each benefit period, and only following a hospital stay.

46% of those who currently have health insurance believe that this insurance would cover most of the costs of long-term care. In reality long-term care is rarely covered by health insurance plans. 30% were unaware that, while Medicaid does provide long-term care coverage, it is only available to those who have depleted nearly all of their own financial resources.

Employer long term care: (PRU 2003) Sixty-two percent of workers said they would consider long term care insurance as a voluntary benefit if their employers offered it.

Employees need better information and education to determine if LTC insurance is right for them - Today, 56 percent of consumers are not familiar with the benefits and features of long term care insurance. In fact, only 14 percent feel very familiar. As yet, too few (only 30 percent) have talked with any financial professional to better understand whether this product is right for them.

Dementia: In a New England Journal of Medicine report, U.S. investigators found that people over 75 who engaged in leisure activities were less likely to show signs of dementia than others.

But not all activities appeared equally effective in reducing dementia risk. For instance, people who reported frequently playing board games, reading, playing a musical instrument or doing crossword puzzles were less likely to develop dementia than those who said they engaged in those activities only rarely.

However, frequently joining group discussions and writing appeared to offer no protection against memory-robbing diseases like Alzheimer's.

Academy Health: (2003) Academy Health, a health services research and policy organization, has published three briefs that provide an overview of the challenges facing long-term care and ways to address the challenges. Implicit in the briefs is the role of research in improving long-term care service delivery and policy in the past, and how it might continue to do so in the future. The publications are: “Long-Term Care: Collaborating for Solutions”; “Long-Term Care: Confronting Today’s Challenges”; and Long Term Care: Informed by Research.”

LTC: (2003) Long term care takes one in five Medicaid dollars.

Also per to a recent Connecticut survey, more than a third of seniors in the state shifted assets to qualify for Medicaid, instead of dipping into their personal savings to cover nursing-home bills. An earlier federal study found that as many as 22% of nursing-home patients relied on tricks to qualify for Medicaid payments. If such loopholes were closed nationwide, the savings could total $4 billion a year.

Elderly drugs: a new study says prices for the 50 drugs most prescribed for the elderly rose last year at more than three times the rate of inflation.

Prices for the 50 drugs increased an average of 6 percent, compared with a rise of 1.8 percent in the Consumer Price Index, excluding energy prices, the study said. More than half of the drugs increased by three or more times the inflation rate, while a quarter stayed the same.

LONGEVITY MISCONCEPTIONS - (2003) A MetLife survey reveals that pre-retirees are seriously underestimating their own longevity and how much money they will need in retirement. Only 37% believe that an individual who reaches age 65 has a 50% chance to live beyond life expectancy of age 85. Similarly, only 23% understand that longevity risk -- the likelihood of outliving your assets -- is the greatest financial risk facing retirees. Nearly 35% believe they can withdraw 7% from their savings annually, nearly double what experts recommend and 61% of respondents incorrectly estimated the expense of nursing home care.

LTC: More than 35% of LTC benefits paid in 2001 were to those under the age of 40.

Assisted Living Facilities

Minnesota Cognitive Acuity Screen An excellent tool to screen for senile dementia at a cost of $95. It is used by some LTC companies as part of their underwriting.

Means to a Better End: A Report on Dying in America Today

The reason for private LTC- Medicaid pays nursing homes the equivalent hourly rate of a baby sitter to care for the nation's frail and infirm seniors. Nurse's aides often make minimum wage

LTC Costs- A Met LIfe study indicates that the average nursing home stay is 2.4 years. The projected cost in 2003 is $66,153 per year, or $158,766 for the average stay.

1 Alaska $166,700

2 New York City $105,500

3 Connecticut $ 97,400

4 Boston $ 89,800

5 Hawaii $ 84,700

6 District of Columbia $ 82,800

7 Massachusetts (other than Boston) $ 80,200

8 New Jersey $ 80,100

9 New York (other than NYC) $ 78,700

10 Maine $ 72,800

According to the U.S. Administration on Aging, on average, men and women who reach age 65 can expect to live until the age of 81 and 84 respectively. The longer people live, the greater the chance they will require assistance with Activities of Daily Living (ADLs) like toileting, transferring, bathing, dressing and eating. Statistics show that new nursing home residents require assistance with at least four ADLs, making it difficult for them to receive home care.

Currently, 6.4 million people age 65 and older need long-term care; one in two over age 85 require care and assistance with ADLs. As a result, the need for nursing home or home care is great. In 2000, 4.5% of people 65 and older lived in a nursing home, but that percentage increases sharply with age. In that same year, 18.2% of those over 85 lived in a nursing home.

Most individuals enter a nursing home following hospitalization. Typically, 72% of residents are female, 57% are widowed, 46% are age 85 and older and 85% are white. African American nursing home residency was 10% in 1999, an increase of four percent from 1985. Only one percent of the total nursing home population is Asian or Hispanic.

In 1998, formal, or paid, home care services were used by 28% of individuals aged 50-64 who required help with ADLs. Also in 1998, 48% of those in the 75-84-year-old age bracket used paid home care. According to the National Association of Home Care, there were more than 20,000 home health care providers in 1999.

LTCI COMPANIES - GROWTH VS.PROFITABILITY - (2003) Conning reports that despite high historical and projected growth, the entire long-term care insurance industry and many of its leading companies are destroying value. "We have seen a sustained period over which many of the market leaders have under priced their individual long-term care products in an effort to rapidly grow market share. This in turn, has created tremendous pressure on profitability.

That is why you use just the top 8 or 10 companies with the highest of ratings and experience.

Long term care: (2003) Massachusetts nursing homes, wherein private and insurance pay residents, will be expected to subsidize the Medicaid beds to the tune of $9.60 per day.

“The nationwide average (for a private nursing home room) jumped 8% since April of last year when the last MetLife survey was conducted, from $168 per day” (to $181 per day). “The study found that the cost of a home health care aide averaged $18 per hour nationally, a 2.9% increase from last year.”

“Studies indicate that the average nursing home stay is 2.4 years. The projected cost in 2003 is $66,153 per year, or $158,766 for the average stay.”

* The total number of uninsured for long-term care is 82 million.

* 89 percent of those between 45 and 64 are uninsured for long-term care.

* For those 65 and over, 77 percent are uninsured for long-term care.

The percentage of nursing home costs paid by government (mostly Medicaid and Medicare) has been going up for the past 13 years (from 49.6% in 1988 to 61.5% in 2001, up 11.9%) while out-of-pocket costs have been declining (from 38.5% in 1988 to 27.2% in 2001, down 11.3%).

America spent $33.2 billion on home care in 2001. Medicare and Medicaid paid 51.5% of this total and private insurance paid 21.1%. Only 19.0% of home health care costs were paid out of pocket. The remainder came from several small public and private financing sources.

"Sizable reductions in Medicare payments between 1997 and 1999 led approximately 3,500 agencies to merge, withdraw from Medicare, or close entirely."

LTC- (2003) The average annual cost of nursing home care is now $57,000 and can reach as high as $166,700 in Alaska. The survey found that costs varied widely, from a low of $69 per day at a nursing home in Oklahoma to a high of $720 per day at a facility in Alaska. Louisiana has the least expensive average annual cost of nursing home care at $35,900, the survey said.

The totals did not include costs for therapy, rehabilitation or medications.

Federal LTC coverage

Male 46%

Female 54

Average age of active civilian participants 51

Average age of active military participants 45

Chose compound inflation protection 69

LTC: Certain nursing homes and services that have a growing private pay patient load may cut their losses- or even make money- by having empty beds rather than staff and resource for underpaid beds.

Last year a major LTC entity reported on the growing nursing home trend of cost shifting Medicaid patient costs to the private pay patients because their particular state had maxed out their Medicaid budget and the Medicaid daily payment level was not enough to sustain the cost of care, creating cash shortfalls for the providers. .Others evicted Medicaid patients to make room for more private pay patients. The law does allow nursing home to maintain Medicaid/Medicare certification under certain bed reductions.

LTC- (2003) “One of the most important and potentially costly components of any long-term care insurance plan of protection is the ability to receive care in one’s own home. average daily payments for home care benefits were $75 or less for 85 percent of LTCi claimants of a leading national insurer. “Nearly two thirds of their home care claims (64%) lasted 12 months or less,” . Some 44 percent of closed home care claims lasted less than six months

LTC- In the Netherlands long term care for elderly people, whether received at home or in nursing or residential care homes, is paid largely out of a compulsory insurance premium levied on the whole population, thus embodying the principle of social solidarity.

Click the link for lots more LTC

Getting Older: (2003) By 2030, 20 percent of the population, or 70 million people, is expected to be 65 years or older, compared with almost 13 percent, or 36 million today. Retirees will take $670 billion from their investments for living expenses in 2012, up from $134 billion in 2001

Geriatric Medicine: Long term care

Long-Term Care: Consumer Protection and Quality-of-Care Issues in Assisted Living

Assisted Living: facilities around the country (2003)

Place Base Rate

Washington, D.C $4,429

Stamford, Conn. 4,073

Bridgewater, N.J. 3,886

New York 3,830

Chicago 3,659

Raleigh, N.C. 2,820

Billings, Mont. 2,815

Seattle 2,783

Providence, R.I. 2,688

Los Angeles 2,226

Charlotte, N.C. 2,114

Las Vegas 2,014

Orlando, Fla. 1,973

Charleston, S.C. 1,900

Miami 1,830

Denver 1,564

Phoenix 1,536

Scranton, Pa. 1,444

Grand Rapids, Mich. 1,381

San Diego 1,992

Jackson, Miss. 1,020

Assisted living: (Met LIFE 2003) The average cost of a month's stay, including room and board, housekeeping and personal-care assistance, has jumped to $2,379 a month, up 10.2% in the past 18 months.

People who move into such facilities stay there three years on average, according to the National Center for Assisted Living, .

Fees for assisted living climbed faster than the consumer price index, which rose 2.2% during the 12 months ended in August. Overall medical-care prices rose 3.9%.

One factor driving costs upward is a "huge increase in liability insurance".

Constricted supply is also a problem, she says, with the assisted-living facility "becoming a place of choice for people who can afford it as a viable alternative to a nursing home."

The people moving in are "a little frailer than what the facilities thought they would be handling

The additional $220 a month on average can be tough on families, since Medicare and Medicaid typically don't cover the rent (with the exception of a few states with experimental Medicaid-waiver programs). Two-thirds of assisted-living residents pay out of their own pockets, and about 13.5% use Supplementary Security Income, MetLife says. What's more, at least 64% of residents are cognitively impaired when they move in, and their round-the-clock supervision can bump costs even higher.

LTC BULLET: CONNECTICUT ATTACKS MEDICAID PLANNING TO SAVE MONEY AND ENCOURAGE PRIVATE LTCI (2003)

The single greatest barrier to increasing the role of private LTC financing--and thereby reducing the strain on public programs and providers--is the steady expansion of public financing beyond its intended safety-net function and the resulting impact on perception and behavior. Despite recent budget-related cutbacks across the nation, the extent to which Medicaid and Medicare do fund LTC services for a growing segment of the population anesthetizes the public from taking seriously the LTC risk. Why save, invest or insure when it seems the government pays for long-term care? This perception problem is made worse by the success of professional Medicaid planners who help their clients maneuver and manipulate Medicaid's ostensibly strict eligibility rules to qualify for taxpayer-financed benefits without spending down.

The State of Connecticut recognizes the negative impact of Medicaid planning on promoting personal responsibility and a more evenly balanced LTC financing system and is proposing to do something about it. Connecticut's Department of Social Services recently submitted a groundbreaking waiver proposal to the Center for Medicare and Medicaid Services (CMS; formerly the Health Care Financing Administration). The "Transfer of Assets Section 1115 Research and Demonstration Waiver Proposal" seeks to modify several Medicaid eligibility provisions with a central goal of reducing asset transfers for the purpose of qualifying for Medicaid and thus increasing the extent to which people pay privately for their care. This change of behavior, in turn, would realize substantial savings for the state's Medicaid program. Section 1115 of the Social Security Act authorizes the Secretary of Health and Human Services to waive State Medicaid Plan requirements of Title XIX for purposes of carrying out an approved demonstration project.

The CT Department of Social Services is seeking waivers specifically to:

(1) change when a penalty period is imposed for individuals who transfer assets for less than full market value in order to qualify for Medicaid--tolling the penalty period from the date of eligibility for Medicaid LTC services rather than the date of the transfer because the latter method allows for transfer strategies which render meaningless the imposition of a penalty (see below for an explanation of the notorious "half-a-loaf" strategy);

(2) lengthen the look-back period for transfers of real property from 36 to 60 months; and

(3) create threshold transfer levels that would allow cumulative transfers within certain dollar and date ranges to be disregarded in order to streamline the application process.

The Department predicts savings of more than $87 million over five years and expects the project to be a model for others states and the federal government. The proposal itself does an excellent job of presenting the desired rule changes, gives helpful scenarios to explain how the changes would affect Medicaid applicants, and provides detailed budget, caseload and cost projections with and without the requested waiver changes.

American Association of Daily Money Managers , Members pledge to follow a code of ethics and can help balance check books, organize paperwork, write checks, make deposits, etc. Useful if you have a loved one that needs care in another area. Fees range from $25 to $60 an hour depending on the area of the country.

LONG TERM CARE EXPERIENCE INTERCOMPANY STUDY LINK: 1984 - 1999 Society of Actuaries (pdf 366 pages) Exceptional material

LTC premiums: Society of Actuaries

Choosing An Assisted Living Facility: (2003)

Nurses: Long Nurses’ Hours Endanger Patients A new study by the National Academy of Sciences finds that requiring nurses to work more than 12 hours a day puts hospital and nursing home patients at serious risk. According to the report, “Fatigue slows reaction time, decreases energy, diminishes attention to detail, and otherwise contributes to errors.” Recommendations for correcting the problem include: prohibiting nurses from working more than 12 hours during a 24-hour period or more than 60 hours a week; requiring hospital intensive care units to have one licensed nurse on duty for every two patients; requiring nursing homes to have one registered nurse for every 32 nursing home patients; and one nursing assistant for every 8.5 patients.

Iowa Long-Term Care: A Consumer Survey of Adults Age 50 and Over

While the majority of age 50+ Iowans believe they can afford the cost of long-term care services, a sizable proportion of those who have sought financial assistance to pay for care have experienced difficulty in obtaining assistance in a timely manner. Other findings of this survey of 1,000 midlife and older Iowans include:

Nine-in-ten respondents report that nursing home care (94%), home-delivered meals (90%), and home health care (90%) are available in their community; however, only half (52%) report the availability of adult day care centers.

