Comments on the finding – many do not understand the cost of long term care services and support.

I posted a Forbes article on Twitter a few days ago on people not understanding the cost of needed services and Long Term Care insurance. The article, by Howard Gleckman a Forbes contributor, included some research findings I want to comment on.

The article indicated more than 15,000 adults age 40 to 70 were surveyed in 2014 for the US Department of Health and Services. The findings revealed these interested things about people’s thoughts on long term care:

  1. Want lifetime coverage
  2. Low premiums
  3. Want to stay at home if on-going assistance is needed, make needed modifications, and rely on family and friends.
  4. Had little idea about the cost of long term services and support.
  5. Believe [2/3 of participants] the government needs to make an effort to promote Long Term Care insurance and there should be tax subsides to encourage people to buy.

Note: A problem with the suggestion in # 5 was brought out  – over 2/3 of all individuals could not take advantage of it, if it were now available, since they do not file an itemized tax return.

My post today is to share a couple comments on these findings. First – on the cost of these special services here in CT:

  • Having a certified home health aide in the Hartford area for six hours 4 times a week could grow to be over $5,500 a month in just 15 years.
  • A Assisted Living Facility can now cost up to $6,600 a month in the Hartford area; to $6,900 in the New Haven area; to $6,600 in the New London/Norwich area; and to $8,000 in the Bridgeport/Stamford area.
  • Skilled nursing facility costs in Connecticut are next to the highest in the U.S.! A semi private room is now over $146,000 a year.

Looking to the future in say 25 to 30 years when many may need on-going services with personal activities they may be three times higher. Paying directly would cause many people to quickly use up their savings nest egg and become poor!

Second – people expressed a desire for full coverage at a low premium. The facts however, tell us the cost of this special coverage, which I like to call long term health insurance, is high especially here in CT. Why? The need for one going help  is high today and will increase significantly:

  • Over 80% of us have a relative, or know someone, who is or has received help.  Some because “parts wore out” and others who were having trouble with mental ability.
  • 70% or more of us will need help by age 75! People by then have, on average, 2 or 3 chronic conditions and some as many as 10 or 12.

An observation about the cost of insurance vs the need for coverage:

When the risk of a claim is high the cost of insurance is high. For example, the cost for home owners insurance on a large home would be higher than coverage on a very small home. The large home has much more structure to replace and more things in it to cover if it burned down.  However, the risk for a home to burn down is low so home owners insurance is not that expensive.

Long Term Care insurance on the other hand is expensive because the risk help will be needed is quite high as mentioned above. But even though it costs a lot say in comparison to home owners insurance no matter how much your plan costs the amount you pay is just pennies compared to how much you would have to pay directly, based on the above costs, for all the help you need.

Want to also share an example of paying for coverage over time and then receiving benefits:

  • If a person buys a Long Term Care insurance plan with a four year benefit period and certain coverage at age 55 and then say at 80 needs help all the money they paid over this 25 year period could come back in benefits in just 7 1/2 months! (227 days).

The overall findings in the survey reveal a big need for more education on the need to plan and prepare for long term services and support. This communication effort needs to be made by private organizations and state and federal level government.

The Forbes article I posted on Twitter can be found here.

Many people plan for upcoming events in their lives. Most however, don’t plan for a significant event – not being able to care for themselves!

Even though most don’t make preparations taking steps to plan for the kind of help you would like is important. What to do? The most effective approach is to buy what is best called “Long Term Health insurance”. Taking this action today will not stop health problems from developing but does mean you can gain:

  • A lower cost: Premiums for this important insurance are based on your age the day you enroll, your health situation, and the level of benefits you select. Premiums can be three times higher at age 70 than when you are 50 so buying early is important.
  • More benefits: Waiting to age 55 means you would have to buy an initial benefit pool of over $400,000 to achieve the same protection as someone who bought an initial pool of $250,000 at age 45. How? The 45 year old’s plan included the 5% compound inflation option. Waiting to 55 also means your premium for this initial pool of money will be higher! Why? You are 10 years older. IOW a dollar buys more benefits the younger you are.
  • A good health discount: A study by the American Association for Long Term Care Insurance (AALTCI), a professional association I’m actively involved in, reports 53.9% of people between 40 and 49 qualify for a good health discount. Between 50 to 59 it drops to 44.2% – 60 to 69 it’s 31.9% – 70 to 79 it’s only 18.8%.
  • A better chance of being accepted: Another AALTCI study found up to 33% of individuals 60 to 69 did not qualify for this “protection for your finances” because they had health problems. 13.9% of individuals 50 to 59 were declined in this study of 10 leading long term care insurance companies.

Buying “Long Term Health insurance” also means you won’t become a burden on family having used up income, your nest egg, and becoming poor.

