The Benefits of Life Care Funding
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by Chris Orestis
12/19/2011
Alyssa Gerace, Senior Housing News, December 18,
2011
According to a study by Avalere Health found that the 11.1 percent Medicare
funding cut to nursing homes that went into effect on October 1 will ultimately
reduce funding by $79 billion over the next 10 years. Alliance for Quality
Nursing Home president Alan Rosenbloom says that if the cuts were phased in
over a 3 year period, the impact would not be as drastic. “A gradual phase-in
of the federal regulation—which has been done in the past for other provider sectors—can
help alleviate a worsening direct care staff layoff crisis that is now a
documented fact in Ohio,” said Rosenbloom in a statement. “We respectfully urge
Congress to pursue a phase-in of the regulation, and we would be pleased to
work with lawmakers to help achieve this logical, fair and responsible policy
recourse before Congress adjourns for the year.” An Avalere Health survey also
found that nursing homes across the nation plan to lay off a total of
approximately 20,000 workers as a result of the cuts.
To read entire article, click here
by Chris Orestis
12/8/2011
Long term health care insurance has not been
a profitable product for most insurance companies in the last decade. Many
insurance companies found themselves paying out more than was expected to
customers due to rising health care costs, including pharmaceutical cost
increases. The number of customers buying long term health care policies in the
last decade has declined considerably due to many factors, including the
downturn in the economy. In the U.S., only a small percentage of people are
insured for long term health care insurance, and currently this number is
roughly 8 million.
After so many losses suffered by the
insurance companies this past decade, many companies are reluctant to offer
this type of long term insurance realizing it may not be a product they wish to
promote. After the economic crisis of 2008, the severe weather damage payouts
to homeowners businesses and a general reluctance of the public to pay for
insurance that is not absolutely necessary at the moment makes this kind of
insurance less attractive. Long term health care insurance coverage has become
rather risky for many insurers, including some of the largest companies in the
country.
The financial
projections of most insurance companies have carried a profit margin that
included the aging of the baby boomer population, which should have made long
term health care insurance one of the most sought after insurance products for
this aging group. Contrary to the speculation of the most successful insurance
administrators, seniors, despite their age related health issues, have been hit
hard by the economic down turn and are unwilling to spend the monies required
to fund long term health care options offered by the major health care
insurers.
For most insurance companies, the long term
health care policies are expensive for them to sell, with a risky rate of
return.
The current financial atmosphere makes most
companies eager to drop their older policies which are coming due for return at
the companies’ financial losses; a scenario that was not anticipated by the
insurance companies.
Another problem for insurance companies was
how to price the product. After selling long term care that was held onto for
longer than the companies budgeted for, they are reluctant to issue new long
term health care policies in this economic environment.
The majority of sales for long term health
care insurance have fallen over 20% in just the last five years. Some say it is
the cost of the premiums which have risen as much as 40%. For some companies, a
price increase this large has meant that some of the biggest insurance
companies in the U.S. are discontinuing this product. Most consumers are not
only unwilling but unable to pay these steep price increases. Most insurance
companies attribute their increase in premiums to their policy holders living
longer. Health care costs will only continue to rise. With customers living
longer, their policies might include a more expensive future pay out making
these products a poor choice for most insurance companies.
Author Bio:
Megan writes for Assisted
Living Today, a leading source of information on a range of topics related to New
York Assisted Living.
by Chris Orestis
12/6/2011
KIRKLAND, WA, November 21, 2011 (SEND2PRESS NEWSWIRE) This month the 3in4
Association added 6 new members to its advisory board, and got new support from
two insurance carriers: John Hancock and Genworth Financial. “We’re
gaining momentum,” says Mark Goldberg, Treasurer of the association that runs
the “3 in 4 Need More” campaign.
The
goal of the campaign is to warn Americans about a looming problem. “The
majority will be affected at some point by long-term care needs of themselves
or a close family member,” says Goldberg. “Yet few are prepared for this.” The
campaign is letting them know so they can avoid a financial and personal
crisis. “Our new board members and the new carrier support will add to our
ability to do this.”
The
new carrier support includes –
·
A study sponsored by Genworth
Financial. Released earlier this
month, the study found that most adults believe that long-term care insurance
should be purchased between the ages of 45-64, yet 82 percent of this age group
have not purchased a policy. The study also found that since the 2008 financial
crisis, only 20 percent of adults have taken any action on their financial
strategy.
·
Marketing support by John Hancock. The company applied the
“3in4” logo to education materials supplied to its network of LTC agents.