Of those needing long-term care in the past five years, 29 percent report applying for financial assistance, and 81 percent of these individuals received some form of assistance.

Of those applying for assistance:

10 percent report it was very difficult to complete the application process while 28 percent found the process somewhat difficult

27 percent report meeting with the agency representatives three or more times to determine their eligibility for services

29 percent report waiting for more than a month to get services

While many respondents say they are very confident (34%) or somewhat confident (34%) they could afford home and community-based care for two years, only half are very confident (23%) or somewhat confident (30%) they could afford the cost of nursing homes or assisted living facilities for two years.

More than half strongly agree (27%) or somewhat agree (24%) that they would rather do without long-term care services than apply for public assistance, and 8 percent report knowing someone who did without care rather than apply for assistance.

About a third of Iowans have had a long-term care experience in their family in the past five years, and majorities rated this care as excellent or good.

In the past five years, nearly two in five (38%) Iowans have either used long-term care themselves or had a family member who did. Of these, most experiences were with assistance at home from family members, nursing homes, and assistance at home from skilled professionals.

Fewer than half mention assistance at home from a home health aide, assisted living facility, and adult day care.

Services Used by Those Needing Long-Term Care in Past Five Years

Adult Day Care (n=31) 8%

Assisted Living (n=86) 23

Home w/ Health Aide (n=151) 40%

Home w/ Professional Help (n=212) 56%

Nursing Home (n=260) 69%

Home w/ Help Family & Friends (n=264) 70%

Mid-life and older Iowans express a strong interest in staying in their own homes as they get older. Most believe that long-term care can be provided either by family members or by paid professions who come into the home. A majority of respondents believe that their communities have a complement of services that they will need as they age.

Paying for long-term care, especially care provided either in a nursing home or assisted living facility presents concerns for a substantial portion of Iowans age 50 and older. Only half of respondents report that they are confident that they could afford a nursing home or assisted living facility for two years. Complicating this situation, many Iowans are not fully cognizant that Medicare and health insurance policies do not cover long-term care for more than a limited time. Consequently, they have not fully investigated alternative methods for funding this care. Without prior planning, a proportion of Iowans may find these services beyond their financial means.

Alarmingly, nearly half of respondents state they would rather do without long-term care services than apply for public assistance. Consequently, large numbers of Iowans potentially may be at risk.

Of the nearly two in five respondents who say that they or a family member needed long-term care in the past five years, nearly three in ten did not have the resources to pay for the care. When they sought financial aid either through Medicaid or other assistance programs, a sizable proportion experienced difficulties. A substantial percentage found it difficult to complete the applications process; notable percentages had to meet with a geriatric case manager three or more times to ascertain their eligibility; and about three in ten had to wait a month or more to get the long-term care services that they needed. These problems speak to the need for system reforms such as a streamlined application process and reduced waiting lists.

Mid-life and older Iowans are looking to the state government to play a major role in the longterm care arena. Nearly all respondents believe that the state government should play a major role in ensuring quality. Three in four also are looking to state government to expand their longterm care choices.

Geriatric Medicine: Long term care

Long-Term Care Underwriting Declined Applicants Rise Significantly With Age

Age of Applicant Percentage Declined Percentage Issued Percentage of Apps Received

0-50 10 90 1.6

50-60 15.4 84.5 10.8

60-69 15.7 84.3 40.1

70-79 27.6 72.4 38.2

80+ 39.7 60.3 9.3

Average 22.3 77.7 100

Source: Reprinted with permission of LTCi Sales Strategies magazine, Vol. 5, No. 2, June 2003, www.LTCsales.com. Study performed by Weekly Actuarial Services, www.weeklyactuarial.com.

Overseas nurses: (2003) For more than three decades, American hospitals, periodically short of skilled nurses, have aggressively recruited nurses from the Philippines, sometimes enticing them with bonuses of thousands of dollars. They prize Filipino nurses for their English-language skills and their education in public and professional schools that are modeled on American counterparts.

The hospitals also value the nurses for their work ethic, their loyalty to employers and a tenderness that seems to stem from a culture where people insist on caring for their own aging or sick relatives.

Average Assisted Living Cost

Locality Monthly Annually

Statewide, AK $4,036 $48,432

Billings, MT $2,815 $33,780

Birmingham, AL $1,944 $23,328

Charlotte, NC $2,114 $25,368

Montgomery, AL $1,922 $23,064

Raleigh, NC $2,820 $33,840

Little Rock, AR $1,587 $19,044

Fargo, ND $1,994 $23,928

Phoenix, AZ $1,536 $18,432

Omaha, NE $2,508 $30,096

Tucson, AZ $2,423 $29,076

Manchester, NH $1,904 $22,848

Los Angeles, CA $2,226 $26,712

Bridgewater, NJ $3,886 $46,632

San Diego, CA $1,992 $23,904

Cherry Hill, NJ $3,045 $36,540

San Francisco, CA $2,795 $33,540

Albuquerque, NM $2,005 $24,060

Colorado Springs, CO $1,820 $21,840

Las Vegas, NV $2,014 $24,168

Denver, CO $1,564 $18,768

New York, NY $3,830 $45,960

Hartford, CT $2,580 $30,960

Rochester, NY $2,681 $32,172

Stamford, CT $4,073 $48,876

Syracuse, NY $1,901 $22,812

Washington, DC $4,429 $53,148

Akron, OH $2,616 $31,392

Wilmington, DE $3,383 $40,596

Cleveland, OH $2,720 $32,640

Jacksonville, FL $1,987 $23,844

Columbus, OH $2,560 $30,720

Miami, FL $1,830 $21,960

Oklahoma City, OK $1,914 $22,968

Orlando, FL $1,973 $23,676

Tulsa, OK $2,494 $29,928

Alpharetta, GA $2,194 $26,328

Eugene, OR $2,251 $27,012

Atlanta, GA $2,459 $29,508

Portland, OR $2,270 $27,240

Honolulu, HI $2,990 $35,880

Philadelphia, PA $1,680 $20,160

Des Moines, IA $2,351 $28,212

Pittsburgh, PA $2,052 $24,624

Boise, ID $2,239 $26,868

Scranton, PA $1,444 $17,328

Chicago, IL $3,659 $43,908

Providence, RI $2,688 $32,256

Highland Park, IL $3,775 $45,300

Charleston, SC $1,900 $22,800

Indianapolis, IN $1,956 $23,472

Columbia, SC $1,281 $15,372

Wichita, KS $2,117 $25,404

Dell Rapids, SD $1,557 $18,684

Lexington, KY $2,315 $27,780

Memphis, TN $2,573 $30,876

Louisville, KY $2,973 $35,676

Nashville, TN $1,718 $20,616

New Orleans, LA $2,819 $33,828

Dallas, TX $2,566 $30,792

Shreveport, LA $1,865 $22,380

Ft. Worth, TX $2,094 $25,128

Boston, MA $2,454 $29,448

Houston, TX $1,983 $23,796

Worcester, MA $3,090 $37,080

Salt Lake City, UT $1,776 $21,312

Baltimore, MD $2,133 $25,596

Arlington, VA $3,163 $37,956

Silver Spring, MD $2,410 $28,920

Richmond, VA $2,667 $32,004

Brunswick, ME $3,297 $39,564

Rutland, VT $1,980 $23,760

Detroit, MI $1,297 $15,564

Seattle, WA $2,783 $33,396

Grand Rapids, MI $1,381 $16,572

Spokane, WA $2,575 $30,900

Minneapolis, MN $2,110 $25,320

Madison, WI $3,210 $38,520

St. Paul, MN $2,906 $34,872

Milwaukee, WI $2,390 $28,680

Kansas City, MO $1,608 $19,296

Statewide, WV $2,320 $27,840

St. Louis, MO $2,281 $27,372

Statewide, WY $2,059 $24,708

Jackson, MS $1,020 $12,240

Average $2,379 $28,548

*There may be extra charges for ADL assistance beyond the base rate, or for Alzheimer’s disease or related conditions.

As of 2000, approximately 800,000 individuals in the U.S. resided in assisted living facilities. According to the National Academy for State Health Policy, in 2002 there were 36,399 assisted living facilities in the country, an increase of 48 percent from 1998. The typical assisted living resident is female, between the ages of 75 and 85. Males comprise 31 percent of assisted living residents.

Purchase LTC Age Monthly Total Premiums Amount Saved if policy had been purchased at age 45

45 $63 $26,460

55 $152 $45,600 $19,140

65 $265 $68,940 $42,480

Long Distance Caring During the Holidays

Into the Hands of Strangers: Placing A Loved One Into A Nursing Home

Long Term Care Updates

The 2004 the eligible Long Term Care premiums treated as a medical expenses;

Attained Age Premium Limitation

40 or less $260

40 to 49 $490

50 to 59 $980

60 to 69 $2,600

70+ $3,250

Long-Term Care: (2004)Although the long-term-care market is dominated by individual sales, group long-term-care participation got a 64% boost during the first nine months of 2003 because of a new program that offers the coverage to federal employees.

ODDS: (2004) The probability that an 81-year-old female will die within a year is 5%.

LTC: (CareQuest University President Robert Pearson 2004) "Very few people in this country, including the financial and care advisors we depend on so heavily, understand the continuum of long-term care." "Most only understand their own piece of the Long Term Care industry, and that's one of the reasons that this long-term care crisis has been slow in developing solutions." "Financial planners, insurance sales professionals, attorneys, benefit consultants and human resource professionals may have a good understanding of the benefits and features of long-term care insurance plans and the contract language. Most, however, have no idea how the internal workings of that kind of financial instrument come together. Nor are they aware of the other financial solutions that are now available. "What's missing is the why and how of: pricing, design, plan evolution, tax treatment, suitability, comparative values, regulatory mandates and the future of this financial instrument," "That's where some of the problems come in -- that, plus the misuse and misunderstanding of the Medicaid system."

As a result of the general market confusion a growing number of consumer advocacy groups, AARP, insurance departments -- and even NAIC -- are starting to look at pressuring the industry to develop advisor education beyond the brochures, outlines and policy contracts. No more elementary product training; instead, a comprehensive education about the Long Term Care.

LTC- The $4.5 million private long term care policies could save Medicaid and Medicare about $30 billion

Private research by Life Plans, Inc, indicated that LTC coverage saved an average of $1,668 in out of pocket expenditures per month for insured who used home care and $2,458 per month for insured who needed nursing home care.

Private LTC reduced the probability that an insured would become poor enough to qualify for Medicaid nursing home assistance to 3% from 9%.

Private LTC coverage could save Medicaid $23 billion or $5,302 per insured for all forms of LTC care and Medicare $7 billion or $1,609 per insured for home care.

LTC: In 2002, America spent $103.2 billion on nursing home care:

Together, Medicaid and Medicare paid 64 percent, almost two-thirds of this total. That's up from less than half in 1988.

On the other hand, so-called "out-of-pocket costs" accounted for only 25 percent of nursing home expenditures in 2002, down from 39 percent in 1988.

"The Coming Wave: Professional Liability Lawsuits for Failure to Recommend a Plan for Long-Term Care" by Harley Gordon, Attorney at Law (2004)

SYNOPSIS:

No reasonable financial planner doubts that clients are expected to live a long life after retirement: calculations routinely take into consideration a life expectancy into the early 90s. Less often considered is the need for long-term care and the serious impact it has on the best-thought-out retirement plan. Failure to talk about these consequences may subject financial planners to a claim of breach of due diligence.

A REAL STORY

Sheila Adams (not her real name) is a seasoned financial planner with a major mid-west insurance company. She is also one of its top producers. Like a growing number of professionals she takes the subject of long-term care seriously and talks about its consequences with clients. Apparently talking about it may not be enough.

Ms. Adams received a call from a good client's son, a local attorney. He proceeded to tell her that his dad was in a nursing home and paying for it with his life savings. He then told her:"You have 15 minutes to produce evidence that you recommended a long-term care plan in general and long-term care insurance in particular."

Fortunately, she had discussed the matter and had a letter recommending the sale of long-term care insurance. Without it, she believes she would have been sued.

LIVING A LONG LIFE IS A NEAR CERTAINTY, PLANNING FOR IT IS A NECESSITY

A July 14th, 2003 article in USA Today, "Insurers Adjust to Aging US Population." sums up why financial planners are talking to their clients about the need to adjust the payout of retirement portfolios. The article reported:

* Life insurance rates for 70+ Americans have dropped between 5% and 20% in the past few years;

* By 2035 this group will more than double to 57 million;

* The fastest growing segment of the US population is 85 plus;

* Insurers count family history far less if people reach 70 because illnesses that killed their parents are far less likely to kill the insured;

Advances in medicine are now taken for granted. Every day brings new treatments for illnesses once considered deadly. A June 6, 2003 story in the Boston Globe only confirmed what many believe: Cancer will be cured in their lifetime. "Advances Begin to Tame Cancer" reported:

* Rapid advances in diagnosing and treating cancer have dramatically increased life expectancy;

* This is particularly true with deadlier forms such as pancreatic and brain cancer;

* By the year 2015, cancer will be classified as a chronic illness manageable with new classes.

A reasonable corollary is that an increased life expectancy creates a need for more services as the aging process takes its tool in the form of chronic debilitating diseases such as dementia, chronic obstructive pulmonary disease, crippling arthritis and congestive heart failure. Rarely however do financial planners discuss with clients the impact providing care will have on the family and their retirement plan. The reason is a lack of confidence based on a lack of knowledge of the profession of long-term care.

THE NEED FOR LONG-TERM CARE MUST BE DISCUSSED

No financial planner will risk his or her credibility talking about a subject they do not understand. It's basic to their identity as professionals. Few financial planners discuss the subject of long-term care because they do not fundamentally understand what long-term care is.

Long-term care is a continuum of care, housing and services needed when the aging process begins to exact a toll on our cognitive and physical capacity. It requires almost exclusively custodial, not skilled care. Custodial care is defined as assistance with one's activities of daily living (toileting, bathing, dressing, eating, transferring and continence) or supervision necessitated by a severe cognitive impairment. Skilled care is medical in nature requiring a plan of care created by a doctor for the treatment of complex medical issues and executed by a skilled nursing staff.

Ironically it is not necessarily the afflicted who suffers most, but rather the caregivers: He or she will be taken care of by their family which struggles to provide the care necessary to keep their loved one in the community. This effort exacts a terrible price on the caregiver's health (typically a daughter) and relationships with other family members, most notably those siblings who do not share the burden.

Anyone doubting this assessment need only ask someone who have been through it.

