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A number of countries have instituted long term care programs according to a review discussed by the director of the American Association for Long-Term Care Insurance.
According to Jesse Slome, executive director of the American Association for Long Term Care Insurance, a just published book, Universal Coverage of Long-Term Care in the United States, provides a look at the overall issue facing the country.
“Of particular interest were chapters dealing with how the issue has been and is being dealt with around the world,” Slome commented to a group of industry professionals yesterday. “There is a certain peace that comes from ignoring the world around you. It’s natural and today’s parsimonious political environment, it’s just too easy to say “enough” — what we are doing is just fine.”
Slome notes, despite the failure of the CLASS Act, which he ascribes to uninspired leadership, the long term care insurance expert says that “CLASS was an important building block that helped to make long-term care more prominent on the national agenda.”
“While it is unlikely that the United States with a history of private sector health financing will adopt a program similar to those already in place in other countries, reading how long term care is dealt with elsewhere provides historical perspective, factual data and valuable insight for anyone who has an interest in what will, I believe, be used to frame the discussion in the years to come,” the long term care insurance expert adds.
The authors lay out an interesting look at how various models have been shaped as much by politics and demographics as by societal factors such as family culture. “Of particular interest is the consideration of the changing demographic of working women in these countries,” Slome comments.
Demographics clearly drove the need to address the issue with Germany and Spain. Their population of persons age 65+ will increase from around 16 percent today to around 30 percent in 2040. In Japan more than 14 percent of the population will be 80+ in 2040 (double that of the US).
Germany’s universal LTC legislation passed in 1994 when 15.8 percent of its population was age 65 or older. Japan passed legislation in 1997, when its 65+ population was 15.7 percent. The proportion of US citizens 65+ was 13.0 percent in 2010 and is expected to be 19.8 percent in 2030.
“Germany and Japan adopted many LTC reform goals and policies consonant with their existing structures, funding arrangements, and cultures, and the US is likely to ultimately do the same at some point,” Slome predicts. “Americans are aging every day and few have a plan for dealing with the enormous risk of needing long term care that results from living a long life,” Slome explains. “Long term care insurance is a viable option for those who can health qualify and can afford a private option leaving everyone else to depend on family or whatever government programs exist.”
Monday, November 26, 2012
Monday, November 19, 2012
Association Explains 1035 Exchanges For Long Term Care Insurance Purchase
Provisions of the Pension Protection Act which took effect in 2010 enable individuals to take advantage of a new means for tax-favored long term care insurance payments according to a report published today.
“A 1035 exchange defers the internal build up of gains associated with the life insurance or annuity policies that would be taxable events,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Using a 1035 exchange to purchase long term care insurance protection effectively ensures that the taxable gain disappears entirely.” While the Association does not offer tax or legal advice the organization has published information to help educate more consumers about the tax advantaged planning technique.
“Individuals with an existing life insurance or annuity policy with a gain may wish to look into the advantages of a 1035 exchange,” Slome explains. “Actually, a partial 1035 exchange is more common today,” the leading long term care insurance expert notes. This involves using the 1035 exchange to pay the annual long term care insurance premium.
“Because not all insurance companies accept 1035 exchanges and because insurance policies can vary significantly from one insurance company to another, we strongly suggest consumers work with a knowledgeable professional,” Slome advises. “You would hate to find out what you thought would be a tax free event actually is now taxable or that you are paying much more than you might have by selecting a different top-rated insurer.”
Under the new rules individuals can complete a “like-kind” exchange from an insurance or annuity policy directly to a qualified long-term care insurance policy. The new law stipulates that the long term care insurance policy must be a “tax qualified” policy as defined under IRC Section 7702B. “Today, the vast majority of policies meet these criteria,” Slome adds. The rules also stipulate that the annuity policy must be non-qualified annuity. These are generally defined as annuities purchased with after-tax funds.
“A 1035 exchange defers the internal build up of gains associated with the life insurance or annuity policies that would be taxable events,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Using a 1035 exchange to purchase long term care insurance protection effectively ensures that the taxable gain disappears entirely.” While the Association does not offer tax or legal advice the organization has published information to help educate more consumers about the tax advantaged planning technique.
“Individuals with an existing life insurance or annuity policy with a gain may wish to look into the advantages of a 1035 exchange,” Slome explains. “Actually, a partial 1035 exchange is more common today,” the leading long term care insurance expert notes. This involves using the 1035 exchange to pay the annual long term care insurance premium.
“Because not all insurance companies accept 1035 exchanges and because insurance policies can vary significantly from one insurance company to another, we strongly suggest consumers work with a knowledgeable professional,” Slome advises. “You would hate to find out what you thought would be a tax free event actually is now taxable or that you are paying much more than you might have by selecting a different top-rated insurer.”
Under the new rules individuals can complete a “like-kind” exchange from an insurance or annuity policy directly to a qualified long-term care insurance policy. The new law stipulates that the long term care insurance policy must be a “tax qualified” policy as defined under IRC Section 7702B. “Today, the vast majority of policies meet these criteria,” Slome adds. The rules also stipulate that the annuity policy must be non-qualified annuity. These are generally defined as annuities purchased with after-tax funds.
Monday, November 12, 2012
Long Term Care Insurance Policy Utilization Explained By Expert
Consumers hold many misconceptions about long term care insurance and one industry expert shared research into utilization of the relatively new form of protection.
