Employers Are the Critical Link

Posted on December 13th, 2011 by Em-Power Services

Today, seven million Americans are working full-time and providing long-term care for someone.

The percentage of adult children providing personal care or financial assistance to a parent has tripled over the past 15 years. A quarter of all adult children provide care to a parent.  Of these, approximately 57 percent provide 16 or more hours of care a week, with 31 percent providing over 30 hours a week.

To manage the demands of family, work, and caregiving, six out of 10 caregivers will make a workplace accommodation –arriving late or leaving early, taking a leave of absence, or dropping back to part-time work. One study estimates that approximately 170,000 caregivers—60 percent of whom are women—leave the workplace every year.

Estimates of the costs to employers range between $17.1 and $33.6 billion annually—the result of increased absenteeism, shifts to part-time work, workday interruptions, and the cost to hire and train replacements for those who leave the workforce. In addition, a recent study found that working caregivers use eight percent more health care services due to increased levels of stress, anxiety, and physical strain—adding an additional $13 billion annually to the tab for employers.

Discussions in Washington about new or expanded federal programs to help deal with long-term care costs have been largely unproductive. The Obama Administration decided not to move forward with the Community Living Assistance Services and Support (CLASS) Act in October (the part of the healthcare reform law that deals with long-term care).   Howard Gleckman, a former BusinessWeekreporter and a resident fellow at the Urban Institute (author of the book Caring for Our Parents), says, “We are in an era of real funding constraint by the government that will get worse long before it ever gets better [for long-term care].”

The good news is that companies are in a unique position to help their people by sponsoring group programs that are paid for by employees at little or no cost to the company, and that offer employees many benefits—including education, premium discounts, and underwriting concessions.  These sponsored plans give employees and their family members the opportunity to purchase coverage that gives them peace of mind and allows them to remain more focused at work.

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Long-Term Care Givers Know

Posted on November 3rd, 2011 by Em-Power Services

Employees who have experience providing long-term care know what it means to plan ahead.

A study released by Northwestern Mutual Life Insurance Company found that nearly eight out of ten Americans acknowledge the need for long term care (LTC) planning, yet nearly half (45%) aren’t sure how to address future LTC needs, Financial Advisor Magazine reports.

However, those who have experience providing long-term care are twice as likely to discuss long term care options with family and friends (43% vs. 23%). This is because they have seen how emotionally and financially draining providing long-term care can be on loved ones.

The study also found that this group is also nearly twice as likely to have addressed the need for long term care with their own retirement plans (30% vs. 17%), and more likely to understand their options and resources available when it comes to LTC planning (56% vs. 34%).

Whether or not they had direct experience with providing care, almost two-thirds of those surveyed understood that LTC services will rise faster than the return on their savings. A recent analysis placed cost increases in the 5 – 6% range on annual basis for long-term care services except home health care.

Northwestern Mutual’s survey was conducted online by Harris Interactive from October 11-13, and comprised 2,194 American adults ages 18 and older.

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Congress Debates Class Act Fall Out

Posted on October 27th, 2011 by Em-Power Services

The Hill a Congressionally focused newspaper based in Washington, DC reported that the Energy and Commerce Committee’s Health and Oversight subcommittees held a joint hearing on the CLASS Act on Wednesday.

Among those who testified at the hearing was former Rhode Island Congressman Patrick Kennedy, who’s father led the fight for health care reform for decades. Kennedy called the rapid growth of those age 65 and over coming in the next several decades a “demographic tsunami” — meaning the need would far outstrip available funds in Medicare and Medicaid. In 2000 there were approximately 35 million people age 65 and older. This is now estimated to grow to 70 million by 2030.

What was apparently left unsaid at the hearing is that employers are now the critical link in the long-term care chain by default. Employers can help pre-retirees plan for long-term care needs through insurance, and in doing so, protect their savings and retirements. The average length of long-term care is three years, and can easily exceed $250,000 in costs, wiping out most patient’s savings and retirement. Federal programs only kick-in after savings are exhausted and are for nursing home care.

Today, the House is scheduled to vote on a bill that would roll back the healthcare law’s Medicaid expansion. The bill, sponsored by Rep. Diane Black (R-Tenn.), would change the way the federal government calculates whether people are eligible for Medicaid. About a million middle-income people who became eligible for Medicaid under the reform law would lose that eligibility if Black’s bill were to become law. The Hill reports that the bill will likely pass easily.