Understanding this essential fact is the first step in creating the confidence to bring the subject matter up in the ordinary course of creating a retirement plan. It allows the financial planner to ask the right questions, the most basic being "Have you thought about the consequences living a long life will have on your family?"

FINANCING LONG-TERM CARE IS A CRITICAL PART OF ANY RETIREMENT PLAN

Long-term care is financed primarily by the family in the form of unpaid labor referred to as informal care. Formal care, that provided by trained professionals including home health aids and facility care such as assisted living and skilled nursing home care is expensive. Since few financial planners set aside funds or recommend long-term care insurance (LTCi), the client is forced to rely on either a government program such as Medicare, Medicaid or the VA or must ultimately reallocate retirement income and assets. A brief analysis of these programs indicates they are not the answer clients wish to hear.

Medicare is the primary health care system for those 65 or older. It pays for skilled and or rehabilitative care. Although never intended to do so, the program routinely paid for custodial care prior to 1998. Businesses such as home health care providers figured how to bill for services by making a custodial care patient look like he or she needed skilled or rehabilitative care. Medicare put an end to it with the passage of the

Balanced Budget Act of 1997 by replacing fee for service (which encouraged abuses) with a flat fee.

Medicare was essentially returned to its roots paying for medical not custodial care.

Medicaid is a federal and state partnership based on financial need. Originally designed for the poor and near poor it was appropriated by middle-class families looking for a way to avoid bankruptcy caused by the high cost of nursing home care. So called Medicaid planning practiced by elder law attorneys grew into an immensely popular field. Its impact on federal and state Medicaid programs has been such that in recent years there has been a concerted effort to shut down loopholes.

Even when the attorney qualifies the client for benefits, Medicaid is far from free, a fact not often discussed by unskilled practitioners.

Most families have qualified or low cost-based assets. Transferring them creates serious tax issues. Medicaid planning protects assets not income. If a spouse has a large pension or retirement payout, it is lost to the nursing home thus causing serious repercussions to the spouse at home.

Then there is the issue of where the client wants care. No one wants to go to a nursing home. Yet Medicaid planning accomplishes only one thing, qualifying the individual for payment in a nursing home. Medicaid pays little or nothing for home care, adult day care and assisted living.

Veterans often site the Veterans Administration as source of funding for custodial care. It is not. The VA may pay for care but in only limited situations and usually requiring a financial contribution. In point of fact the federal government has stated as much by encouraging active and retired military personnel to purchase LTCi through the Federal Long-Term Care Insurance programs created by MetLife and John Hancock.

That leaves cash or long-term care insurance.

LONG-TERM CARE INSURANCE IS SEEN BY MANY FINANCIAL PLANNERS AS A PROBLEM NOT A SOLUTION

Put bluntly financial planners have a problem with long-term care insurance. Historically the long-term care insurance industry has focused on selling product rather then selling a plan for long-term care. This puts it squarely at odds with financial planners who make their living selling a plan to protect the client's family and assets. Those plans range from estate preservation and business succession to basic wealth creation for young couples.

Every professional designation from CFP to CLU reinforces this basic principle of professional conduct by teaching how to ask the right questions and work with other professionals such as estate planning attorneys and CPAs to draft the right plan. Although financial planners are certainly subject to malpractice claims, it is less likely they revolve around failure to establish and fund a plan.

If a financial planner does not understand the subject of long-term care, he or she cannot ask the right questions, which leads to a discussion of the consequences on not having a plan. In turn this leads to the establishment of a plan for providing care. All plans must be protected with insurance. It's just like selling life insurance. If the subject is brought up, it is usually in the context of suggesting LTCi as a way of protecting assets not protecting a plan for long-term care. This creates the potential liability.

PROFESSIONAL LIABILITY FOR BREACH OF DUE DILIGENCE

Due diligence: "The care that a reasonable person exercises under the circumstances to avoid harm to other persons or their property." Merriam-Webster's Collegiate Dictionary

There are four areas where financial planners face potential liability:

1. Failure to talk about a plan for long-term care as part of a financial retirement plan;

2. Simply selling long-term care insurance (LTCi) disconnected from a plan for long-term care;

3. Selling the wrong type of policy and amount of coverage;

4. Failing to talk about the subject with wealthy clients who think they can self-insure the cost.

"I talked with the prospect about LTCi and he didn't purchase it. I even had him sign a waiver. How can I be held liable?"

The initial review of a case for an attorney specializing in professional liability focuses on determining what, if any, responsibility a financial planner has to a client and then deciding whether it was breached. It is reasonable to assume that if producers are talking about the risks of needing long-term care as part of their presentation on selling LTCi, they are holding themselves out as a specialist. That would appear to establish a threshold responsibility to use due diligence in protecting the interests of the prospect.

The liability arises when the producer focuses only on making the sale and doing so through scaring the prospect into submission with numbers and charts that talk about impending doom. If a policy is not sold and the individual needs care, the family (read: children) can argue that the producer never discussed the family and financial consequences inherent in needing long-term care. In other words, the presentation was about selling a product, not working with the individual to establish a plan.

The lawyer most likely can brush aside the waiver of liability by arguing its intent was not to absolve the producer of liability but rather as a sales gimmick to embarrass the person into purchasing the product.

"My client purchased LTCi based on my recommendations. How can I be held liable?"

Simply selling LTCi is not enough. For example, I have seen far too many policies with a $50.00 a day benefit. What is that amount going to cover? The risk of diverting income and invading principal otherwise allocated for retirement is an almost certainty, should the person need long-term care. Worst, if the individual needs skilled nursing home care, he may actually qualify for Medicaid. Part of the patient paid amount would be the daily benefit. Imagine the anger children have when they find (a) the benefit didn't prevent invasion of principal (read: their inheritance) and (b) the premium their parent paid is going to help Medicaid by reducing its cost.

Arguing, "some coverage is better than none" at best is amateurish and at worst exposes the financial planners lack of understanding about how long-term care impacts a family and its retirement plan.

Another example: A financial planner recommends a three-year benefit based on his worry that the cost of a lifetime benefit may kill the sale. The client goes on claim and exhausts the policy. He now invades principal, most of which is qualified funds to pay for the cost of care. Federal taxes on lump-sum distributions run as high as 37% (plus state income tax).

The family argues that the producer should have considered the tax consequences of cashing in qualified funds. Had he done so it would have become obvious to the insured that a lifetime benefit was the appropriate recommendation. The producer is accused of breaching his responsibility to exercise due diligence in protecting the financial interests of his client.

"My client has $2,000,000, more than enough to pay for the cost of care. . . ."

It never ceases to amaze me when I hear a seasoned financial planner tell me he or she does not recommend LTCi to his wealthy client. When I ask if they recommend a Medicare supplement policy to the same people, they answer: "Of course!" Think about that for a moment: the client is paying $2,000 a year to cover perhaps $10,000 worth of exposure. Compare that with the expenses associated with needing long-term care.

The issue that will be raised by the children is not that the parent had enough to pay for care but rather why did the parent have to use his or her funds at all.

"I work with an attorney who believes that for families with modest estates, a LTCi policy with a three year benefit combined with Medicaid makes financial sense. Where is the liability?"

At first glance this strategy makes sense. The attorney seemingly believes in the product but suggests, because of the limited estate (usually under $300,000) and high cost of LTCi, only a three-year benefit.

A closer look reveals that the attorney believes in Medicaid planning with the intent of using LTCi as "bridge financing" to the program. That philosophy can have disastrous effects for the financial planner. Here's how it works:

Medicaid, a federal and state program based on financial need will pay for custodial care in a skilled nursing home. The state has the right to look-back three years from the date an application for benefits is submitted. The thinking goes therefore that as long as three years expires from the date of gifting, thereafter Medicaid will pay.

Example

Susan transfers $600,000 on February 1, 2004. She will qualify for benefits on February 1, 2007. The attorney therefore recommends a three-year benefit. He tells the client to gift everything the day he gets sick. The policy covers the next three years of care. When it runs out Medicaid will pay.

The problem

The advice is based on a fundamental misunderstanding of long-term care and the tax code:

1. Most clients have qualified funds. By definition, the three-year look-back begins only on the date assets are gifted. Result: Instant tax;

2. Many clients have low cost-based assets. Gifting them also transfers that basis. Result: A 15% tax on the capital gain when the children sell the assets;

3. The attorney assumes the client will need nursing home care when the policy runs out. What if he doesn't? Medicaid pays almost exclusively for nursing home care, not home care, adult day care or assisted living. Families will do almost anything to keep their parents out of a facility. The only choice left is to make a placement thus having Medicaid pay or re-transfer the funds back.

There is little doubt that the attorney will have to answer to the family when the transfer is made. The error is compounded by the children paying privately as they continue to keep their parent home.

THE SOLUTION IS IN THE PLAN

Simply raising the issue of needing long-term care as mentioned is not the solution. The answer lies in recognizing that long-term care planning is a profession that requires the same commitment financial planners make to the financial and estate planning profession.

This includes a thorough understanding of elder care issues, elder law and care resources. It requires in-depth knowledge of what finances long-term care with particular attention paid to the Medicare and Medicaid, resources clients often believe will provide funding. Without the facts financial planners will continue to hesitate discussing the subject of long-term care for fear of encountering objections they cannot deal with assertively.

Understanding the business of long-term care allows:

1. The right questions to be asked which leads to;

2. Entering a discussion based on commonly held convictions including that clients absolutely believe they will live a long life. They so much as tell financial planners that every time they ask for reassurance that principal will remain intact after retirement. Establishing the basics leads to;

3. A discussion of the consequences long-term care has on a family and their best thought out retirement plan. In turn this leads to;

4. The establishment of a plan for providing care. It includes having the client think about who will provide care and where it will be delivered;

This leads to;

5. A discussion of how the plan will be paid for. This allows the financial planner to talk about the impact needing care will have on the client's retirement plan. It includes a statement that the plan allocates income and assets for retirement not for long-term care. That since no federal program will pay, the client is forced to rely on self-funding. Since few clients want to invade principal the discussion turns to the subject of insurance.

LONG-TERM CARE INSURANCE

The subject of long-term care insurance (LTCi) has been purposely left to the end of this piece. Too often it is raised as the solution to going bankrupt paying for a nursing home, not having choice or having to rely on friends or children. It rarely is discussed in the context of protecting a plan but rather as a stand-alone product.

Long-term care insurance is a complex product. It should not be left to the client to decide what he or she wants. How on earth does the consumer know what daily benefit to buy and for how long? How many understand the difference between reimbursement, cash and indemnity payments? Do they buy a joint policy or a shared benefit policy? The complexity of the product creates the perfect opportunity for financial planners to craft the right benefits to protect the long-term care plan.

However, the product like any insurance product is dangerous in the wrong hands. As has been illustrated, financial planners still risk being sued for recommending the wrong type of benefit or wrong period of time.

Before making the commitment to suggest LTCi, financial professionals are well-advised to make the commitment to understand the profession of long-term care planning. Once the professional feels comfortable discussing the subject it is more likely he or she will integrate it into a retirement plan. As with all plans, insurance is a critical component in making sure it executes properly.

LTC: The average issue age for group LTC insurance is 49, according to the the Society of Actuaries LTC Experience Study. The study spans group LTC experience data from 1984 through 1999.

But it must include all employee enrollments because the average age for individual purchase is closer to 65.

LTC: Here is why so many financial journalists should be canned: This is the lead in from the WSJ for Terri Cullen's article on why you may not need a LTC policy:

Long-term-care insurance is designed to cover the costs of caring for people who are elderly or disabled, including the cost of nursing home or in-home care. But the myriad riders, clauses and exemptions for coverage make it seem nearly impossible to understand exactly what it is that you're buying. So why do so many consumers continue to purchase these policies amid the confusion? Simple: Fear and worry. Fear of a debilitating illness wiping out their life savings, and worry about burdening their families with future health problems. But long-term-care insurance is unnecessary for people with current savings and assets of more than $2 million (who can afford to self-insure) or people with assets of less than $50,000 (who will be covered by Medicare). For those who fall in between, though, it may worth some consideration. "

Do you see what is already wrong? There is no coverage by Medicare. Never has been for all intents and purposes.

That said, the simplistic commentary says that these are difficult contracts to interpret and that a consumer may need some outside help. Then it stops. No idea who to use or where to go. Cullen provides no real assistance- just says that it is confusing.

LTC: What's the combined value of long-term care insurance protection currently in-force? According to a study reported in the April, 2004 issue of Long-Term Care Insurance Sales Strategies magazine, it is $550 billion.

'Some six million Americans now own long-term care insurance and insurers already pay out over $1 billion in annual claims.'

"Sales of long-term care insurance have been surging recently by about 18% a year, with younger buyers leading the way. The average age of customers--72 in 1990-- has plunged to about 58, (HIAA)."

"Primer: Linking Reverse Mortgages and Long-Term Care Insurance," The George Washington University, Washington, DC. (2004)

LTC: Currently, the average age of a person getting a reverse mortgage is 75 years old, while the average age at time of purchase of a LTC insurance policy is 64 years old.

Court Rejects Nursing Home's Key Money Argument; Oak Crest Village, Inc., v. Murphy, February 9, 2004; Tim Takacs, Certified Elder Law Attorney 2004 A continuing care retirement community (CCRC), Oak Crest Village in Parkville, Maryland, operates three distinct, but integrated, levels of housing and health care: apartment units, where residents may live largely independent lives; assisted living units, in which residents receive greater attention to their health care needs; and a nursing home, Renaissance Gardens, in which residents receive continuous nursing care.

In June, 2001, Ruth and Sherwood Murphy filed a residency application with Oak Crest. On their application, they supplied detailed financial information, which revealed that the couple had about $ 450,000 in jointly owned assets, Sherwood had $19,000 in personal savings in his own name, Ruth had $126,000 in personal savings in her own name, and Ruth had an additional $68,000 in savings held jointly with her daughter.

The Executive Director at Oak Crest reviewed the information, concluded that the Murphys had sufficient assets to pay the requisite fees based on actuarial projections of their life expectancy, and accepted the application.

In November 2001, the Murphys moved into Oak Crest. Ruth, then 81, moved to an independent living apartment. Sherwood, then 94, was admitted directly into Renaissance Gardens.

As a condition to their acceptance into the CCRC, the Murphys were required to sign Residence and Care Agreements. Section 8.11 of those agreements contained a covenant that, unless they had the prior written consent of Oak Crest, Ruth and Sherwood would not divest themselves of, or sell or transfer, any of their assets or property interests if the sale or transfer would result in their respective net worth falling below the minimum necessary to become an Oak Crest resident.