The
3in4 Association’s advisory board has been expanded from 14 to 20. The six new
members are –
· Chris Orestis, Co-Founder and President, Life Care
Funding Group
· Joseph Pulitano, President, Advanced Resources
Marketing
· Bill Herring, President, Online Insurance Services,
LLC
· Steve Dozier, President, AIMS Benefit Solutions
· Mark Leighton, Chief Marketing Officer, Connect
America
· Carol Gardner, President of LifeStyle Insurance
Services
To
take advantage of the “3 in 4 Need More” campaign, LTC agencies, brokers,
agents, and advisors may use a number of resources found at http://www.3in4needmore.com.
About the 3in4 Association:
The 3 in 4 Need More campaign is dedicated to raising awareness of the
importance of long-term care planning. The campaign utilizes multiple marketing
strategies to increase awareness. The 3 in 4 Need More campaign is a public
service of the 3in4 Association, which operates as a nonprofit 501(C)(6)
corporation. Members of the campaign cross all industries, genders and ages.
The campaign supports an online platform located at www.3in4needmore.com. This
resource supports consumer plan development, and products and services that
should be considered in long-term care planning. The platform also provides
awareness support for long-term care planning specialists.
www.3in4needmore.com
Click HERE to see a
overview of our national tour & $50,000 contest
by Chris Orestis
11/2/2011
Long term care funding options with Chris Orestis, Click Here for VIDEO
By Paul Wilson, ProducersWEB
I recently sat down with Chris Orestis, a 15 year veteran of both the insurance and long term care industries. Chris spent several years representing the health and life insurance industry as Vice President and Senior Vice President respectively for the Health Insurance Association of America (HIAA) and the American Council of Life Insurers (ACLI). He is an expert on insurance and long term care issues, and is a frequent speaker, featured columnist and contributing editor to a number of industry publications.
His company, Life Care Funding Group, assists people in need of funds to cover the costs of senior housing and long term care. LCFG specializes in converting the death benefit of an in-force life insurance policy into a long term care benefit to cover the costs of skilled nursing home care, assisted living, home health care and hospice.
In the first part of the interview, Chris talks about the current state of the long term care insurance industry. He also discusses the "wake-up call" facing producers and carriers and details some of the challenges, opportunities and responsibilities resulting from the current economic climate. He goes on to explain his recent involvement in the passage of the National Conference of Insurance Legislator's (NCOIL) Life Insurance Consumer Disclosure Model Law, which ensures policy owners "will be informed that they have a number of options to consider first that could make a significant difference in their lives, and at a time when they need it most.”
In the second part of the video, Chris provides further detail about the NCOIL Model Law and its effects on the industry, and talks about his company's partnerships with assisted living communities and nursing homes to help clients convert their life insurance policies into long term care benefit plans. Finally, he looks into his crystal ball and gives his best guess as to the future of the life insurance industry, LTCI industry and disability insurance.
by Chris Orestis
10/12/2011
National Underwriter
By Allison Bell
Skilled nursing facilities will depend on private-pay patients more than before now that a regulation cutting Medicare skilled nursing care funding has taken effect.
The Alliance for Quality Nursing Home Care (AQNHC), Washington, a coalition of groups that represent nursing homes and rehabilitation centers, has been mounting a media campaign to try to draw attention to the impact the cuts have had on member facilities.
The Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services (HHS), imposed about $4 billion in cuts on skilled nursing facility payments – or about 11 percent of total anticipated “Reimbursement Utilization Group Protocols” spending – for the fiscal year that started Oct. 1.
CMS said they cuts are necessary because skilled nursing facilities responded to payment changes that were supposed to reduce spending on care in the facilities by submitting more bills for high-cost care and driving up total claims costs.
Although Medicare does not pay for true long-term care, it does cover the cost of much of the skilled nursing care patients receive between the time they leave the hospital for care for acute conditions, such as strokes or heart attacks, and the time when they return home.
The CMS cuts will have no direct effect on the long-term care nursing homes provide, but many nursing homes that provide long-term care also provide transitional skilled nursing care, to help patients, increase overall revenue, and bring in transitional patients who, in some cases, turn out to be sicker than expected and end up needing long-term care.
Meanwhile, the congressional Joint Select Committee on Deficit Reduction – the 12-member “Super Committee” -- is racing to come up with $1.2 trillion in deficit reduction proposals by Thanksgiving, and that committee could call for further cuts both in Medicare skilled nursing care reimbursement spending and Medicaid long-term care spending, according to Contemporary Healthcare Capital L.L.C., Shrewsbury, N.J., a company that specializes in health care facility finance.
The groups in AQNHC estimate their members have been employing about 1.7 million people in the United States and generating about $200 billion in total U.S. economic activity.