Republicans are also pushing hard to formally repeal the CLASS Act from the healthcare law, reports the Hill. They also reported that the U.S. Chamber of Commerce endorsed repeal last Friday, saying Congress shouldn’t leave an unworkable program on the books even if HHS isn’t going to try to implement it.

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Long-Term Care Costs Outpace Medical Inflation Rate

Posted on October 26th, 2011 by Em-Power Services

Bloomberg Businessweek is reporting that the average cost for assisted living rose 5.6 percent to $41,724 this year, compared with a 5.2 percent increase last year.

The report comes from data contained in a report by MetLife’s Mature Market Institute released this week.  That report found the cost for a private nursing-home room increased 4.4 percent to $87,235 a year and adult day services climbed 4.5 percent to $70 a day. Home health-aide service was unchanged at about $21 per day.

Of particular concern is that the report finds that this year’s increases are greater than previous years. A MetLife representative noted that, “the state of the economy, combined with rising health-care and energy costs, are having a significant impact on long-term care rates… Long-term care rates continue to outpace the medical inflation rate.”

Federal Government options for supporting the costs associated with long-term are limited. The Obama Administration recently decided not to move forward with a public long-term care financing option called the Class Act. Medicare covers only short-term nursing and home health services.

“This is why the employer is central in the long-term care equation,” noted Em-Power Services President Doug Ross. “Without long-term care insurance, future retirees are going to face a financial crisis where they spend all of their savings and retirement to pay for long-term care.”

An employer that offers group long-term care insurance as a benefit can help employees protect their savings and retirement. It’s estimated that one of two people age 65 and older will require some form of long-term care. The average length is three years, and costs can exceed $250,000.

Many states offer additional tax deductions for employers who offer long-term care insurance as a benefit.

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Procrastinating on Long Term Care Planning? You’re Not Alone

Posted on October 3rd, 2011 by Em-Power Services
Sun Life Finance entitled their latest pulse poll “Shut Your Eyes and Hope for the Best”, after it found that only 36% of respondents think they will need long term care in their lifetime. In reality, about 70% of Americans over age 65 will need long term care at some point.
The study’s commentary states that “many Americans harbor a discomfort with aging and mortality, and experience wishful thinking about their chances of living independently in their final years. This mix of dread and hope has led to a counterproductive paralysis about long term care planning”. The study also found that most respondents “fail to grasp the scale of rising nursing home costs”.
Importantly, however, the study also finds that even with that sense of dread, people age 50 and older are both very aware and concerned about paying for long term care. The survey found that 57% of this group is worried about financing long term care, including affluent respondents.
Not surprisingly the worry about long term care increases as people approach age 65, particularly for those who are single.

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Goverment Study Shows Value of LTC Benefits

Posted on September 13th, 2011 by Em-Power Services

A study by Government Accountability Office (GAO) demonstrates the value policy holders perceive from Long Term Care Insurance.

The study examined the federal long-term care insurance program (FLTCIP), which has offered long-term care insurance to federal employees and retirees since 2002. With 268,204 enrollees as of June 2011, FLTCIP is the largest private long-term care insurance program in the nation.

While the study examined the government contract in depth, an important finding for all consumers is that a majority of policy holders value the benefits over reduction when offered the choice. Only 1.6% of Federal long term care insurance enrollees chose to discontinue their coverage in the face of premium increases.

The federal government has recently taken steps to increase the use of private insurance to pay for long-term care costs from current or retired federal employees.

This shows consumers understand the importance of LTC insurance and are willing to pay for the value of protecting their retirement and providing for long term care.

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The Case of Pat Summitt Shows Different Side of Long Term Care

Posted on September 2nd, 2011 by Em-Power Services

University of Tennessee’s announced this week that their highly regarded Women’s Basketball Coach, Pat Summitt, has been diagnosed with Alzheimer’s disease. She’s only 59.

Ms. Summitt is a paragon of fitness and sports. Her team has amassed over 1,000 victories and nine national championships. She is now the face of younger people living with Alzheimer’s.

Over 200,000 people in the United States living with Alzheimer’s are under the age of 65. Alzheimer’s is one of the leading diseases requiring long term care support.And one of the most expensive.

When employers think of long term care, they often think of retirement and the elderly. However, long term care needs can begin early from disease as in Ms. Summitt’s case, an auto or sports accident, or another type of diagnosis.