Live in Connecticut? You can learn more about why owning Long Term Care insurance is better than following a plan of “I’ll wait and see”  –

Contact John C Parker<RHU, LTCP if questions – (860) 739-0005

What people fear if a life changing illness happens!

Want to share some points from a recent online survey about people’s concerns. Sun Life Financial asked 4,116 full time employees, to describe their greatest concern if a life changing illness were to occur. Their average age was 43 and participants had a median household income of $51,000. The concerns expressed were about:

● The financial impact. 47% said this.

● Dying. 29% said this.

● The emotional impact. 22% expressed this.

People have indicated to me at various times a concern about not having enough money if something where to happen. Thus, I found it very much of interest that almost 50% are reporting this concern.

Since many are concerned the question becomes what can be done to offset it. I believe the most effective and economical solution is for individuals to buy Long Term Care insurance. Why?

  • Having funds in this special kind of insurance’s benefit pool means they can then hire professionals to provide needed assistance. Having professional help means they won’t become a burden on family. It will also enable them to be better able to maintain as much independence as possible and thus retain their dignity.
  • Children won’t have to face the very emotional and difficult task of providing personal care to a parent! Thus, they will be free to manage the assistance you are receiving; to care about you; plus help as they can.
  • Having this special kind of financial protection means you should not have to worry about the conflict, which often develops among children. What causes a problem? The concern, which is often raised, is their parent’s savings nest egg is being spent for the care of one parent vs retaining these funds for the other.

Some say – Wow Long Term Care insurance is expensive. Yes it is but in comparison to paying yourself for the very high cost of professional assistance here in Conn it results in the premium for this important insurance being lower than the premium cost vs risk of other insurance we have such as on our car or our home! 

Call John C Parker today at 860.739.0005 if any questions.

Insights on people’s thoughts and some changes Connecticut made regarding long term service and support!

Wanted to share some insights from a recent survey sponsored by UBS Wealth Management. Some highlights were recently reported in – In the survey  people were asked  – How worried are you – about various personal related issues. It was not focused on Connecticut but my sense is the findings also apply here.

● A common issue where 26% indicated they were highly worried was – “Being able to afford healthcare and the support I need in my old age”.

● This concern was higher than one many sources consider important – “Having enough money set aside for retirement”. Only 14% were highly worried about it.

● One point, of interest to me, was the fact that more people expressed concern about – “Having someone care for me in my old age” than did about having enough money.

● Another insightful point from the survey was that people from 25 to 49 expressed more concern on these issues than individuals age 60.

There was some information this week on long term services which is specific to Connecticut. Governor Malloy reported more funding was going to be directed to home and community based services (HCBS) for people who are eligible for MedicAID and less to nursing homes. Individuals eligible for MedicAID will certainly appreciate this but – Is this approach better and more economical for the state? The answer is – not necessarily nor does it improve care!

Stephen A. Moses, President Center for Long-Term Care Reform in Seattle, WA recently reported on HCBS in his newsletter. I want to share some of his insights:


Academics, policy makers, politicians and senior advocates have pushed the idea for decades that home and community-based care saves money and gives people who need LTC what they want.  Now finally comes research that shows no evidence that HCBS saves money or improves outcomes.


His newsletter also included some highlights, which are below: Another report has more information.


“Home- and community-based services (HCBS), initially touted as a cost-saving method of delivering long-term care compared to institutional settings, may not actually be a significantly superior setting in which to receive care, suggests a report from the Agency for Healthcare Research and Quality (AHRQ).  AHRQ reviewed several studies comparing different long-term care models and concluded there’s not enough evidence to truly assess their relative effectiveness in relation to each other. It may be more accurate to simply consider HCBS as a preferred model among consumers, rather than one that provides better care at a lower cost, the report’s authors say.”


Steve also provided me an important point about HCBS. There are very serious issues regarding quality in how it is provided and with elder abuse.  HCBS are much harder to monitor than care in nursing homes.

Have questions – call – John C Parker, RHU, LTCP – (860) 739-0005


When is a good time to buy Long Term Care insurance?


The answer – yesterday!

The cost to buy Long Term Care insurance does not go up each day a person puts off buying. However, the reason I answered yesterday was to emphasize premiums do go up each birthday. The premium, which will be charged, is based on your age the date you sign an application to enroll. For example, premiums are 33% higher at age 55 vs 50 and 60% higher at age 60 vs 55!  Another way to say this – premiums can triple from age 50 to 70. Thus, it is very important to take action today.

One of the biggest reasons for buying today is because a dollar spent on premium buys more the younger you are. How? If you wait until age 55, you would have to select a plan with an initial benefit pool of over $400,000 plus pay a higher age based premium, to achieve the same protection as a person who bought a plan with an initial benefit pool of $250,000 at 45. The very important 5% compound inflation option, which increases a person’s benefits each year, makes this special value possible.