Shortly after their move, Ruth transferred $356,000 of the couple's money into a joint account with her and her daughter and then purchased $280,000 in immediate annuities from that account. Sherwood then applied for Medicaid benefits and was approved effective June 1, 2002.

When Oak Crest learned that Sherwood had been approved for Medicaid, it sued the Murphys, alleging a violation of § 8.11 of Sherwood's Residence and Care Agreement. Oak Crest sought to have the transfer of Sherwood's assets annulled or to have him expelled from the nursing home.

Agreements such as Sherwood Murphy made are not uncommon in some states. A nursing home will admit a resident but only on assurances that the resident will pay privately for a certain period of time before applying for Medicaid. (The reserved funds needed to pay privately even have a name: elder law attorneys call it "key money.")

There's a small problem with this arrangement, however: it is illegal. A nursing home that accepts Medicaid is prohibited from extracting a promise from a resident not to apply for Medicaid. That is called a "condition of participation" that the facility agrees to in order to participate in the program.

In Sherwood Murphy's case, the Maryland Court of Appeals held that the state 's Nursing Home Residents' Bill of Rights applied to him: it is a statute that prevents a nursing facility from requiring that any resident pay at the private-pay rate for any period of time prior to making a Medicaid application.

The law prohibiting Medicaid-certified nursing homes from imposing a private-pay requirement is intended in part to prevent wealthier people from buying their way into better nursing homes, and consigning the less affluent to bad nursing homes.

In states such as Tennessee where the law is enforced, a resident is admitted to a Medicaid-certified facility either through a waiting list or from a skilled nursing facility, not by promising "key money."

Assisted Living study (USA Today 2004) USA TODAY's analysis of inspection records found patterns of medication mistakes, as well as failures in staffing and training, sometimes with serious consequences:

•Medication errors. More than 1 in 5 facilities inspected had been cited by state monitors for at least one significant violation. Common problems include failing to follow prescription orders, neglecting to ensure that residents take their medicine, or difficulties with drug-administration procedures, such as failing to have the procedures approved by a doctor. Some residents required medical care as a result of mistakes.

MEDICATION ERRORS

Problems with medication occur frequently at assisted living centers, state regulators say. Residents sometimes get the wrong medication or dose or don't have prescriptions filled on time. A USA TODAY database analysis of assisted living inspections in seven states found that more than 1 in 5 inspected facilities had been cited for at least one medication violation.

State Facilities inspected1 Inspected facilities with medication violations Percentage

Alabama 56 35 63%

Arizona 729 145 20%

Colorado 489 154 32%

Florida 2,534 514 20%

Indiana2 53 31 59%

New York3 45 15 33%

Texas 1,399 334 24%

Total 5,305 1,228 23%

1 — Totals include all centers examined with on-site visits for a two-year period in 2000-2002, not necessarily all facilities in each state. Data from one state cannot be compared with another because of variations in regulations and enforcement. 2 — Facility total includes only residential care centers licensed by the state. 3 — Facility total includes only centers licensed by the state to have assisted living beds. Source: USA TODAY research

•Training shortfalls. More than 1 in 4 had been flagged for at least one training deficiency. Violations ranged from failure to teach staff members cardiopulmonary resuscitation or first aid to inadequate instruction in caring for the frail elderly. An 85-year-old man choked to death in Brookside Gables, a now-closed facility in Milton, Fla., where state inspectors said the lone staffer on duty lacked mandatory training in lifesaving.

•Staffing deficiencies. Nearly 1 in 5 had been cited for having too few employees on a work shift, failing to have a qualified administrator on-site or other violations. An Arizona woman with Alzheimer's disease died after she fell in 100-degree heat outside her facility at a time when all but one staffer were in a meeting.

The data were not detailed enough to determine whether any specific type of facility was cited more or less often than another. Although one quality-of-care violation in two years might not sound alarming, many facilities had more. The true tally is almost certainly higher than official records show because some facilities don't report all mistakes and because oversight in many states is relatively weak and inconsistent. In some cases, state regulators said they didn't even know a facility existed until they got a complaint.

USA TODAY's analysis also found that many assisted living facilities neglect background checks on staff, potentially exposing residents to caregivers with criminal records. Faced with costly overhead, facilities also keep beds filled by accepting residents whom some state health care regulators say are too ill, frail or aggressive.

Health care experts say most of the nation's estimated 36,000 assisted living facilities provide quality care. As he emphasized that view, David Kyllo, the executive director of the National Center for Assisted Living, said the failings identified by USA TODAY pose a challenge for all types of long-term care, not just his industry. "The profession is dedicated to ... making sure all residents are properly cared for,

LTC: (2004) The second annual Index of Long-Term Care Uninsured indicates that more than eight out of every ten Americans over the age of 45 (85 percent) are uninsured against the rising costs of long-term care services. These individuals do not have either public or private long-term care insurance coverage, creating a grave concern for our nation as these baby boomers and older Americans prepare for and enter into retirement. The number of Americans over age 45 who are uninsured remains unchanged since the first report released a year ago.

LTC: This is really indicative of how much problems LTC companies are having in pricing their products. I just got notice that Metlife is reducing commissions from 2 years forward. That is usually anathema to agent production but I bet that all companies will do the same- if they have not already.

Companies have simply found that charging $2,500 a year for consumers doesn't come close to paying out $100,000 a year 20 years later.

LTC: A 2004 survey sampled perceptions of two adult groups--elder adults age 56 to 80 with at least one living child and adults age 35 to 55 with at least one living parent. The elder adults largely expect to pay for any LTC needs by themselves. By contrast, the younger adults largely believe health insurance and Medicare will help their parents cover LTC costs.

Variability in end of life care (BMJ USA) Wennberg and colleagues document significant variability in care delivered by US academic health centers to Medicare patients during the last six months of their lives.

there is other solid evidence that the care of the seriously ill and dying needs improvement in US hospitals. Multiple studies have demonstrated high levels of pain, other symptom distress, poor doctor-patient communication about the goals of care and the medical decision making that should follow, and burdens on family care-givers.

LONG-TERM CARE NEEDED - (2004) The second annual Index of Long-Term Care Uninsureds indicates that 85% of Americans over 45 are uninsured against the rising costs of long-term care services. These individuals do not have either public or private long-term care insurance coverage, creating a grave concern for our nation as baby boomers and older Americans prepare for and enter into retirement.

"Financing Long-Term Care for the Elderly," April 2004 "Currently, elderly people finance LTC services from a variety of sources including private resources-personal savings, care donated by friends and family, and LTC insurance -and with assistance from public programs such as Medicaid and Medicare. Incentives inherent in that financing structure have led to increased reliance on-and spending by-those public programs and may have discouraged seniors and younger Americans from purchasing LTC insurance to pay for their care." (p. ix)

"In 2004, out-of-pocket spending (excluding donated care) is expected to account for about one-third of total estimated LTC expenditures."

"In 2004, spending from private LTC insurance, which is a relatively new insurance product, is expected to account for about $6 billion, or 4 percent, of total LTC expenditures."

"Underlying the set of decisions a person makes in preparing financially for future long-term care needs is the availability of publicly funded programs for long-term care, primarily Medicare and Medicaid. In 2004, the portion of total LTC expenditures attributable to those two programs together is likely to reach nearly 60 percent. Medicare does not cover long-term care per se but has become a de facto LTC financier through its coverage of care in skilled nursing facilities (following hospitalization) and its home health care benefit. Medicaid is the dominant public insurance program for long-term care. Not only does it cover the care of people with very low income, but its eligibility rules permit middle-income people-even seniors whose income in retirement leaves them fairly comfortable-to qualify for coverage by exhausting, or 'spending down,' their income and assets. Thus, people who fail to make their own preparations for long-term care needs can eventually qualify for Medicaid if they become impaired."

"Future demographic changes are likely to result in increased demand for long-term care, placing growing fiscal pressure on the public programs that pay for much of it today. Those changes may also indirectly affect informal care by reducing the number of people who might provide LTC services. In addition, the current financing structure creates incentives that discourage people from preparing to finance their own care, encouraging them to rely instead on public LTC insurance." (p. xi)

"The availability of Medicaid benefits for long-term care skews people's decisions about purchasing private coverage. Many people who believe that they could meet the financial qualifications for Medicaid may view it as a substitute for private insurance. The public coverage that Medicaid provides is not a perfect substitute; for example, it does not protect a person's wealth (people are generally obliged to exhaust their own resources before becoming eligible for coverage) and may not be able to provide the same quality of care and array of choices that would be available to someone with private LTC insurance. But many people may prefer to accept those drawbacks rather than pay premiums for private insurance. (p. xi)

"Medicaid's free coverage may also deter people from purchasing private insurance even if they do want to protect their assets or secure higher-quality care than they could receive through Medicaid. Medicaid is a means-tested program; people who set aside savings or obtain private insurance cannot qualify for benefits for as long as their private resources last. The more people save or the more insurance they purchase, the less likely they are ever to qualify for Medicaid benefits. Thus, people who buy insurance pay more than just the premiums; they also give up the value of future Medicaid benefits for which they might have been eligible."

LTC: (2004) According to the Society of Actuaries LTC Experience Study, the average issue age for group LTC insurance is 49. While that is an average, not a mean, the number still suggests that baby boomers—born between 1946 and 1964—are a big part of the group LTC insurance segment evaluated in the study. By comparison, the average issue age for individual LTC insurance is 68.

GAO assisted living report (pdf 44 pages 2004). Extensive professional study. identifies several consumer protection practices in Florida, Texas, Washington, Georgia and Massachusetts as examples which other states may wish to consider. Regulations on the assisted living facilities, which serve as an interim between complete independent living at home and nursing home care, vary from state to state.

The GAO report also found that consumers looking for an assisted living home often do not have the key information they need to identify the best facility to meet their needs.

And another big player bites the dust: Transamerica Occidental announced its intent to exit the Long Term Care Insurance Market effective January 1, 2005. Citing the need to concentrate on their core Life and Annuity business, Transamerica will continue business as usual through the end of this year.

It is not the need to "concentrate". The business was too competitive, the underwriting very difficult and they weren't making money. Same with CNA, Travellers, etc. As stated in my work, there are going to be a lot of players that will get out of the business- most will sell their block to others. You absolutely need to buy a heavy hitter that has the financial backing to continue to cover the policies, no matter the situation.

LTC: (2004) Adult children may think they know their parents wishes for long-term medical care, but they overestimate their parents' planning. At the same time, older adults seem to think they have the proper health coverage plans in place, but are confused as to what their insurance policies actually cover. These disconnects regarding insurance can put unexpected and undue financial burdens on both generations, a new survey reveals.

The "Aging in America: Planning for Long-Term Care" survey reveals that although families think they are talking about everything, they are not discussing important financial issues that affect both generations. The survey found that 42 percent of adult Americans believe their parents have long-term care (LTC) insurance, while only 31 percent of senior Americans polled said that they currently have a long-term care insurance policy. Alarmingly, even those numbers are deceiving, considering that less than 10 percent of senior Americans actually have LTC insurance.

43 percent of younger adults (aged 35-55) indicated they discuss everything with their parents and 54 percent of older adults (aged 56-80) believe they talk about everything with their children. Yet 21 percent of younger adults indicated they do not know the status of their parents' LTC plans and 42 percent assume their parents do have some sort of long-term care plan in place.

LTC COMMUNICATION GAP - Adult children may think they know their parents' wishes for long-term medical care, but they overestimate their parents' planning. At the same time, older adults seem to think they have the proper health coverage plans in place, but are confused as to what their insurance policies actually cover. These disconnects regarding insurance can put unexpected and undue financial burdens on both generations, a new Bankers Life and Casualty survey reveals. Here are the facts: Nursing home costs have been conservatively estimated at $52,000 annually by the American Council of Life Insurance. Approximately 40 percent of adults over the age of 65 will need this care within their lifetime. Yet, when Medicare won't cover these costs, many seniors are faced with paying down their lifetime savings or turning to family for assistance.

Assisted Living Communities Checklist

LTC: 63% of nursing home stays are six months or less. 74% of nursing home stays were less than one year.

LTC: (LTCC) A healthy 51 year old females would need 624 days of assisted living or nursing home care. In addition she would need 2,107 hours of informal care and 454 hours or formal care prior to entering a nursing home. This is a ratio of 4.6 hours of informal care for every hour of formal care.

LTC: (The Realist's Guide to Medicaid and Long-Term Care) America spent $36.1 billion on home care in 2002 of which Medicare and Medicaid paid 55.4% and private insurance paid 18.6%; only 18.0% of home health care costs were paid privately "out of pocket." Assisted living facilities, which cost an average of $28,548 per year, are 90% private pay. And nursing homes, which cost Americans $103.2 billion in 2002, were paid approximately half by Medicaid, one-quarter by private pay, one-eighth by Medicare, and one-sixteenth by private health insurance.

although Medicaid pays only half the dollars for nursing home care, it covers two-thirds of all nursing home residents, and affects almost 80% of all patient days.

Because Medicaid patients have to contribute their income toward their cost of care, the percentage of nursing home costs paid out of pocket as reported by CMS—as low as it is at 25% which is down from 38.5% 15 years ago—is really much less significant than it appears. Over half of the so-called out-of-pocket costs are really just spend-through of Social Security income. That is to say, what is usually assumed to be spenddown of life savings is mostly just the income from another government program that must be contributed toward the cost of care by Medicaid recipients.

Long term care is now about $55,000 a year. Assisted living averages about $29,000. About 79% of people ages 60 to 64 would pass LTC underwriting.

Eldercare bookstore: access to over 250 popular and hard-to-find books on the range of caregiving topics.

A Skilled Nursing Facility is a nursing home where patients can get round-the-clock medical and nursing care. Medicare may pay for this care if all the following conditions:

" He has Medicare Part A;

" He has been hospitalized for at least three days in the past 30 days;

" His doctor determines that he needs skilled nursing care seven days a week or skilled therapy services at least five days a week;

" He requires skilled care for a medical condition that was treated during the hospital stay (or for a condition that occurred while he was receiving skilled nursing care, for instance, if he broke his hip while receiving skilled care for a stroke);

" He receives services in a Medicare-certified SNF.

Inpatient rehab hospital: Generally, patients must require frequent involvement from a doctor as well as 24-hour rehabilitative nursing care for Medicare to cover their stay in an inpatient rehab hospital. In addition, they must require care from several types of medical professionals and be able to tolerate three hours of therapy a day.