The need for long term care insurance is growing in this country as nursing home and assisted living care costs reach toward $100,000 annually.

Few of us can afford that without wiping out savings, and perhaps even losing our home.

This is why employers need to rethink their benefit portfolio to include long term care insurance option for employees.

With the rapid rise in long term care costs, a need among younger employees, and potential changes to Medicare and Medicaid in Congress, employers will need to fill the gap.

America’s workers are more exposed than ever.

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Is Long Term Care at the Center of the National Credit Debate?

Posted on August 10th, 2011 by Em-Power Services

There’s an excellent article on the web site “Helping You Care” (which is a quasi non-profit organization based in Florida) that points to the fact that within in the S&P downgrade was a strong reference to the issues around long term care.

The article notes, “In all the political finger pointing and hot rhetoric, few have noticed that in its Rationale for its current rating action, S&P specifically cites its previous report, “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” issued on June 21, 2011. In that report, S&P warned that a “looming U.S. fiscal bill is growing as the population gets older,” and that “the challenges facing the U.S. are more severe than those facing many of the other major industrial societies … because of its rapidly escalating health care costs.”

S&P’s June, 2011 report introduced the subject by stating:

“As the baby boomers start to reach retirement age, the percentage of the U.S. … population eligible for government support will begin to mount. Babies born in 1946 turn 65 this year and will become eligible for Medicare. They will also be entitled to start collecting full Social Security retirement benefits next year, under the current system. The U.S. government, however, is not currently collecting enough money to pay its Medicare, Social Security, and other long-term bills.”

In that June report, S&P pointed out, “In 2010, there were 26 retirees for every 100 members of the U.S. labor force. By 2050, however, we expect that there will be 50 retirees per 100 workers. In other words, the U.S. will go from four workers to support every retiree to only two.” [End of Quote]

The June S&P report, along with comments today from leaders in Washington, point to the fact that the future of long term health care as covered by Medicare and Medicaid are far from set in stone. In many cases, this were already a myth since they required dilution of retirement and other assets before being able to access.

As the debt ceiling discussion becomes more and more about health and long term care costs, those planning for their retirement will want to take every measure to protect themselves for the future, and that includes considering long term care insurance.

You can see the detailed article here.

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Planning for the “New” Retirement

Posted on July 19th, 2011 by Em-Power Services

An article published Associated Press writer David Carpenter takes an excellent look at how financial requirements.

Carpenter notes that big changes are coming to Medicare coverage by 2014, and that it’s now essential to include prospective health care costs in retirement planning. He recommends that retirees consider buying “Medigap” insurance and that “pre-retirees should consider buying long-term care insurance”. The reason is that a three year stay in a nursing home facility currently runs about $250,000 and will only increase.

Planning for heath care costs becomes even more important when you factor in some other issues about the “new” retirement.

First, notes Carpenter, is that retirees don’t spend less like they used to. With more active retirements now the norm, spending on travel, hobbies, and leisure activities has increased dramatically. He also notes that retirees won’t automatically be in a lower tax bracket.

Carpenter believes tax rates are likely to increase both at the Federal and state levels. He also makes the point that many retirees have paid off their mortgage, which removes those tax deductions. Some long-term care insurance policies offer tax deductions at the Federal and state levels, depending on where you live.

The point Carpenter drives home is that retirement isn’t what it used to be. Not only are we living longer more active, longer retirements, but we’re increasingly likely to need health at various points during this time in our lives, including potentially long-term care. Those who are planning for retirement need to think about how those health care needs will be managed without depleting savings.

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Study Finds Couples Not Aligned on Retirement

Posted on July 13th, 2011 by Em-Power Services

A new study published by Fidelity Investments finds that couples approaching retirement are often not aligned in their expectations.

The report states that nearly two-thirds, or 62%, of couples approaching retirement don’t agree on the age they will retire. Further, nearly half of couples don’t agree on whether they will continue to work during retirement.

Less than half of the couples surveyed (41%) stated they are handling investment decisions jointly. The result is that only 35% of wives surveyed said they were comfortable assuming household retirement finances if needed.

Wives surveyed also had a lower threshold for risk, with 21% stating their main objective was preserving wealth (a key reason to obtain long term care insurance).

The survey makes clear that as Americans age and approach retirement, they need to be clearer in their retirement and long term care financing plans.

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