The American Association of Long Term Care Insurance (AALTCI), a professional association I’m actively involved in, reports in their 2012 LTCi Sourcebook 55% of people who bought this important insurance in 2010 indicated the reason they did was because the cost to buy in the future would increase.

There are some other advantages to buying today related to – the lower the rates the younger you are:

  A good health discount of up to 20% may be available. The AALTCI 2012 LTCi Sourcebook reports 42% of people between 40 and 49 qualified for a good health discount. Between age 50 to 59 only 32% received a discount – for age 60 to 69 it dropped to 21% and for age 70 to 79 it was only 17%.

A higher chance of being accepted: If you wait to buy your ability to obtain this important kind of insurance protection may be lost because of a change in health, which resulted in not being insurable! The AALTCI 2012 LTCi Sourcebook reports 16% of people between age 50 and 59 were not able to qualify for this important protection because of health problems. Between age 60 to 69 – 24% of applicants did not qualify and between age 70 to 79 – 41% were declined.


The AALTCI has an informative video, about 5 minutes, on – When is a good time to buy Long Term Care insurance. It highlights good points about the importance of planning and things, which affect buying.

© John C Parker, RHU, LTCP – August 5, 2012

Voice – (860) 739-0005

Learn more about the value of this important kind of insurance –

A look at Care Giving and it’s impact in the workplace


The support and assistance “Care Givers” provide to an ever increasing portion of our population is significant and very important. Thus, this post is a step to:

● Help increase and improve understanding of some of the issues those providing this important assistance face.

● Highlight an effective way to not burden family members with this task.

● Emphasize there is an economical way to pay for this important assistance.

Let’s begin with a definition: A Care Giver is an individual who provides substantial assistance to a person not able to perform certain day to day life activities. This need may develop following an illness or accident, which could happen at any time, or later in life when some of a person’s “parts wore out”. This help, when required and needed on an on-going basis, is called long term care services and support. It includes providing assistance with day to day activities such as eating, dressing, bathing, toileting, or transferring from or to say a bed or chair. One very common reason for needing this special kind of help today is when a person is having trouble with mental ability such as with Alzheimer’s.

How common is the need for Care Giving? It’s very common. For example:

● When we stop and think – over 80% of us have a relative, or know someone, who is now or has received help.

● Facts tell us – by age 75, 70% or more of us will need help.

How much time does a Care Giver spend? This task often starts by providing a little assistance, say each day, and builds over time. A recent Working Mother Research Institute study found Care Givers helping individuals troubled with mental ability problems spend an average of 47 hours a week.

Paying for Care Givers. The most effective way for an individual’s family members to not face the physical, emotional, and financial burden, which comes with being a Care Giver, is to buy Long Term Care insurance. How so? When a person owns this special kind of insurance a pool of funds is created, which is then available to hire professional assistance when a health care professional indicates it’s required.

Having this special kind of financial protection insurance to pay for professional Care Givers means:

 ● Family members are free to manage the person’s assistance; care about them; plus help as they can.

● Children will not be faced with providing personal care to a parent, which is a very emotional and difficult task!

● The person’s savings and retirement funds for a spouse are protected from being used up.

● The person will be able to maintain as much independence as possible. A recent survey found people, especially those in a later life stage, are very concerned about being able to maintain independence. 64% were concerned about having to move out of their home. Note: Only 7% expressed being afraid of dying.

All of this emphasizes why Long Term Care insurance is the most effective and economical way to pay for professional Care Givers.

Lets now look at the workplace and Care Givers who are working. Some comments:

84% of employees who have a Care Giving responsibility for an aging parent or family member are frequently distracted during working hours coordinating or following up on assistance. This distraction has a large impact on productivity and is known as “presenteeism”.   

An AARP Public Policy Institute study reports Care Giving, while working, is a complicated and emotionally charged time. Some of the major changes in a person’s work situation include:

● 83% of employee Care Givers arrive late; leave early; or take time off during the day

● 41% have to take a leave of absence

● 37% having to change from full to part time

● 35% have to give up working

Some working Care Givers describe this as being torn between two jobs!


The Working Mother study provided additional details on the impact on employers:

● About 40% of Care Givers in the workplace said they passed up a promotion.

● Others reported having a sense of isolation and did not think they were doing their best on the job.

A Families and Work Institute study looked at the impact of Care Giving in the future and indicated:

● “49% of workers expect to care for an older family member or friend in the next five years.”


Bottom line: The most economical and effective way to have access to professional Care Givers and the valuable service they provide is by owning Long Term Care insurance. This need is growing rapidly and the impact it will have in the workplace and on employers is significant!


© John C. Parker, RHU, Long Term Care Professional, July, 18 2012

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