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Home Health Care Friendly LTC
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I think you did not read my post carefully. I was talking specifically about someone who only wanted HHC because they thought it would be more affordable than a traditional policy that covered nursing home care.
I think I made it clear that I am just starting out studying LTCi, and not making claims, but asking for advice.
In the case I brought up, IF a person had a spouse who they think could care for them in an LTC necessity, and in that case on a rehab program of a couple years (such as recoup from a stroke) such as not inclined to admittance to a LTC facility, I would think $50/day would suffice for HHC. I am envisioning the spouse either taking time off from work, or paying for a HHC agency to cover for him/her 9-5 and the spouse takes over after work.
Could it be that you can only think of ONE way to provide for LTC? The subject formerly being discussed was MedAmerica's supplemental policy where the benefits are paid per diem rather than reimbursed on an expense-incurred basis. I am trying to find out if this is cost effective.
My intuition tells me that there will not be a significant difference in premiums between a $50/day policy from MedAmerica and say, John Hancock. BUT... having a cash payment up front, rather than wait for reimbursement after submitting a claim and waiting for a month or more for insurance company settlement may be a big thing.
THAT's the discussion I am looking for.
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Larry, you hit the nail on the head. I have thought about this for some time.
Here is what I found from today's surfing:
A++ rated LTCi carriers -
Berkshire Life (Actually Guardian... who is leaving this year)
Mass Mutual
New York Life
Northwestern Mutual
State Farm
A+ rated -
John Hancock
MetLife (yes, I know they recently bowed out)
Mutual of Omaha
Prudential
A rated -
American General
Genworth (formerly GE... and whose stock has been as low as $1 in the not too distant past... amazing they are rated this high)
TransAmerica
A- rated -
AFLAC --- but maybe not tomorrow!
Assurity (yes, they are out, too)
LifeSecure
Unum
B++ rated -
MedAmerica
Bankers Life (whose parent company, Conseco, (or should I say CNO Financial) has been through bankruptcy recently.
I note that MedAmerica keeps company with the lower rated Bankers and not with the big dogs. This is a major concern for me. As noted, LTC is a need that is expected to require long term financial viability. Other health insurance can be replaced annually or less... in most cases without much difficulty. Med Supps, for example, will often waive pre-ex if the client was previously covered on a carrier that left the market.
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- 657
I'm sticking with my comment, " What can $50 a day get you in 2011, much less 10-15 years down the road." Sorry, you are kidding you clients with this line of thinking.
You are still locked in your thinking. If a client, retired, had a stroke and was being cared for by their spouse, I would think $50/day would be quite satisfactory. They would need a little cash for trips to the local pharmacy, etc. Perhaps some rehab... Health insurance would pay for health care providers, and SS and (possibly) their pension would cover their daily needs. The $50 would come in handy for extra gas they would not normally use. What else to cover in this scenario?
Now, if there were no pension and the spouse had to work, then it gets thicker.... they would need HHC to cover for the spouse when at work, etc.
Ever try to think outside the box?
- 657
Sorry..that box is unrealistic.
If that is the case, why do plans offer a $50/day benefit?
I think you are just being obstinate.
Anybody else out there willing to engage this discussion?
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I think a $50/day benefit is about as useful as a $3K life insurance benefit. Sure, it's money, but not even close to what is necessary.
Here's a scenario as to why I might recommend $50.
Client has $50K saved for LTC and is 70. He puts it into a Moneyguard policy which pays up to $2,474 per month or about $82 per day. By purchasing a small (and affordable) LTC policy for $50 he now has just about enough for HHC.
I have 1st hand experience with someone who had a stroke at 68. Only took about 2 years to run through both the equity in a condo and the balance in an IRA. $200K down the drain. A $50 a day benefit would have saved my mother $36K over two years. Not enough to really matter.
Just because someone thinks a spouse can handle things, that may not be the case. Can a 125 lb woman help her 220 lb. husband into and out of a shower when he can't walk? How about helping him wipe himself?
The reason for LTC is so that the spouse (or kid, etc) can supervise care, not provide it. I take care of my mother but fortunately we have someone that comes in 3 times a week. This help does not cost $50.
Hope that puts a bit of perspective on $50. benefit.
Rick
Here's a scenario as to why I might recommend $50.
Client has $50K saved for LTC and is 70. He puts it into a Moneyguard policy which pays up to $2,474 per month or about $82 per day. By purchasing a small (and affordable) LTC policy for $50 he now has just about enough for HHC.
I have 1st hand experience with someone who had a stroke at 68. Only took about 2 years to run through both the equity in a condo and the balance in an IRA. $200K down the drain. A $50 a day benefit would have saved my mother $36K over two years. Not enough to really matter.
Just because someone thinks a spouse can handle things, that may not be the case. Can a 125 lb woman help her 220 lb. husband into and out of a shower when he can't walk? How about helping him wipe himself?