LTC: (LTCC 2004) A healthy 51 year old females would need 624 days of assisted living or nursing home care. In addition she would need 2,107 hours of informal care and 454 hours or formal care prior to entering a nursing home. This is a ratio of 4.6 hours of informal care for every hour of formal care.

LTC (MetLife Market Survey of Nursing Home and Home Care Costs 2004 pdf) The average daily cost of a private room in a nursing home in the United States is $70,080 per year, or $192 per day, according to the 2004 MetLife Market Survey of Nursing Home and Home Care Costs. The highest rates were reported in the state of Alaska where the cost is $204,765 per year ($561/day on average). The lowest rates were found in Shreveport, Louisiana at $36,135 per year ($99/day). The average length of stay in a nursing home for current residents is 2.4 years, which makes the average cost of a nursing home stay approximately $168,192.

• The average daily rate for a private room in a nursing home is $192 or $70,080 annually.

• The average daily rate for a semiprivate room in a nursing home is $169 or $61,685 annually.

• The average hourly rate for Home Health Aides (HHAs)provided by a home care agency is $18 per hour.

Home Health Care

Over 1.3 million patients received home health care services from 7,200 agencies in 2000,with over half receiving help with at least one activity of daily living.Seven in ten patients were ages 65 and older,and of all patients receiving care,65%were women.

Home Health Caides provide assistance with personal care functions,such as bathing and dressing,and may also offer companion care.

Based on the market survey for 2003,the average daily rate for a private room in a nursing home was $181 ($66,065 annually),and for a semiprivate room $158 ($57,670 annually).

The 2004 daily rate for a private room in a nursing home is $192 ($70,080 annually),and for a semi- private room $169 ($61,685 annually).

The hourly rate in 2003 for a Home Health Aide was $18.The 2004 hourly rate is $18.

LTC: (2004) MetLife’s Long-Term Care IQ Test, a national poll testing Americans’ knowledge about long-term care insurance (LTCI) and long-term care related issues, reveals that most Americans lack a basic understanding of long-term care. Only about one in three (37%) Americans between the ages of 40 and 70 have the information they need to help them make decisions about their long-term care needs. Only 2% of individuals who took the test received a grade of “B” or better; 7% received a “C” grade on the test; 28% barely passed the test with a “D;” and 63% received an “F,” a failing grade.

According to the survey findings, 55% of individuals between the ages of 40 and 70 incorrectly associate long-term care exclusively with nursing homes. Only one in five (18%) respondents correctly identify their home as the most likely place where long-term care services are provided. A study by the National Alliance of Caregiving and AARP indicates that more than half (55%) of long-term care recipients live in their own home.

The cost of long-term care services is also one of the areas where Americans have the greatest gaps in their knowledge. According to the survey’s findings:

Only 27% of respondents correctly identified the average annual cost of receiving long-term care in a nursing home.

41% mistakenly believe that they are entitled to basic coverage for long-term care in addition to health insurance from the government at retirement.

63% did not correctly estimate the cost of waiting to buy LTCI until an older age.

Most Americans don’t understand how long they will live, or how likely it is that they will need long-term care. Fewer than four in ten (39%) respondents recognize that a 65-year old has a 50% likelihood of living another 18 years, and 72% did not know how likely it is that an 85-year old will need help with his or her daily living activities.

Additionally, 41% of respondents believe long-term care is an entitlement that all Americans are eligible for when they reach retirement age. This same proportion also cites Medicare, Medicare Supplement (Medigap) or disability insurance as forms of insurance that pay for this care. However, generally, Medicare doesn’t pay for long-term care and neither do Medigap or disability insurance.

“Many baby boomers have misconceptions about long-term care and often do not realize that the need for care can happen at any age, and that Medicare does not cover the costs. “As more and more boomers find themselves caring for their aging parents, they often become more aware of the emotional, physical and financial issues that result when a loved one becomes ill and needs help with day-to-day activities. This experience can serve as a wake-up call, helping them see the need to put their own plans in place.”

Assisted Living: The 2004 MetLife Market Survey of Assisted Living Costs shows spending at an average of $2,524 per month or $30,288 per year, up from 2003, when the averages were $2,379 per month and $28,548 per year. Regionally, the highest average monthly costs came in at $4,327 in Stamford, Conn., and the lowest came in at $1,340 in Miami, Fla.

Here are the monthly costs for various regions in the 50 states and the District of Columbia:

Statewide, AK $3,757

Birmingham, AL $2,441

Montgomery, AL $2,073

Little Rock, AR $2,011

Phoenix, AZ $1,498

Tucson, AZ $2,057

Los Angeles, CA $2,011

San Diego, CA $2,103

San Francisco, CA $2,630

Denver, CO $2,056

Colorado Springs, CO $1,779

Hartford, CT $3,146

Stamford, CT $4,327

Washington, DC $3,920

Wilmington, DE $3,782

Jacksonville, FL $1,788

Orlando, FL $2,000

Miami, FL $1,340

Alpharetta, GA $2,638

Atlanta, GA $2,535

Honolulu, HI $3,112

Des Moines, IA $2,139

Boise, ID $2,317

Highland Park, IL $3,542

Chicago, IL $2,572

Peoria, IL $2,008

Fort Wayne, IN $2,638

Indianapolis, IN $2,047

Wichita, KS $2,347

Louisville, KY $2,438

Lexington, KY $2,372

New Orleans, LA $2,418

Shreveport, LA $1,907

Worcester, MA $3,110

Boston, MA $3,424

Silver Spring, MD $3,718

Baltimore, MD $3,136

Brunswick, ME $3,144

Detroit, MI $2,398

Grand Rapids, MI $2,254

Minneapolis/St. Paul, MN $2,651

Rochester, MN $2,425

St. Louis, MO $2,401

Kansas City, MO $2,022

Jackson, MS $2,121

Billings, MT $2,339

Raleigh/Durham, NC $2,735

Charlotte, NC $3,256

Fargo, ND $1,516

Omaha, NE $2,746

Manchester, NH $3,204

Cherry Hill, NJ $3,156

Bridgewater, NJ $3,263

Albuquerque, NM $2,327

Las Vegas, NV $2,247

New York, NY $3,098

Syracuse, NY $2,365

Rochester, NY $2,420

Columbus, OH $2,953

Cleveland, OH $2,915

Cincinnati, OH $2,379

Oklahoma City, OK $2,039

Tulsa, OK $2,507

Portland, OR $2,478

Eugene, OR $2,277

Pittsburgh, PA $1,789

Scranton, PA $1,866

Philadelphia, PA $2,709

Providence, RI $2,224

Columbia, SC $1,898

Charleston, SC $2,322

Rapid City, SD $2,055

Nashville, TN $2,373

Memphis, TN $2,166

Dallas/Fort Worth, TX $2,361

Houston, TX $2,620

Austin, TX $2,750

Salt Lake City, UT $2,046

Arlington, VA $3,345

Richmond, VA $2,432

Burlington, VT $2,341

Seattle, WA $2,762

Spokane, WA $2,389

Milwaukee, WI $2,798

Madison, WI $2,684

Statewide, WV $2,276

Statewide, WY $2,006

Average $2,524

Services included in the base price of an assisted living facility are usually limited to two to three meals per day, assistance with Activities of Daily Living, social activities, medication management, laundry and housekeeping. Additional fees may be charged for services such as an increase in frequency and time for personal care, laundry needs over and above the basic service, meals delivered to the living quarters and dementia care.

There are more than 36,000 assisted living facilities in the U.S. containing more than 910,000 units, according to the National Academy for State Health Policy. The National Center for Assisted Living reports that roughly one million Americans live in these facilities; the typical resident is an 83-year-old woman requiring assistance with 1.7 Activities of Daily Living.

LTC: (2005) Most of the men and women in a Met Life survey believe they are prepared to live alone if their spouses die, and 83% of the men say their wives would be prepared to live alone.

But only 67% of the women surveyed said they thought their husbands were prepared to live alone.

Only 7% of the men thought they were unprepared to manage their own health care, and only 11% of the men thought they were unprepared to maintain activities outside the home. About 14% of the men said they were unprepared to handle cooking.

But 25% of the women thought their husbands were unprepared to manage their health care, 24% were worried about their husbands' ability to stay active outside the home, and 27% were worried about their husbands' ability to cook.

Other study findings:

- 21% of the survey participants believed, incorrectly, that they could pay for long term care with Medicare.

- 7% of the men and 9% of the women believed that they could pay for long term care with ordinary health insurance.

Skilled Nursing Facilities --Protection Against Unfair Transfer or Discharge (2005)

Skilled nursing facilities (also known as rehab facilities and rehab hospitals) sometimes discharge senior patients before they have recovered enough to be sent home. Often, it's a matter of economics ... Medicare provides only a fixed amount of money to pay for a patient's medical condition. Just like hospitals, if the skilled nursing facility can discharge a patient before it spends the entire pot of money, it keeps the difference. But, just like hospitals, federal law protects recovering patients from being discharged too soon. But sometimes hospitals and skilled nursing facilities need to be reminded of this fact.

With regard to skilled nursing and other rehab facilities, the following information was taken directly from Medicare's latest consumer booklet on skilled nursing facilities. The rights described apply to ALL Medicare beneficiaries, regardless of whether they participate in Medicare's original plan, or under an HMO licensed to provide coverage to Medicare beneficiaries.

"At a minimum, Federal law specifies that a SNF (Skilled Nursing Facility) resident’s rights include:

Protection Against Unfair Transfer or Discharge:

You cannot be sent to another SNF, or made to leave the SNF unless:

• It is necessary for the welfare, health, or safety of you or others,

• Your health has declined to the point that the SNF cannot meet your care needs,

• Your health has improved to the point that SNF care is no longer necessary,

• You do not pay for the services you are responsible for, or

• The SNF closes.

Except in emergencies, SNFs must give a 30-day written notice of their plan to discharge or transfer you.

If you have a problem at the SNF (Skilled Nursing Facility), talk to the staff involved. For example, if you have a problem with your care, talk to the nurse or Certified Nurse Assistant (CNA). The staff may not know there is a problem unless you tell them. If the problem is not resolved, ask to talk with the supervisor, the social worker, the Director of Nursing, or your doctor.

The facility must have a grievance procedure for complaints. If your problem is not resolved, follow the facility's grievance procedure. You may also want to bring the problem to the resident or family council. The SNF must post the name, address, and telephone number of state advocacy groups, such as the State Survey and Certification Agency, the State Licensure Office, the State Ombudsman Program, the Protection and Advocacy Network, and the Medicaid Fraud Control Unit.

Understanding Long-Term Care Insurance Medicare interactive

Claims: (HealthPro) There has been a 415 percent increase in the average severity of long-term care professional and liability claims since 1996.

LTC: Medicare can pay for some nursing home care for recovering patients. This is called skilled nursing care. It typically lasts an average of just 23 days while patients recuperate to the point where they can be sent home to complete their recovery. As long as they continue to be eligible, Medicare will pay 100% of their eligible expenses for the first 20 days, and all except $114 a day (2005 amount) for up to 80 more days. After they have recovered sufficiently, Medicare's benefits stop even though the patient may remain in the nursing home as a permanent long-term resident.

On the other hand, Medicaid (MediCal in California) pays about half of all nursing home expenses. But, relying on Medicaid reduces a senior's options to just one ... a Medicaid nursing home with at least one roommate (no privacy). If local homes are full, the senior must go wherever a bed is available, even if it is hours away from family and friends. While no one really knows how this affects people with advanced Alzheimer's or senility, it can be devastating for a frail elderly person who is still mentally alert.

9 out of 10 nursing homes that accept private-pay patients also participate in the Medicaid program. If your loved one is not on Medicaid when they move into one of these homes, they cannot be discharged later if they run out of money and have to go on Medicaid. But, the nursing home can move them, without anyone's permission, into a lower-cost room, including a ward-type room with several roommates, or into a special Medicaid section of the facility.

LIFE: The average age of a person in assisted living is 85.

Finding the Funds for Nursing Home Care (2005)

Step 1 -- Estimate Continuing Expenses

Household Expenses

Current Monthly Expenses

Mortgage / Rent $ ___________

Second Mortgage / Home Equity Loan ___________

Homeowners / Condo Association Dues ___________

Real Estate Taxes (if not included in mortgage payment) ___________

Homeowners / Renters Insurance ___________

Household Supplies ___________

Cleaning / Maid Service ___________

Yard Care / Pest Control ___________

Home Maintenance / Repairs ___________

Utilities

Electricity ___________

Gas / Heating ___________

Water ___________

Sewer ___________

Garbage / Trash ___________

Water Softener / Bottled Water ___________

Telephone - Home and Cellular ___________ #

Cable / Satellite TV ___________

Groceries / Meals

Food - Home ___________

Food - Work ___________

Meals Out ___________

Transportation

Car Loan / Lease Payments ___________

Gasoline ___________

Car Repairs / Maintenance / Oil Changes ___________

Car Wash ___________

Auto Insurance ___________

License / Stickers ___________

Parking / Tolls ___________

Public Transportation / Cabs ___________

Insurance Premiums - Other

Life / Accidental Death Insurance ___________ #

Disability Insurance ___________

Health / Medical / Dental / HMO, including Medicare ___________ #

Medicare Supplement Insurance __________ #

Long-Term Care / Home Health Care ___________

Other ___________

Medical Expenses NOT covered by insurance

Doctors / Dentists / Eye Care ________ #

Hospitals / Lab Tests ___________ #

Prescriptions and Other Medications ___________ #

Other (including Medical Equipment) ___________ #

Personal Care

Clothing / Shoes ___________ #

Laundry / Dry Cleaning ___________ #

Beauty Shop / Hair Cuts / Hair Care ___________ #

Toiletries / Cosmetics ___________ #

Other ___________ #

Taxes - Other

Income - Federal / State / Local ___________ #

Social Security / Medicare ___________ #

Gifts / Donations

Church / Synagog / Charities ___________ #

Gifts, including Christmas / Hanukkah / Birthdays ___________ #

Other ___________ #

Miscellaneous

Entertainment, except Meals Out ___________

Vacations ___________

Cigarettes / Cigars / Other Tobacco ___________

Education ___________

Hobbies / Crafts ___________ #

Legal / Tax Services ___________ #

Membership Dues / Fees ___________ #

Newspapers / Magazines / Books ___________ #

Pet Food / Care ___________ #

Savings / Investments ___________

Other (Postage, fees for Checking Accounts, ATMs, etc.) ___________ #

Total Current Monthly Expenses $ ___________

Total Continuing Monthly Expenses $ ___________ #

Step 2 -- Calculate Total Available for Nursing Home

Total Current Monthly INCOME $ ___________

PLUS Monthly Benefits from Long-Term Care Insurance + ___________

MINUS Continuing Monthly Expenses - ___________ #

Total Amount Available for Nursing Home Care $ ___________

Step 3 -- Add Income from Assets converted into Income

Converted Asset #1: ______________________________ $ ___________

Converted Asset #2: ______________________________ + ___________

Converted Asset #3: ______________________________ + ___________

Converted Asset #4: ______________________________ + ___________

REVISED Amount Available for Nursing Home Care $ ___________

# These expenses are most likely to continue after moving into a nursing home, but may be somewhat lower than current amounts.

