Monday, January 28, 2013

Long Term Care Insurance Sales In The Connection Economy

The rules that govern marketing and sales of long term care insurance no longer apply and success going forward will depend on how well insurance agents adapt to the ‘Connection Economy’ declares a leading industry expert.

“The insurance industry and especially insurance agents lag woefully behind the curve in accepting the new reality of how American consumers seek and obtain information and make buying decisions,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. The founder and head of the national trade group based in Los Angeles, CA advised insurance agents of the need to adapt in order to flourish in the new ‘Connection Economy’ as he describes it.

“Change is occurring faster than most people are prepared to adapt and while it is generally perceived as young people who most utilize technology, older consumers, those who are prospects for long-term care insurance are rapidly changing as well,” Slome notes.

As evidence, the Association executive noted the dramatic increase in the number of people using online search engines to research information and connect with resources who can provide both competitive products as well as expertise. “In the Connection Economy establishing your expertise in the eyes of the public is paramount,” Slome says. “It is amazing how many insurance professionals still have no online presence or a poorly crafted one, when so many free opportunities such as Linkedin exist,” he shared with agents recently.

Slome who founded the Association in 1998 and is an award winning marketing and sales executive urged insurance professionals to devote just one hour each week to efforts related to improving how they connect with new world consumers online. “Most independent agents do not need a website, or can utilize a low-cost template version, but they must learn how to effectively create an online presence so that consumers who are seeking information or checking our their professional credentials can accomplish this with relative ease,” he added.

Monday, January 21, 2013

Medicaid Funding Shortfalls Will Propel Long Term Care Insurance Growth

Medicaid underpayments to skilled nursing facilities are reported to exceed $7 billion in 2012, the largest deficit since the study of this data was first started.

“Long term care insurance will become known as nursing home avoidance insurance,” predicts Jesse Slome, executive director of the American Association for Long Term Care Insurance, the national trade group based in Los Angeles, CA. “Medicaid already underpays for every patient and the pending Federal budget talks are only going to make matters worse.”

According to the study released by the American Health Care Association, the average shortfall amounted to $22.34 per patient day. “For a two year nursing home stay, Medicaid is underpaying by $16,300 an amount that nursing homes expect to cover from payments from private-pay patients,” Slome explains. “That’s an unsustainable model and people will understand that inevitably there will be two classes of care, one for those with the ability to pay and the other who must depend on whatever government programs exist at the time.”

The estimated typical Medicaid shortfall for 2012 of $22.34 per Medicaid patient day was reportedly 14.3 percent higher than the preceding year’s projected shortfall of $19.55 the report notes. Researchers point out that for a typical nursing home facility with 100-beds where 63 percent of residents rely on Medicaid for coverage, this shortfall would mean a loss of more than $500,000 annually.

“It’s not an ideal situation but it’s a real issue and unless the taxpaying public has a significant change of heart and chooses to pay more taxes to cover all the future needs of Medicare and Medicaid, the shortfall will only grow,” explained Slome. The national long-term care insurance expert noted that as awareness of the issue grows, people will realize that even a basic amount of long-term care insurance can help them avoid becoming dependent on family members or a deficient government program.

“We have millions of people who have no plan in place, find a million excuses for procrastinating and then are forced to depend on whatever government programs exist.” Slome adds, urging the membership of the organization to play a role in educating the American public.

Monday, January 14, 2013

Long Term Care Insurance Claims Tend To Start After 70

Los Angeles, CA – January 14, 2013: The majority of long term care insurance begin after the policyholder reaches age 70 according to an industry study but planning needs to take place at least 10 years earlier.

“We hear from so many people who start looking into long term care insurance at an age when they can no longer health qualify or afford the cost of coverage,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the national trade group that recently published the study. “While our studies show that claims tend to start after age 70, we stress that the sweet spot to start planning is between 55 and 65.”

According to the Association’s yearly study of policy sales and claims, nearly one in four (24.1 percent) of the long term care insurance claims started in 2011 were made by individuals between 70 and 79. Just over two-thirds (66.5 percent) of new claims started after the policyholder reached age 80.

“While you could need long term care because of an accident or illness, the vast majority of us are going to need care as the result of living a long life,” Slome notes. “But just as you can not purchase homeowner’s insurance protection after a house fire, with long term care insurance you need to buy when you can health qualify and our health changes, usually for the worse, as we get older.” The average age of applicants for new policies currently is about 56 according to the national trade group.