The reason for LTC is so that the spouse (or kid, etc) can supervise care, not provide it. I take care of my mother but fortunately we have someone that comes in 3 times a week. This help does not cost $50.
Hope that puts a bit of perspective on $50. benefit.
Rick
Arthur Rudnick
Guru
- 1,652
Well, NADM called it........... He said that this was going to be an interesting conversation and it sure turned out that way.
We started out with the question “WhichLTC carrier would you go with if your client’s primary interest is to use it for home health care?”
My answer was "any carrier that offered a 100% cash-benefit policy". I stand by that and will if necessary, take on all who questions my logic for recommending it.
In NY, MedAmerica is the only game in town. Pru offers a cash-benefit policy for home care at 30% more than MedAmerica, but will shortly be discontinuing that policy.
Everyone’s first choice is to stay at home and a cash-benefit policy is the most flexible policy for home care.
My brother-in-law (The president of MedAmerica, North America & South America) told me that his company is owned by Excellus, a $5 billion, non-profit company. They own a majority of the BC/BS carriers throughout the country. I believe that on their own, MedAmerica is rated B+ (Strong with AMBest). Excellus is an ‘A’ rated company.
$50/day does not do much for someone who needs assistance in performing ADLs. In NY, $50/day will buy 2-3 hours of help each day. Home Health Care, if needed 24/7 will run at least the cost of a nursing home, which averages about $75,000/yr throughout the country. In the NY metro area, a nursing home will run $120,000-$140,000/year.($350+/day)
Again, compare rates and you’ll find that for those who are healthy in their 50’s, Simplicity will be very competitive with every other major carrier. All things being equal (and they never are) if a 100% cash-benefit policy is the same price (or less) than a reimbursement policy, why would you sell a reimbursement policy?
Retread states:
“Now, if there were no pension and the spouse had to work, then it gets thicker.... they would need HHC to cover for the spouse when at work, etc. The $50 would come in handy for extra gas they would not normally use. What else to cover in this scenario?”
Retread, thinking outside the box does not apply in this situation. If you’re looking to sell a LTC policy with only $50/day in benefits and you feel the $50 will come in handy for extra gas, I’m not sure you understand the concept of LTC insurance.
We started out with the question “WhichLTC carrier would you go with if your client’s primary interest is to use it for home health care?”
My answer was "any carrier that offered a 100% cash-benefit policy". I stand by that and will if necessary, take on all who questions my logic for recommending it.
In NY, MedAmerica is the only game in town. Pru offers a cash-benefit policy for home care at 30% more than MedAmerica, but will shortly be discontinuing that policy.
Everyone’s first choice is to stay at home and a cash-benefit policy is the most flexible policy for home care.
My brother-in-law (The president of MedAmerica, North America & South America) told me that his company is owned by Excellus, a $5 billion, non-profit company. They own a majority of the BC/BS carriers throughout the country. I believe that on their own, MedAmerica is rated B+ (Strong with AMBest). Excellus is an ‘A’ rated company.
$50/day does not do much for someone who needs assistance in performing ADLs. In NY, $50/day will buy 2-3 hours of help each day. Home Health Care, if needed 24/7 will run at least the cost of a nursing home, which averages about $75,000/yr throughout the country. In the NY metro area, a nursing home will run $120,000-$140,000/year.($350+/day)
Again, compare rates and you’ll find that for those who are healthy in their 50’s, Simplicity will be very competitive with every other major carrier. All things being equal (and they never are) if a 100% cash-benefit policy is the same price (or less) than a reimbursement policy, why would you sell a reimbursement policy?
Retread states:
“Now, if there were no pension and the spouse had to work, then it gets thicker.... they would need HHC to cover for the spouse when at work, etc. The $50 would come in handy for extra gas they would not normally use. What else to cover in this scenario?”
Retread, thinking outside the box does not apply in this situation. If you’re looking to sell a LTC policy with only $50/day in benefits and you feel the $50 will come in handy for extra gas, I’m not sure you understand the concept of LTC insurance.
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Arthur. Thanks. My point exactly. $50 will not buy one tank of gas today. What has that got to do with care?
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Retread. Yes, I am being very obstinate. Why would I be anything else when I am right and you are wrong. Sorry if I hurt your feelings....but you are wrong, and should not consider selling long term care insurance in the box you are in. Get out of your box. It is an unrealistic box.
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Retread. Yes, I am being very obstinate. Why would I be anything else when I am right and you are wrong. Sorry if I hurt your feelings....but you are wrong, and should not consider selling long term care insurance in the box you are in. Get out of your box. It is an unrealistic box.
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Feelings have nothing to do with it. I needed more wood for the fire. Art provided some, and so did Rick. Yes, I can see that $50 is pitiful... I just needed to know if there was a market for this plan at all. It would seem someone might be able to supply an argument for it, or why else is it offered?
Well... I think the case needs to rest. I concede that I see no compelling reason to offer such a low benefit as $50/day.
My thanks to everyone who contributed... including you, Bill.
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