Cancer now #1: (2005) 476,009 Americans under 85 died of cancer compared with 450,637 who died of heart disease.

Geriatric Medicine: Long term care

LTC Care: The LTCI business slowly has learned that people prefer care at home. Insurance companies expect to pay most claims in assisted living facilities, which are the half-way places. If the policyholder can't be left alone and needs care, he can't stay in his home unless he has 24-hour-a-day care, which is the most expensive kind of care. There is no need, however, for someone to go to a nursing home simply because he needs a little help getting dressed in the morning, and bathing, and needs someone to dole out his prescription medication. An assisted living facility even can be an apartment.

LTC Companies: "We are now basically down to 13 companies really concentrating in LTCI,. At the height, there were 140 companies in the market. There still are 80 or 90 companies selling LTCI, but 13 companies have written 80% of all the individual policies sold.

There were several well known names that recently left the business- Transamerica, CNA and, most notably to me, TIAA-CREF. They were selling directly to the public. Frankly it is nigh on to impossible for a consumer to understand all the implications of these policies- and then the differences to other policies. Insurance is SOLD, not BOUGHT and I think they just couldn't make a real dent in the field to be profitable.

LTC age: (2005) The LTCI buyer's average age is between 57 and 63, much lower than it was 10 years ago. However that has a lot to do with company employee offerings. They get much younger people to apply since it comes as part of the cafeteria offerings.

LTC types of policies: (2005) There are three kinds of LTCI policies:

1. Expense reimbursement: The policyholder has home health care, nursing home care, or is in an assisted living facility, and whatever it costs up to the limit in the policy is reimbursed by the insurance company.

2. Daily indemnity: The policyholder buys a specific benefit amount per day, and each day he receives a service, he receives the full daily amount. Even if the service costs him only $50 a day, with a $100 a day policy, he'll receive $100. The advantage to this is that if he needs help bathing and dressing, he probably needs someone to drive him to the store and help doing other things at home. The additional money available can help pay for this.

3. Cash benefit: This policy operates like a disability income policy. It basically states that if the policyholder is unable to perform two activities of daily living or has a cognitive impairment, the company will write him a check for his monthly amount and he can hire whomever he wants. These are not commonly sold policies, and they cost more, but they are available.LTC Care: The LTCI business slowly has learned that people prefer care at home. Insurance companies expect to pay most claims in assisted living facilities, which are the half-way places. If the policyholder can't be left alone and needs care, he can't stay in his home unless he has 24-hour-a-day care, which is the most expensive kind of care. There is no need, however, for someone to go to a nursing home simply because he needs a little help getting dressed in the morning, and bathing, and needs someone to dole out his prescription medication. An assisted living facility even can be an apartment.

LTC Companies: "We are now basically down to 13 companies really concentrating in LTCI,. At the height, there were 140 companies in the market. There still are 80 or 90 companies selling LTCI, but 13 companies have written 80% of all the individual policies sold.

LTC types of policies: (2005) There are three kinds of LTCI policies:

Elderly: (NY Times 2005) Census figures show that 6.5 million older Americans need daily assistance and that the number of Americans 85 and older is expected to quadruple in 45 years.

Independent-living communities offered basic services like housekeeping, meals in dining rooms, social activities, transportation and security. Assisted-living communities went further, providing help with daily activities like bathing, dressing and getting around, along with 24-hour oversight. Once the medical needs of residents reached a certain point, they would have to move to a nursing home. Continuing-care communities cover the spectrum at one site - from independent-living to nursing home services.

In the past, residents of a continuing-care community had one long-term contract, requiring a sizable entry fee and monthly maintenance payments. But in recent years, wide ranges of arrangements have evolved. There are more types of housing as well as new ways to pay for it, including some plans in which nearly all the down payment is returned upon departure.

When examining the options, consumers should first consider the services they need - both now and in the future - and how much they can spend

Costs vary greatly, depending on the facility, the services and the region. Classic Residence by Hyatt, for example, operates 17 facilities in the United States. At its independent-living sites, the monthly fee for a studio apartment in Reno, Nev., starts at $1,900, while a one-bedroom in Teaneck, N.J., starts at $3,800. For its continuing-care communities, the entrance fee in Lantana, Fla., starts at $103,400 for a one-bedroom, one-bath apartment, with an additional $1,733 monthly fee, while in Palo Alto, Calif., units start at $569,400 for a one-bedroom, one-bath unit with an additional monthly fee of $3,105. The entrance fee there can go up to $4.2 million, and a monthly fee of $7,430, for a three-bedroom, three-and-a-half-bath unit with a den.

Specialists on housing for the elderly say that assisted-living facilities do not always make clear the rules for discharging a resident. In addition, some states do not regulate assisted-living facilities.

Comments from a LTC aide: (2005)the community, through the state, including their representatives, have studiously avoided direct legal responsibility, and liability for the nursing homes, by developing responsibility to others, and creating an onerous legal structure of responsibility, including financing, in others, which, of course is naturally under funded; plus corrupt politicians take bribes from the relevant corporations to grant favorable legislation; and when the inevitable problems arise, the community reacts with predictable hypocritical outrage at the behavior of the aides, etc., enforces criminal sanctions against them, while the community completely ignores the morality of their own participation in the system they created ... the community, assiduously works to avoid all legal/criminal responsibility for their own participation in the creation of the abuse, as accessories before the fact ... in fact, perhaps the community is more responsible, for the abuse outcome, since they created the system.

principals are responsible for the criminal behavior of their agents, when the principals, micro manage the system

look at the aides hourly wage, $6.65 per hour ... not many senators, representatives, fortune 500 ceos, doctors, or lawyers are willing to work those wages

Long Term Care: According to the New York State attorney, 25 % of nursing home aids prosecuted for abusing residents had a prior criminal record. A 1994 survey indicated that approximately 5 % of the nurses aids on file with state regulators had a criminal record involving violence and/or theft.

LTC: (2005) A.M. Best estimates the top 10 companies to represent nearly 80% of the total business. This has placed added pressure on the smaller carriers to compete within this industry. Additionally, new entrants into the market are larger and financially stronger, allowing them to commit resources to the product and to invest in the most state-of-the-art monitoring tools.

A.M. Best has seen some industry consolidation through a limited number of acquisitions and mergers, and others have left the long-term care product line. Among the most notable was the merger of John Hancock into Manulife, creating the second largest life insurer in North America and producing scale and efficiency. Genworth Financial, the spinoff of General Electric, remains the largest writer of long-term care insurance. A.M. Best believes that the long-term care market will continue to consolidate due to the amount of individual long-term care blocks up for sale. However, A.M. Best believes this will not happen until acquirers feel comfortable with the earlier generation of products that were written by carriers now looking to exit the business. The older in-force blocks were not subject to today's more conservative pricing and stricter underwriting standards, which, in many cases, resulted in underpriced business, some of which needed additional rating action and/or reserve strengthening. This has led most active carriers to choose organic growth instead of through acquisition. Once confidence and experience builds in the older blocks of business, A.M. Best expects consolidation activity to increase, resulting in fewer, primarily larger, financially strong players dominating the market, but this still may be a few years away from becoming a reality.

Average Length of Service Provided to U.S. Home Health-Care Patients, by Selected Period --- United States, 1991--2000 Very Important statistics

Long Term Care Insurance: The essentials from Met Life (2005)

LTC: (Genworth Financial's 2005 Cost of Care Survey ) The average annual cost of a private room in a nursing home rose 6% from the 2004 study to $69,400. Assisted living costs rose 5% to an annual average cost of $30,300 and home health care costs rose only marginally. Nursing home costs in urban areas continue to be considerably more expensive than in non-urban areas.

Medicare LTC: Medicare home health coverage includes skilled services, such as the nursing care, along with a limited number of hours per week of personal care provided by home health aides, such as help with bathing, toileting and dressing.

As a rule, Medicare’s home health care benefit does not cover the following:

* 24-hour-a-day care at home;

* Most prescription drugs;

* Meals delivered to home;

* Home maker or custodial care services, such as cooking, shopping, and laundry;

* Personal care unless, as in your husband’s case, he also needs skilled nursing or therapy care.

LTC: Shreveport, Louisiana, is the least expensive city in the US for long-term care services. A private room in a nursing home costs $99 per day on average in that city, while home health-care aide rates are $13/hour, on average. Rounding out the top five least expensive are New Orleans, Kansas City, St. Louis, and Little Rock, Arkansas. The national private pay average cost of a nursing home in the US is $192 per day or $70,080 annually while the average nursing home stay is 2.4 years, according to the National Center for Health Statistics

LTC: (2005) the average cost of a year in a private room of a nursing home was $70,080 in 2003, though prices vary greatly by region: $36,135 in Shreveport, La., for example, but $113,880 in New York City.

study of 137,514 claims on 1.7 million policies by Helwig found that most policyholders eligible for lifetime coverage made claims for only short periods. The findings challenged the picture that many insurers paint of the elderly languishing indefinitely in residential institutions.

The study found that only 3.6 percent of claims filed for nursing home, assisted living and home services were for care that lasted four to five years, and 4.3 percent were for care lasting more than five years. In 76.7 percent of claims, care lasted less than two years.

ABOUT a third of all policyholders, though, had policies that provided benefits for seven years to a lifetime. Policyholders pay a high cost for unneeded benefits: a three-year policy costs 36 percent to 39 percent less than one with lifetime benefits.

QuickStats: Average Number of Bed Days* During the Preceding 12 Months Among Persons Aged >18 Years, by Age Group --- United States, 2003

LTC: (WSJ) "In the future, Medicaid will no longer be a resource for middle- and upper-class people."

Part of the proposed Government cuts to Medicaid could come from tightening loopholes that let some older people qualify for aid by sheltering their assets. Patients generally are eligible for Medicaid to help pay for long-term care after using up all but $2,000 of their cash and investments. They also get to keep their house and car. So, instead of spending the next generation's inheritance on long-term care, some parents transfer assets -- including, in some cases, their house -- to their kids before entering a nursing home There are restrictions on the amount of time that must elapse between the asset transfer and Medicaid eligibility, but these are rather weak.

Under the proposals, however, state regulators would tighten these restrictions, counting as belonging to the patient any assets given away within five years of his applying for Medicaid. Such a change could save the government $1.5 billion over five years, according to the HHS commission report.

The proposed change could make it even tougher for older parents to leave their assets intact for their boomer children, while at the same time getting government help with long-term-care costs. Last year, the cost per patient for long-term care averaged $72,240, including nursing homes, assisted-living facilities and home care

Under the partnership program, a person buys a private long-term-care policy that has been approved by state officials. If the person later enters long-term care and exhausts the private policy's coverage, he can still apply for Medicaid to help cover any additional costs. The benefit from the partnership program is that it sets a higher floor for how much the patient can keep as personal assets and still be eligible for Medicaid. That floor is equal to the amount of coverage the patient purchased in their private policy. For example, a policy worth $50,000, when used up, would allow that patient to retain $50,000 in personal assets, plus his house and car, and still qualify for Medicaid coverage.

The partnership program won't solve the larger problem of how long-term care is financed, with many older people already too poor to buy coverage, or too sick to get it. But for someone who is middle-age or part of the middle class, a long-term-care policy with a government guarantee not to wind up penniless might be worth a look. In the states with these programs, the long-term-care insurance market grew 23% faster from 1993 (when the programs were started) to 2001 than in states without them, says Mark Meiners, a health policy professor at George Mason University in Fairfax, Va., who helped develop the partnership program. So far, of the 180,000 policies purchased since 1992, only 89 have been exhausted, a recent study found.

Unfortunately, the sticker shock can be just as bad with partnership-approved policies as with traditional long-term-care insurance, for which premiums average about $1,000 a year for three to six years of care for a 55-year-old married person. The price goes up as a person ages, and adding extras -- such as inflation protection -- can push the price higher still.

LTC RISES MORE THAN 5% - (2005) The average daily cost of a private room in a nursing home in the United States is $203 per day, or $74,095 annually, up 5.7% when compared with last year's $192, according to the 2005 MetLife Market Survey of Nursing Home & Home Care Costs. The highest rates once again were in Alaska, $531 per day, and the lowest were in the Shreveport area of Louisiana, $115. The study also found that the cost of a home health care aide averaged $19 per hour nationally, up by $1, or 5.5%. The average stay in a nursing home is 2.4 years, for a total average cost of $177,828. There are about 1.3 million people in 17,000 nursing homes in the U.S.

Will LTC providers increase rates over the next five years? 2006

Longevity News:

The Mortality Debate, (Jay Olshansky 2006)

According to Olshansky, using historical data to project future life expectancy is like making weather forecasts by using past trends. Instead, one should look at what factors are currently in play or visible on the horizon.

Olshansky and his colleagues see obesity as an approaching storm. Childhood obesity rates have risen rapidly over the past 30 years — and not just in the United States. The health implications of this increase are not yet very visible. But Olshansky, et al. are concerned that as children enter their 20s, 30s, 40s, and beyond, we could see major increases in obesity-related health problems. Currently, Olshansky, et al. estimate that the negative effect of obesity on life expectancy in the United States is from one-third of a year to a little over a year. In the next five decades, they estimate that the impact of obesity on life expectancy could be 2-5 years or more. The negative effect of obesity is growing at a faster pace than the positive impact of biomedical technology advances.

And Researchers do not know why the United States is lagging. It could be partly due to obesity and/or a failure to provide health care services to a large share of the population.

Living longer- but better?: (USA Today 2006) U.S. life expectancy has hit another all-time high — 77.6 years — and deaths from heart disease, cancer and stroke continue to drop. But half of Americans in the 55-to-64 age group — including the oldest of the baby boomers — have high blood pressure, and two in five are obese. That means they are in worse shape in some respects than Americans born a decade earlier were when they were that age.

The health of this large group of the near-elderly is of major concern to American taxpayers, because they are now becoming eligible for Medicare and Social Security.