Avalere Health L.L.C., Washington, a health policy firm, has estimated the reimbursement change that took effect Oct. 1 led to a $484 million reduction in Medicare spending in California, the hardest-hit state, and a $448 million reduction in Florida, the second-hardest-hit state, according to AQNHC.
Meanwhile, states are cutting their spending on facility care, AQNHC said.
In Florida, for example, the state has cut state nursing home Medicaid reimbursements 6.5 percent, AQNHC said.
AQNHC said the funding cuts are already starting to lead to nursing home staff layoffs.
Additional cuts “would hurt Florida seniors, and undermine facilities’ ability to admit, treat and return to home a rapidly increasing number of patients requiring intensive post-acute rehabilitation and care for multiple chronic illnesses,” AQNHC President Alan Rosenbloom said in a statement.
AQNHC is making the case against further cuts in a wave of press releases distributed through PR Newswire.
Douglas Korey, a managing director at Contemporary Healthcare Capital, is arguing that, although the cuts are significant, investors and others may be exaggerating the extent of the damage done.
Even after the cuts, overall spending on skilled facility care will be about 3 percent than it was before CMS made the payment system changes that ended up triggering the new changes.
There are still opportunities in the market for nimble, midsize facility operators that run from 5 to 25 facilities, Korey said in an analysis of the changes.
Originally published by National Underwriter Life and Health
by Chris Orestis
8/28/2011
By Harris Meyer
When her 86-year-old mother, a retired nurse with Alzheimer’s disease, started wandering away from her Tallahassee, Fla., home in 2007, LuMarie Polivka-West knew it was time to move her and her 94-year-old father into an assisted-living facility.
But because of the collapse in the real estate market, she couldn’t quickly sell her parents’ house to pay for a $3,200-per-month assisted-living apartment. So, for another year, while waiting for the house to sell, Polivka-West and her two brothers each contributed $600 a month to help their parents afford the assisted-living unit. "It was a significant cost to me and my brothers," says Polivka-West, the senior director of policy at the Florida Health Care Association, a nursing home trade group. As for her parents, "It didn’t cause them anxiety, just us," she says. "We didn’t let them know."
In the fourth year of a depressed real estate market, experts say thousands of seniors remain unable to move into senior housing because they can’t sell their homes quickly enough or for the price they need. The upshot: Greater pressure on families to pay for parents’ and grandparents’ placements, or to care for them themselves.
Taylor recalls a woman who was on the verge of moving her elderly father, who had Parkinson’s disease, into an independent-living apartment. The Arizona Baptist facility in Phoenix had services to help him with mobility and daily activities. But then her parents decided they would both move into a regular apartment with no services, which cost 40 percent less, because they had sold their home for significantly less than they had anticipated. The daughter told Taylor she was sick with worry about her parents living on their own in that apartment.
In Florida alone, Polivka-West estimates there are 400,000 seniors with dementia living on their own at home, with few or no services. "The U.S. has a large aging population and we do not have a long-term care plan for this country," she frets.
The housing slump also is affecting seniors who own a home and need to move into a nursing home. That’s because states require single seniors to exhaust nearly all their assets, including their home equity, to qualify for Medicaid. That federal-state program for the poor and disabled pays for many people's long-term nursing home care.
To read entire article from Kaiser Health News, click here.
by Chris Orestis
8/18/2011
By Richard Scott
News of a novel benefit program at one of the largest senior care providers in the nation should come across as a big event for those involved in providing care for seniors. The benefit program takes a life insurance policy and converts it into real cost payments for a number of senior living options.
The provider of the benefit program is Brookdale Senior Living, which developed the conversion policy with Lifecare Funding Group. The hope behind the so-called Life Care Assurance Benefit Plan, which is now available at Brookdale’s 550-plus communities, is that it provides an alternative method of paying for care needs at a time when the budgets of many families are stretched thin. The original benefit program debuted in the fall of last year.
“The current economic conditions have compounded the problems some families face when it comes to paying for the costs of senior living or long-term care,” said Ron Aylor, a senior vice president with Brookdale. “Most people do not realize that a life insurance policy is an asset that they are legally entitled to convert into another form of coverage.”
The Assurance Benefit is different from long-term care insurance. According to Life Care Funding Group, there are no wait periods with the new benefit program, nor are there costs to apply or premium payments. The policy owner can convert an “in-force” life insurance policy to enroll in the benefit plan.
The terms of the benefit stipulate that payments are made directly to the care provider or community, that the partial death benefit is preserved, and that the list of qualifying services includes skilled nursing, assisted living, home health and hospice.