“This is really the first generation of Americans who in large numbers are living long lives and who are finding themselves facing a very high risk of needing costly long term care,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. A leading long term care insurance expert was preparing to speak to a gathering of nearly 600 industry leaders gathering in Las Vegas for the 2012 Long Term Care Insurance Summit.
“Because it is still such a new area, it is important to educate consumers not just to the real risk they face but ways to plan and prepare,” Slome adds. “An important aspect is sharing information that directly addresses the questions consumers have.” One question pointed out by Slome is do people actually use their policies.
According to the data shared by Slome, a study published in the organization’s 2012 Sourcebook, reports that the average time elapsed between the purchase of long term care insurance and the time a claim was filed is 108 months or approximately nine years. “There are several important things individuals must keep in mind,” Slome notes. “People must health qualify for long term care insurance which is intended to keep costs lower for everyone but it also means one is not likely to need care in a relatively short period of time.”
In addition, the organization points out that typically the cost of insurance paid over a 10 year period will be far less than even one year of the cost of care. “You may pay $1,000 a year but you could have over $150,000 of claim benefits paid,” Slome acknowledged. “We never advise thinking of this in investment terms because the real value is not being a burden on your family and loved ones, but the dollars and cents do make sense.”
November is Long Term Care Awareness Month and the trade group urges individuals to take 10 minutes to learn more about the issue. The organization offers four excellent consumer guides that are available online addressing ways to plan for the long term care risk and providing information relevant for those who may want to consider long term care insurance.
“This is really the first generation of Americans who in large numbers are living long lives and who are finding themselves facing a very high risk of needing costly long term care,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. A leading long term care insurance expert was preparing to speak to a gathering of nearly 600 industry leaders gathering in Las Vegas for the 2012 Long Term Care Insurance Summit.
“Because it is still such a new area, it is important to educate consumers not just to the real risk they face but ways to plan and prepare,” Slome adds. “An important aspect is sharing information that directly addresses the questions consumers have.” One question pointed out by Slome is do people actually use their policies.
According to the data shared by Slome, a study published in the organization’s 2012 Sourcebook, reports that the average time elapsed between the purchase of long term care insurance and the time a claim was filed is 108 months or approximately nine years. “There are several important things individuals must keep in mind,” Slome notes. “People must health qualify for long term care insurance which is intended to keep costs lower for everyone but it also means one is not likely to need care in a relatively short period of time.”
In addition, the organization points out that typically the cost of insurance paid over a 10 year period will be far less than even one year of the cost of care. “You may pay $1,000 a year but you could have over $150,000 of claim benefits paid,” Slome acknowledged. “We never advise thinking of this in investment terms because the real value is not being a burden on your family and loved ones, but the dollars and cents do make sense.”
November is Long Term Care Awareness Month and the trade group urges individuals to take 10 minutes to learn more about the issue. The organization offers four excellent consumer guides that are available online addressing ways to plan for the long term care risk and providing information relevant for those who may want to consider long term care insurance.
Monday, November 5, 2012
Long Term Care Insurance – Nursing Home Stay Duration
Over one in four individuals age 85 plus who resides in a nursing home has been there for three years or longer according to a report published by the long term care insurance industry trade group. Some 16 percent of that age group has been there for three months or less.
“While most long term care takes place today in the home, people still want to prepare for what we refer to as the worst case scenario, which is a nursing home stay,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. The organization publishes independently conducted research in their 2012 Long Term Care Insurance Sourcebook.
According to the data that reported the length of stay in a nursing home since admission, nearly a quarter (24.5%) of individuals under the age of 65 had been residents for three months or less. “About the same percentage (24.2%) had been there for between one and three years,” Slome notes. The study reports that 27.6 percent had been residing in the nursing home for three years or longer.
The study revealed compared those with stays of three years or more and found that 27.5 percent of women were residents longer, compared to 21.1 percent for men. “There’s no question that because women live longer lives, their risk of needing long term care services, which could take place in a skilled nursing home facility is greater,” Slome, one of the nation’s long term care insurance experts reports. “That is a reason we urge both women and men, but especially women, to do some long term care planning prior to reaching Medicare-qualification age.”
November is Long Term Care Awareness Month and the trade group urges individuals to take 10 minutes to learn more about the issue. The organization offers four excellent consumer guides that are available online addressing ways to plan for the long term care risk and providing information relevant for those who may want to consider long term care insurance. The guides can be accessed at http://www.aaltci.org/guides.
“While most long term care takes place today in the home, people still want to prepare for what we refer to as the worst case scenario, which is a nursing home stay,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. The organization publishes independently conducted research in their 2012 Long Term Care Insurance Sourcebook.
According to the data that reported the length of stay in a nursing home since admission, nearly a quarter (24.5%) of individuals under the age of 65 had been residents for three months or less. “About the same percentage (24.2%) had been there for between one and three years,” Slome notes. The study reports that 27.6 percent had been residing in the nursing home for three years or longer.
The study revealed compared those with stays of three years or more and found that 27.5 percent of women were residents longer, compared to 21.1 percent for men. “There’s no question that because women live longer lives, their risk of needing long term care services, which could take place in a skilled nursing home facility is greater,” Slome, one of the nation’s long term care insurance experts reports. “That is a reason we urge both women and men, but especially women, to do some long term care planning prior to reaching Medicare-qualification age.”
November is Long Term Care Awareness Month and the trade group urges individuals to take 10 minutes to learn more about the issue. The organization offers four excellent consumer guides that are available online addressing ways to plan for the long term care risk and providing information relevant for those who may want to consider long term care insurance. The guides can be accessed at http://www.aaltci.org/guides.
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