When the 1930s group was tested around 1990, 42% had high blood pressure. That compares with 50% for the 1940s group. The older group's rate of obesity was 31% back then, compared with 39% for the 1940s babies now. Because of the advent of cholesterol-lowering drugs, the prevalence of high cholesterol actually went down, from 35% for the 1930s group to 23% among the 1940s babies.

• Infant mortality in 2003 dropped slightly to 6.9 deaths per 1,000 live births. Infant mortality has been on a general decline since 1958.

• Spending on health care rose 7.7% in 2003, to $1.7 trillion. Health expenditures as a percentage of gross domestic product rose to 15.3% in 2003, up from 14.9% in 2002.

• Prescription drugs were the fastest-growing expenditure. Spending on prescriptions rose 11% in 2003.

• Twenty-eight percent of all adults reported recent low back pain. (Most people are a pain in the butt so it goes to reason............)

This is what happened to Long Term Care companies as well (2006)- By 1998, 45 insurance carriers were offering their own versions of index annuities, but by 2002, that number had shrunk to 29, largely because many companies could not make the product work for them. He predicted that 2005 would close out with 50 providers, up from 46 providers in October. “There have been almost as many people in the (index annuity) market as have jumped out. Those that departed include GE Life, American General, ReliaStar and Transamerica Life.

While the index annuity arena has thus far been a niche sector, more of the big insurance players who have historically sold variable annuities have seen the light and in 2005 began offering index annuities, Marrion noted. These include Nationwide Mutual Insurance Company, The Principal Financial Group and Protective Life. Statistically, the average index annuity sale is $45,000; $5,000 more than the average fixed annuity sale. Moreover, the breadth of index annuity products has also increased to 240 products now, up from 100 products available one year ago.

The typical new index annuity has a 12-year surrender period, a floating rate minimum guarantee of between 1.75 percent and two percent on 87.5 percent of the index annuity’s premium, sports a five percent or higher first year premium bonus, offers 10 percent annual withdrawals that are penalty-free and pays agents an average commission of between seven percent and nine percent. Trends are emerging.

Twelve-year surrender periods have in many instances usurped the traditional 10-year periods, but seven-year surrender policies are gaining ground as companies look to offer index annuities with shorter surrender periods, lower commissions (four to five percent) and simpler designs. In addition, firms are experimenting with “soft caps” as a way to provide higher income. Some are structured to pay up to 100 percent index participation up to seven or eight percent, and then pay 25 percent of any additional gains. And regulatory restrictions are driving product designs.

LTC CLAIMS - (2006) Long-term care insurance that provides a benefit for a limited period, such as for three years, is considerably less expensive to purchase than unlimited (lifetime) benefits. According to a study of long-term care claims released by the American Association for Long-Term Care Insurance, that limited protection may be all that most people need. The study examined both open claims and closed claims and found that only 14.4% of closed claims lasted longer than 24 months, with 33.2% of open claims lasting longer than 24 months. Only 5.6% of closed claims lasted longer than 36 months (16.2% for open claims).

Long Term Care: (2006) Only 33% of the claims that were open at the time the study was conducted had been open for longer than 24 months, and only 16% of the open claims had lasted longer than 36 months.

Claim durations were even shorter for closed claims.

Only 14% of the closed claims had lasted longer than 24 months, and only 5.6% of the closed claims had lasted longer than 36 months. An LTC insurance policy that provides lifetime coverage may cost only 35% more than a policy that provides 36 months of coverage

LTC: (2006)A new study says senior citizens currently turning 65 face an average of three years of need for LTC some time before they die, with one in five expected to need five years of care or more. Much of the care will be provided by family members. Though half of today's retirees will incur no out-of-pocket expenses for LTC, 1 percent will need more than $250,000 of their own money set aside and invested at age 65 to pay for their future care.

Projections about facility care show that 35 percent of people age 65 will use nursing home care, with 5 percent of 65-year-olds spending more than five years in nursing facilities.

Government programs will cover 53 percent of these total LTC expenses, but private LTC insurance is projected to cover only 2 percent. Thus, 45 percent of LTC bills will be paid out of pocket.

While on average people would have to invest $21,000 at age 65 to pay their future LTC bills, individuals will experience very different futures: half of 65-year-olds will incur no out-of-pocket costs, yet an investment of $100,000 at age 65 will not be enough to cover all out-of-pocket LTC costs for 6 percent of retirees.

Under the new laws, (2006) Medicaid will treat the spending down of assets through gifts exactly as it did in the past, only now with a larger scope. As was previously the case, when someone applies for government coverage of long-term care, Medicaid takes into account any substantial gifts of assets the applicant has made within five years. If the applicant is eligible for Medicaid in part because of those gifts, before Medicaid will pay any benefits, that person must contribute an amount equal to those gifts, up front, toward their nursing home care. For instance, an elderly client gifted $100,000 to his children in 2002 and then later applies for nursing care coverage under Medicaid in 2006. If the $100,000 reduced his assets enough to qualify him for Medicaid, the new law would require that he pay the first $100,000 of his care, out of pocket, before Medicaid benefits would kick in. For clients already on the Medicaid rolls, or who applied for coverage before Feb. 8, the new laws will have no bearing on their status. However, elderly clients currently using the gifting strategy to attempt to qualify for Medicaid will have to take a hard look at revising their plan.

Another twist included in the new Medicaid legislation concerns the inheritance of annuities. Under the old laws, some annuities were exempt from an estate’s assets and were therefore not subject to recovery by the government when a person applied for Medicaid. Under the new laws, annuities held by the applicant must be modified to name the government as the sole beneficiary when the applicant dies.

Long Term Care: Only half of U.S. nursing homes have separate care units for dementia patients, and only 61% of assisted living facilities provide care for people suffering from Alzheimer’s disease and other forms of dementia.

Nursing homes charge $10 to $25 extra per day for patients in the dementia units. About half of the assisted living facilities that provide dementia care charge extra fees for that service, with the costs ranging from $50 to $3,000 per month.

LTC: (2006) By 2030, the average annual cost of nursing home care is expected to exceed $190,000 per year.

Kaiser Family Foundation: “Private Long- Term Care Insurance: A Viable Option for Low and Middle-Income Seniors?” (2006) examines the experience with private long-term care insurance and the LTC Partnership Programs. It concludes that ‘private long-term care insurance is growing and is likely to play a larger role in financing long-term care in the future. However, even with expanded LTC Partnership programs, these options are not available to those who already have long-term care needs and remain unaffordable to the majority of low to middle-income seniors. As a result, Medicaid, in conjunction with direct out-of-pocket spending, is likely to remain the primary financing source for lengthy nursing home stays.

LONG-TERM CARE COSTS (2006) According to a Genworth Financial survey, the national average cost for a private room in nursing home is now $70,912 a year. For in-home assistance, the national average cost is $22.15 per hour, or $46,072 per year for 40 hours of help per week. At an assumed 5% inflation rate, a year in a nursing home, based on national averages, could cost over $110,008 in 2015 and over $179,191 in 2025 and the cost per year of in-home care, for 40 hours of help per week, would be more than $71,473 in 2015 and almost $116,422 in 2025.

LTC CLAIMANTS LIVING TOO LONG - (2006) Penn Treaty (and maybe other LTC carriers) have a problem...their LTC insureds are living about 3 years too long. In fact, Penn Treaty may have to add $30 million to its long term care insurance claim reserves as a contingency. In other LTC news, the Florida Senate is proposing legislation that would cap permitted increases in LTC premiums and require that current policyholders be given the option of keeping premiums stable by taking a reduced package of benefits.

LTC: (2006) The average cost for a 55-year-old purchasing long-term care insurance is $772-per-year. The average annual cost for a 65-year-old is $1,456 according to the 2006 Long-Term Care Insurance Price Index

LTC

LTC (Genworth 2006) The average annual cost for a private room in a nursing home rose to $70,912, or $194 a day, up just 2% from the 2005 figures

For semiprivate rooms, the annual cost also rose about 2%, to $62,532.

The average annual cost for a private 1-bedroom unit in an assisted living facility rose 7%, to $32,294.

The combined average hourly rate for in-home LTC provided by a home health aide shot up 13%, to $25.32 per hour.

The hourly rate for certified home care providers climbed 17%, to $36.22 per hour.

A private room in a nursing home was most expensive in Alaska – $191,140 per year – and least expensive in Louisiana, at $42,304 per year.

LTC INSURANCE RISKS LINK: AARP Good stuff (2006)

Fewer than 10 million Americans have bought an LTCI policy since those products were first tracked in 1987, and only about 7 million of those policies remain in force today. In 2003, most, if not all, of the 4.2 percent growth in the LTCI market could be attributed to enrollment in the new Federal Long-Term Care Insurance Program.

Yet, even though the federal government conducted a fairly extensive education campaign to encourage participation, only 5 percent of active civilian employees enrolled during its first three years, similar to the trend of low participation rates observed in other group offers of LTCI (GAO 2006). This low take-up rate may reflect a more general difficulty in selling these products.

Comparing one long-term care policy with another is a challenge, even for professionals (Glickman 2004). Consumers will find very little independent and objective help or guidance to assist them during the decision-making process, and nothing that will help them easily compare one policy with another (Friedland and Lewis 2004). Generally, a consumer has only the advice of an agent (who often has a financial interest in making a sale), various marketing materials, and an “Outline of Coverage” (an abbreviated description of the policy) on which to rely for an understanding of their choices.

Combination Products

Consumers can choose a policy that offers LTC benefits combined with a life insurance or annuity policy.

.. A life insurance policy accelerates payment of the death benefit, providing funds to pay for care as specified in the policy. A life policy can also include a rider for LTCI benefits that are similar to those in stand-alone LTCI policies. The benefits of an LTCI rider are typically paid only after the accelerated payment for the death benefit has been exhausted.

.. An annuity can also include a rider for LTCI. The LTCI rider benefits are paid only after the cash value in the annuity has been exhausted.

Both an annuity and an accelerated life insurance death benefit usually provide a very long elimination (waiting) period before the benefits of an LTCI rider are triggered. Some of these products require the payment of a single lifetime premium up front, or a premium paid over a specified number of years, after which no further premiums are required.

LTC: (2006) A Mutual of Omaha survey reveals that about 41% of LTC insurance purchasers say their main motivation for buying coverage is to avoid being a burden on their family. Additionally, 65% of the survey participants had talked about LTC coverage with family members, and 53% said family members were involved in their decisions to buy.

QuickStats: Average Number of Days of Hospital Stay, by Age Group , United States, 1980--2004

During 1980--2004, the average length of a hospital stay declined significantly to 5.4 days for those aged 65--74 years, 5.7 days for those aged 75--84 years, and 5.8 days for those aged >85 years. The average stay for patients aged <65 years was 4.3 days in 2004.

Assisted Living (Met Life 2006) assisted-living centers cost about $35,000 a year in 2005, up roughly a third from 2002, before figuring in health-care expenses. Overall, assisted-living centers are near saturation at 95% occupancy nationwide.

LTC (AARP 2007) While 60 percent of those surveyed claimed to be “somewhat familiar” with the long-term care services currently available, fewer than one in ten (8 percent) could reasonably estimate the actual costs of nursing home care. Most underestimated the cost, with some respondents guessing that such care would cost $500 or $1,000 a month. A single room in a nursing home in the U.S. costs an average $6,258 a month, or $75,000 a year, according to the a recent study.

In addition, 59 percent of those surveyed incorrectly believe Medicare will cover nursing home care beyond three months for age-related or chronic conditions, and 52 percent incorrectly believe Medicare covers assisted living.

Interestingly, almost 30 percent of respondents reported that they have purchased long-term care insurance. In fact, industry experts believe that only about 10 percent of Americans who are 55 and older have private long-term care insurance coverage.

People who said they had a personal experience with a loved one needing long-term care did not know any more about long-term care costs that those who had no experience.

ELDERCARE VERSUS CHILDCARE - (2007) Long-term care advocates say that America's changing demographics could make eldercare a bigger issue for employers and their workers than childcare. LTC Financial Partners says businesses lose about $34 billion each year while employees are off work to care for someone and, "with 77 million baby boomers set to retire, an ever greater percentage of workers will be distracted by elder-care needs."

I never saw this coming- (2007) Almost 58% of long term care claims submitted to UnumProvident Corp. come from people under age 65. That’s true for both group and individual LTC insurance policies.

The company expects to process about 4,000 LTC insurance claims this year, up from 3,000 in 2005.

The top LTC claim triggers for young claimants were cancer and strokes, with cancer accounting for about 30% of claims and strokes accounting for about 10%. Additional leading causes of claims were neurological disease, dementia and multiple sclerosis.

- The average age of under-65 claimants is 53, and more than 15% are younger than 45.

- More than 66% of under-65 claimants receive care at home, while 17% receive nursing home care.

- A typical claim for policyholders in the under-65 age group lasts a year or more.

This really threw me- (2007) The California Public Employees Retirement System has projected a $600 million deficit and is now increasing premiums 33.6% in 2007. CALPERS was considered to have the clout and numbers to engage the best actuaries to keep premiums in line. It is the third largest purchaser of health care in the U.S., It had more claims than expected especially for cognitive impairment . It gives you an idea just how difficult underwriting is. It is indicative of the problems experienced by the entire industry.

Care: The average daily cost of a private room in a nursing home has increased 1.5% 2006, to $206.

That cost, up from $203 in 2005, works out to $75,190 annually.

Daily private room costs range from a high of $578 in Alaska to $111 in Shreveport, La. The lowest costs are in and around Shreveport. The cost of semiprivate rooms rose 3.9%, to $183.

The cost of a home health care aide averaged $19 per hour nationally, unchanged from 2005, while homemaker-companion care was also unchanged at $17 per hour.

The highest cost for a home health care aide was in Rochester, Minn., at $29 per hour. The highest cost for homemaker-companions, in Rochester, Minn., and Charleston, S.C., was $23.

The lowest costs for both home health care aides and homemaker-companions were in Shreveport, at $12 per hour for each.

LTC- (2007) A typical company policy for a 65-year-old buyer might pay benefits of $150 a day for three years — a total of about $164,000 — with payments starting 90 days after a claim is made. With automatic inflation protection to raise the daily benefit 5 percent each year, the annual premium with Hancock for people with a standard health rating would be $1,650 if you buy at age 50, $1,840 if you buy at 55, $2,233 at 60, $2,845 at 65, $4,225 at 70 and $6,560 at 75.

Premiums, which generally rise 8 or 9 percent for each year you wait to apply, also depend on which of three main health-related risk categories — preferred, standard or substandard — you are assigned. The preferred, or good-health, designation typically saves 10 to 20 percent.

