Archives for September, 2013

‘Independence, dignity, control': three ‘hot buttons’ when discussing long term care

September 30th, 2013, Comments Off.

The greatest threat to a person’s wealth, according to long term care authority Karen Henderson, can be summed up in one word: longevity.

“Living too long is a threat to your wealth,” Henderson, CEO and founder of the Long Term Care Planning Network, said during a presentation on the topic Monday during the NAIFA Career Conference and Annual Meeting in San Antonio.

Those who plan (and are able) to live with financial security are the fortunate ones. But families with an aging parent or loved one who unexpectedly requires some form of managed care are at risk of draining their financial portfolios, and may have to take it upon themselves to care for their loved ones. The costs for long term care for an individual can run $40,000 to $56,000 a year. Studies show that unpaid family and friends provide the bulk of long term health care services, about $17.5 billion worth of care a year.

With dementia – or cognitive disorders – striking 5 million Americans every year, all families should have a plan on how to care for aging family members who may be at risk of dementia or any other disorder requring long term care, Henderson said. There are several reasons families choose not to have a plan, and Henderson has heard a few:

“Some (consumers) are confident that they will not have use for care planning; others have a lack of awareness and don’t know where to go to get information about it,” she said. Some people do not like the thought of living in a nursing home and think family members will be available to take care of them when the time comes.

Henderson’s advice to agents who sell long term care insurance: “Engage your clients in care planning. Ask questions and get them to establish a need” for the product. Henderson said agents should look for “clues” to their clients’ future well being, such as, does Alzheimer’s run in their family? Do they exercise and eat well? How is their mental health and do they deal with stress in their lives?

There are three words or “hot buttons” that resonate with clients when discussing long term care: independence, dignity, control. “Those three words mean something, and it gets people to take action and think about how to take control over their future now,” Henderson said.

Families that do not make decisions in advance could find themselves in disagreement on critical issues during a time of crisis.

“It’s all about timing,” Henderson said. “Long term care planning allows families to maintain relationships through supervising care, not providing the care.”

Tony Boquet – Health Care Reform: Overview, Updates and Opportunities

September 30th, 2013, Comments Off.

Recent surveys show that 53 percent of the American public does not know what the Affordable Care Act is. Tony Boquet, CLU, ChFC, CASL, CLF, LUTCF, told NAIFA members who attended his workshop at the NAIFA Career Conference that the job of agents and brokers is to take complexity (the ACA is 1,000 pages long and has spawned reams of regulation) and make it simple so clients can understand.

As a specific example, Boquet said is the ACA’s “Play or Pay” rule, which says businesses with 50 or more employees must provide affordable health coverage or pay a $2,000 tax for every employee above the first 30. “It falls to agents to educate businesses on the consequences of play or pay by 2015,” Boque said.

The ACA is going to increase costs, Boquet said, by removing cost-containment strategies currently provided by underwriting as well as annual and lifetime limits. The law’s essential health benefits provision means that certain types of coverage are required – even for those who may not want them. For example, Boquet says, an unmarried 19-year-old female will be required to carry maternity coverage, even if she has no intention of becoming pregnant. People will have fewer choices and will be paying for things they don’t necessarily want.

The psychology of consumers also plays a part. Boquet cites research showing that people with spending authority who are ultimately not responsible for paying the bill spend 300 percent more than those spending their own money. An individual whose health care expenses do not come out of their own pocket doesn’t care whether an MRI costs $6,000 or $3,000, Boquet says.

The ACA will also shift costs around. The law’s 3:1 age-band rating means that the highest risk insurees can pay no more than three times the premiums of those with the lowest risk. That means that people who are young and healthy will see their premiums rise. Employers, meanwhile, will shift their increasing costs to employees.

While a number of ACA provisions are troubling, Boquet says, they remain the law of the land. They present agents and brokers with opportunities to advise companies in need of strategies to contain costs while ensuring that they comply with the law.