No one that I know believes private long term care insurance is the universal solution for the nation because we have millions of people who can not afford or health qualify for protection. Even if the Commission recommends a national taxpayer paid-for long term care program as exists in some other countries, there will be a place for private insurance by those who do not want to depend on whatever government benefits may be available.”

Each of the insurers establishes their own criteria for health qualifications, the national long-term care insurance expert explains. “Some conditions that are not acceptable to one insurance company may be acceptable to another long term care insurer,” Slome explains. “To get the best selection of policies and long term care insurance costs, it is advisable to work with an insurance professional who is appointed to sell at least four or five of the leading long term care insurance companies, including Genworth, John Hancock, Mutual of Omaha and Transamerica.”

Monday, January 7, 2013

Federal Long Term Care Insurance Program Repealed By Congress

Congress has formally repealed the federal long term care insurance program, the CLASS Act, as part of the American Taxpayer Relief Act of 2012 signed into law yesterday by President Obama.

According to Jesse Slome, executive director of the American Association for Long-Term Care Insurance the Community Living Assistance Services and Supports (CLASS) Act, was passed into law by Congress and was envisioned as a voluntary, worker-paid long term care insurance benefits program. “The program never got off the ground because you can not offer a guaranteed issue insurance product on a voluntary basis and still make it affordable,” Slome explained. As a result, Health and Human Services Secretary Kathleen Sebelius formally announced to Congress that she would not proceed to set up the CLASS Act program because she could see no way to guarantee that the program would be actuarially sustainable.

“Formal repeal simply puts the matter to rest,” Slome notes. “Plus, there were several million dollars in promotional dollars that were still able to be used that have apparently now been rescinded by the new law.”

The new law signed by the President also establishes a new Congressional Long Term Care Commission that will study the issue and is required to provide a report to Congress within six months after work gets started. “The law stipulates that at least one member of the commission should have some private insurance experience,” Slome adds.

 Long term care is an enormous issue that impacts millions of America families, Slome notes. “It is an integral part of the Medicare and Medicaid discussions that will be taking place, so it’s good that the issue is being discussed,” Slome adds. “Hopefully they pick the best and brightest 15 people to address the issue in a fair and balanced way that will benefit the nation and its citizens as opposed to vested special interest groups.”

The formal repeal of CLASS will likely increase interest in long term care insurance according to the AALTCI director. “I’m not sure many people were even aware that CLASS was part of Obamacare,” Slome concludes. “But, for those who think there is a government solution around the corner, I suppose repeal is an indication that people need to take responsibility for their own personal planning.”

Wednesday, January 2, 2013

Eldercare Spending To Rise; More Americans Will Buy Long Term Care Insurance

Los Angeles, CA – December 24, 2012 Spending on elder care services including skilled nursing, home health care and assisted living are predicted to grow 5.2 percent annually and will amount to $319.5 billion by 2016.

According to a study just published by The Freedonia Group, a Cleveland-based research firm, the growth rate projected for the period 2011 through 2016 will be 5.2 percent yearly, a nominal decrease from the 5.5 percent annual rise for the period 2006 to 2011.

Revenues for skilled nursing facilities were reported at $106.9 billion in 2011 according to the study and are projected to grow to $126.5 billion in 2016 and $146.5 billion by 2021. Revenues for home health care services were reported and projected to be $61.1 billion, $85.5 billion and $120.5 billion for the same time periods.

The growth will largely be driven by the aging ‘baby boom’ generation entering their retirement years. The study’s authors note that growth will be restrained by continuing efforts at the state and federal levels to curb Medicaid and Medicare expenditures, “often by either limiting reimbursements or by directing patients to less expensive forms of care” the study’s authors predict.

“There is no question that there will be an enormous growth in demand for eldercare services which will place an enormous burden on families,” declares Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Medicare and Medicaid will not be able to carry the burden without seeking additional tax revenue or forcing states to reduce allocations to other programs such as education. You just can’t have everything unless someone is willing and able to pay.”

Slome predicts the growth of interest in long term care insurance a private form of coverage already owned by some eight million aging Americans. “If you want to have some choice in your care you either have to have sufficient dollars to pay, have a family member willing to provide free care or some insurance that will cover some of the cost,” Slome explains. “People are increasingly aware of the importance and more are looking into the area every day.”

The organization predicts sales will continue to grow especially among those in their mid 50s to mid-60s. “That is the age band when long term care insurance is most affordable and when a majority of people can still health qualify for coverage,” Slome notes.