The average age of individual buyers is the early 60s; for applicants in their 70s, only one in five qualify for good-health discounts and two-fifths of this age group are denied coverage at any price,

Married people — and in some cases committed partners or even siblings — are entitled to discounts of 15 to 40 percent because they have a presumed care provider living with them, thereby reducing the cost or likelihood of claims.

Last year, 36.5 percent of claims paid by eight top long-term insurers were for nursing home care, 33.9 percent for care in the home and 29.6 percent for assisted-living costs.

Women use long-term care for an average 3.7 years, compared with 2.2 years for men

BENEFITS can be paid under three methods. The main one these days is called reimbursement, with the company paying either you or your provider only when you receive services it deems eligible. The other methods are indemnity, under which the insurer pays a set amount directly to you so long as you obtain some care, and disability, under which you get a full benefit if you are eligible, whether or not you choose to use any services.

LTC: (John Hancock 2007) Many Americans who are caregivers for ailing family or friends frequently have to pay for it by tapping their retirement savings. Some 15% of those polled admitted to using money they had set aside for retirement to help cover care-giving expenses. Not surprisingly, almost half (45%) said that care giving significantly affected their work while nearly seven in 10 (69%) said it had a notable impact on their personal lives, and 62% said that it had a significant impact on their family. Nearly four in 10 (37%) said it "significantly changed" their financial situation

CCRC (Continuing Care Retirement Community 2007) Traditionally, continuing care retirement communities, which offer the prospect of lifetime care on a single campus, have charged hefty entrance fees as well as monthly fees; in some cases, the monthly fees do not increase if residents move to a higher level of care.

But the number and variety of payment plans have expanded rapidly, along with the number of new facilities: some 20 to 30 new communities have been built each year for the past decade, and more than 2,200 are now in operation.

Most of the contracts fall into three categories. Type A’s, or “life care,” contracts, promise to care for residents for the rest of their lives without significantly increasing their monthly fees. Type B, or “modified,” contracts, provide a certain number of free days in assisted living or nursing homes, then charge for additional care. With Type C, or “fee for service” contracts, residents pay more when they need more care.

As recently as 1998, Type A communities were by far the most common type, with 42 percent of the market, according to Zeigler Senior Living Finance, which underwrites such communities. But that has changed with the proliferation of payment models: in 2005, Type A communities accounted for just 29 percent of the total. During the same period, Type B contracts grew to 19 percent, from 16 percent, and Type C contracts, combined with an emerging fee-for-service contract called the “rental model,” grew to 47 percent from 36 percent.

Fee-for-service communities are gaining popularity because their entrance fees are typically fully or partially refundable, and monthly fees tend to be lower because they do not include health care.

As a hedge against future care costs, residents in Type B and C communities sometimes hang on to their long-term care insurance; some communities offer discounts for insured residents. And some life care communities are lowering their costs for residents with long-term care insurance. Depending on their policy, a couple with long-term care insurance could pay just $145,400 to join Kendal at Oberlin, rather than $202,000 without the policy.

In the past, most entrance fees at the communities were what is known as “declining refundable.” Such fees are partially refundable when residents first move in, but become nonrefundable after a certain number of months. Although partially and fully refundable entrance fees are spreading rapidly, some residents still prefer to pay the lower, declining refundable fee and invest their remaining assets on their own.

LTC- As of 2006, about 200,670 LTC Partnership policies were still in force in the 4 states that have established Partnership Programs (California, Connecticut, Indiana and New York). Of these, how many policyholders have exhausted their benefits and received Medicaid? 175

Of course, the statistics did not indicate how many policies have actually been started.

And LTC coverage is affordable by 20% and owned by just 7%-8%.

LTC- (2007) "A review of more than 400 of the thousands of grievances and lawsuits filed in recent years shows elderly policyholders confronting unnecessary delays and overwhelming bureaucracies. In California alone, nearly one in every four long-term-care claims was denied in 2005, according to the state."

Life SEttlements- (2007) In 2005 about $10 billion worth were transacted, according to Sanford C. Bernstein & Co. (AB ), up from virtually nothing in 2001. Industry analysts say this number rose to $15 billion in 2006, and could double this year, to $30 billion. Over the next few decades, as the ranks of retirees swell, Bernstein predicts that the face value of life settlement deals will top $160 billion a year in today's dollars. Death bonds will never approach the size of the mortgage market, which saw $1.9 trillion of securities issued last year. But if Wall Street achieves its goal of turning most of the life settlements created each year into death bonds, the market could rival the size of today's junk-bond market, where issuance totaled $128 billion in 2006, up from $56 billion in 1996, Many life settlement providers, for example, are trying to lure people who don't even hold insurance. In this tail-wagging-the-dog scenario, speculators take out policies on the individuals' behalf, pay them something up front, cover the premiums, and then wait for the people to die so they can collect. At the most outlandish extreme, one outfit devised a plan involving the population of the Federation of St. Kitts and Nevis in the Caribbean.

Investors, meanwhile, have been burned by operators who have misrepresented the profit potential on deals. Two men now awaiting trial in California hatched an allegedly fraudulent scheme aimed at the entire congregation of a black church in South Central Los Angeles. They promised investors 25% annual returns because African Americans die earlier than other racial groups—an ugly pitch that prosecutors say overstated the upside potential.

Even some of the biggest life settlement firms operate under a cloud. Philadelphia's Coventry First, for example, faces civil charges from the New York Attorney General's office and is in danger of being barred from doing business in Florida. It denies any wrongdoing.

The eight-year-old industry certainly has an ignominious history. It grew from the shards of the so-called viaticals business, which imploded in the late 1990s amid allegations of fraudulent dealings with AIDS patients and other terminally ill people. The word viatical comes from viaticum, a religious term for the communion given to a person near death. As AIDS spread during the 1980s, patients turned to the viatical settlements market to unlock insurance money to pay for care. But advances in medicine in the 1990s extended patients' lives, making viaticals less profitable for the buyers. At the same time, the industry was rife with abusive sales practices that drew the attention of prosecutors. By 1999, business had all but dried up.

Surprisingly little has changed in the latest iteration. Only 26 states require professional licensing for life settlement brokers; elsewhere, anyone can hang a shingle. The market is especially popular among former stockbrokers, mortgage brokers, insurance agents, and lawyers. But all sorts of people from small-time movie producers to dentists are setting up shop.

LTC abroad- "Financing Long-Term Care: Lessons from Abroad" by Howard Gleckman

The brief's key findings are:

Many industrial countries have reformed their long-term care systems to broaden coverage and encourage home care over institutional care.

Systems vary in structure: Japan and Germany offer broad social insurance, France targets coverage by income, and the United Kingdom uses a means test.

Financing arrangements range from a payroll tax (Germany and Japan) to general revenues (France) to a mix of federal grants and local taxes (United Kingdom).

One common challenge, however, is keeping costs in check as populations age.

Complete Directory of Continuing Care Retirement Communities, (2007) which lists 2006 data about more than 900 C.C.R.C.’s; electronic copies are available for $10

LTC premiums- (2007) Earlier this year, CALPERS (California Public Employees Retirement System) raised its premiums for its self insured group long term insurance by 33.6%. The increase was needed to avoid a projected $68 million deficit for the program within 60 years.

LTCI Coverage Activity Reported During the Observation Period (2007)

Percentage of Study Exposure Records Individual Employer group

Lapse for nonpayment of premium 1.2% 1.8%

Expiration of benefits + +

Death 0.9 0.2

Conversion 0.1 0.1

Terminated for reasons unknown 1.5 3.5

Remaining in force 96.3 94.4

100% 100%

+ Less than 0.1%-

ltc- ., (2007) only about 8 million LTC policies have been sold in this country.

A 55-year-old individual considering long term care insurance protection can expect to pay $665 a year if married or $1,075 if single

A 65-year-old purchasing comparable coverage would pay $1,292 if married or $1,923 if single.

The American Association for Long Term Care Insurance, Westlake Village, Calif., has published those figures in the 2007 Long Term Care Insurance Price Index.

The costs are about the same as the costs the AALTCI was reporting in 2006.

The annual index measures current costs for top-selling LTC policies that offer the ability to receive care either at home or in a skilled care facility.

In the past year, some carriers introduced new policies that provide lower-cost coverage for younger individuals who are in good health as well as for nonsmokers, individuals who are married or residing with a partner, says Jesse Slome, executive director of the AALTCI.

Consumers can reduce premiums about 9% by paying premiums annually rather than monthly, and 8% by being accepted for coverage before their next birthday, Slome says.

The study compares costs for plans that provide benefits for 3 years.

The study priced plans that

AL	103	CT	202	ID	136	LA	90	MS	100	NJ	192	OR	142	TX	130	WI	166
AK	413	DE	129	IL	133	ME	175	MO	105	MN	144	PA	149	UT	115	WY	100
AZ	137	DC	184	IN	141	MD	151	MT	100	NY	178	RI	155	VT	100	AVG	140
AR	118	FL	120	IA	101	MA	201	NE	142	ND	100	SC	118	VA	115
CA	156	GA	102	KS	110	MI	127	NV	130	OH	151	SD	100	WA	177
CO	117	HI	127	KY	127	MN	133	NH	199	OK	92	TN	126	WV	125

Female	76%
Average Age	83.6
Male	24%
Average Age	81.8
Average number of ADLs	3.1
Cognitively impaired	49%
Hospitalized before moving into an ALF	42%
Average Income	$26,138
Reasons for Discharge
Death	26%
Move to Nursing Home	39%
Move to Relative's house	4%

Company	Age 65 Premium	Age 75 Premium
Lincoln Benefit	$1,575	3,803
CNA	1,823	4,042
GE Capital	1,678	3,866
John Hancock	1,850	4,190
Fortis	1,680	3,190
Travellers	2,400	5,690

Company	Actual Earned Premium	Actual Incurred Claims	Actual Loss Incurred to Premium Earned %	Anticipated Loss Incurred to Premium Earned %	Number of Lives Covered
AIG	116,537	23,000	19.7	21.2	291
Allianz	42,387,732	6,591,953	15.6	21.9	18,448
Bankers	1,564,474,541	519,288,909	33.2	38.7	161,917
Conseco	1,654,889,082	797,278,743	48.2	46.3	265,857
CNA	1,418,046,068	407,089,149	28.7	29.9	236,554
Fortis	237,598,917	59,744,468	25.1	17.4	62,898
GE	1,882,628,731	420,399,034	22.3	20.1	312,785
John Alden	59,286,214	59,286,215	12.0	19.0	12,591
John Hancock	931,236,717	931,236,717	18.3	22.4	242,703
MEDICO	181,431,654	99,253,256	54.7	48.7	9,259
Penn Treaty	226,294,993	94,007,257	41.5	36.7	33,612
PFL	366,489,172	98,786,046	27.0	22.1	69,118
Pioneer	440,036,357	232,288,950	52.8	52.8	29,597
TransAmerica	73,089,622	17,609,455	24.1	12.7	21,814
Travelers	563,990,539	91,683,516	16.3	23.8	105,047
UNUM	391,220,778	196,324,969	50.2	46.1	29,807

TABLE 30C: PERCENTAGE OF NURSING HOME RESIDENTS AGE 65 OR OLDER WHO ARE INCONTINENT AND DEPENDENT IN MOBILITY AND EATING, BY AGE GROUP AND SEX, 1985 AND 1997
	DEPENDENT MOBILITY		INCONTINENT		DEPENDENT EATING		DEPENDENT MOBILITY, EATING, AND INCONTINENT
	1985	1997	1985	1997	1985	1997	1985	1997
TOTAL
65 OR OLDER	75.7	79.3	55.0	64.9	40.9	45.1	32.5	35.7
65 TO 74	61.2	73.1	42.9	59.2	33.5	42.1	25.7	30.7
75 TO 84	70.5	77.1	55.1	64.3	39.4	44.8	30.6	34.5
85 OR OLDER	83.3	82.6	58.1	66.9	43.9	46.1	35.6	37.8
MEN
65 OR OLDER	71.2	76.3	54.2	65.0	36.0	42.8	28.0	33.6
65 TO 74	55.8	72.3	38.8	60.1	32.8	42.7	24.1	32.9
75 TO 84	65.7	75.1	54.4	65.9	32.6	43.7	25.5	34.6
85 OR OLDER	79.2	78.3	58.1	65.6	39.2	42.1	30.9	33.0
WOMEN
65 OR OLDER	77.3	80.2	55.4	64.8	42.4	45.6	33.9	35.9
65 TO 74	64.5	73.7	45.4	58.6	34.0	41.6	26.7	29.2
75 TO 84	72.3	78.0	55.3	63.6	42.0	45.3	32.6	34.4
85 OR OLDER	84.3	83.5	58.1	67.2	45.0	46.9	36.7	38.8
Note: Residents dependent in mobility and eating require the assistance of a person or special equipment. Residents who are incontinent have difficulty in controlling bowels and/or bladder or have an ostomy or indwelling catheter. Rates for the 65 or older category are age-adjusted using the 1995 National Nursing Home Survey population. Reference population: These data refer to the population residing in nursing homes. Persons residing in personal care or domiciliary care homes are excluded. Source: National Nursing Home Survey.

Male	46%
Female	54
Average age of active civilian participants	51
Average age of active military participants	45
Chose compound inflation protection	69

AL	103	CT	202	ID	136	LA	90	MS	100	NJ	192	OR	142	TX	130	WI	166
AK	413	DE	129	IL	133	ME	175	MO	105	MN	144	PA	149	UT	115	WY	100
AZ	137	DC	184	IN	141	MD	151	MT	100	NY	178	RI	155	VT	100	AVG	140
AR	118	FL	120	IA	101	MA	201	NE	142	ND	100	SC	118	VA	115
CA	156	GA	102	KS	110	MI	127	NV	130	OH	151	SD	100	WA	177
CO	117	HI	127	KY	127	MN	133	NH	199	OK	92	TN	126	WV	125

AL	103	CT	202	ID	136	LA	90	MS	100	NJ	192	OR	142	TX	130	WI	166
AK	413	DE	129	IL	133	ME	175	MO	105	MN	144	PA	149	UT	115	WY	100
AZ	137	DC	184	IN	141	MD	151	MT	100	NY	178	RI	155	VT	100	AVG	140
AR	118	FL	120	IA	101	MA	201	NE	142	ND	100	SC	118	VA	115
CA	156	GA	102	KS	110	MI	127	NV	130	OH	151	SD	100	WA	177
CO	117	HI	127	KY	127	MN	133	NH	199	OK	92	TN	126	WV	125