“The Life Care Assurance Benefit Plan gives people a quick and simple option to convert a life insurance policy’s death benefit into a life care benefit and immediately apply it,” said Aylor.
Across 34 states, Brookdale operates independent living facilities, assisted living facilities, dementia care communities and continuing care retirement communities.
by Chris Orestis
7/26/2011
CHICAGO, July 21, 2011 /PRNewswire/ -- Two out of three (67 percent) of America's middle-income Boomers expect that their retirement experience will be drastically different from that of their parents, according to a recent study released by the Bankers Life and Casualty Company Center for a Secure Retirement(SM) (CSR).
The study, Middle-Income Boomers, Financial Security and the New Retirement, which focused on 500 middle-income Americans between ages 47 and 65 with income between $25,000 and $75,000, found that the pensions and guaranteed income are what the majority (60 percent) of middle-income Baby Boomers envy most about the retirement of previous generations.
The ideas of being taken care of by family members, slowing down and moving to a retirement community, (activities commonly associated with the retirement of previous generations) are being replaced by keeping up with technology (77 percent), working (78 percent) and staying physically fit (81 percent).
The CSR's study reveals, nearly one in three (31 percent) Boomers anticipate having to financially support at least one adult person during retirement and 15 percent expect that person will be an adult child or children, rather than an elderly parent (only 9 percent).
There are several factors contributing to this change in retirement outlook. According to the study, retirement risk has been shifted from employers and the government to individuals with the demise of corporate pension plans in favor of 401(k) plans, discontinuation of many employer-paid retiree health benefits and the future of Social Security and Medicare.
Today, just over half (56 percent) of middle-income Boomers work for an employer that offers a retirement savings plan. This is less than the national average for all workers (72 percent). And of those who contribute to a retirement plan at work, one in four (24 percent) do not receive a match from their employer.
The report also cites one in seven have no pension or retirement accounts at all and 55 percent of middle-income Boomers have saved less than $100,000.
"The retirement of the Baby Boom generation will not only test the limits of government programs such as Medicare and Social Security, but also help shape the definition of retirement itself," said Scott Perry , president of Bankers Life and Casualty Company, a national life and health insurer. "Boomers may have to take more personal responsibility for their retirement financial security than was the case of their parents' generation and plan for the risks that may jeopardize this security, like long-term care, inflation and outliving their money."
For a copy of the complete report, click here.
by Chris Orestis
7/19/2011
The White House and Republican leaders from Congress are currently engaged in a contentious negotiation over a balanced budget and how to rein in the massive debt our nation has incurred. The ability of Medicare and Medicaid to meet the demands for long-term care is being greatly challenged and reforms are inevitable. But one area that is receiving more emphasis is private-pay options to cover the costs of long-term care.
Earlier this year, the two largest assisted-living companies in the United States made separate announcements that they would begin offering families the option to convert existing life insurance policies to long-term care plans by working with Life Care Funding Group. Emeritus Senior Living and Brookdale Senior Living, both publicly traded on the NYSE, are using what is termed an “Assurance Benefit” so families can exchange a life insurance policy in order to be enrolled in a long-term care benefit plan that will pay a monthly amount directly to any of their facilities over a pre-determined benefit period. Life Care Funding Group has been working with the long-term care industry since 2007 and currently offers the Assurance Benefit to approximately 4,000 senior care properties across the country.
“Recently we heard from a family with a $95,000 life insurance policy entering its grace period. Their mother was in the process of making the move into long-term care and they could not afford the monthly expenses, said Chris Orestis, CEO of Life Care Funding Group. "They called their insurance company to ask what they could do with their policy and they were told their only option was to pay the premium or let it lapse. Then they contacted Life Care Funding and we converted the policy into a long-term care benefit plan that is now covering the costs of care and will keep her off of Medicaid for at least two years.”
To read the entire article on Producers ESource, click here.
by Chris Orestis
7/16/2011
The rancorous debate in Washington over whether to raise the federal debt ceiling is alarming many of the nation’s governors from both parties, who fear that whatever the outcome, much-needed money will almost certainly be drained from their states.
If the federal debt limit is not raised, several governors said as they gathered here on Friday for the semiannual meeting of the National Governors Association, the ensuing default will harm the economy, make it difficult for states to borrow money and delay some of the vital federal payments that states count on for everything from Medicaid to unemployment benefits.
Now states, already struggling to pay for Medicaid for the many people who lost their jobs and health care in the downturn, face the prospect of less federal money for it. Governors in both parties said they were most worried by talk that both President Obama and Congressional Republicans wanted to cut Medicaid payments to the states by $100 billion over the next decade.
To read entire article from the New York Times, click here
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