Alliance will provide one-stop access to the best senior living and long term care communities and funding options to help families pay for the costs

Life Care Funding Group and LivingSenior announced today the launch of a strategic partnership between the two companies.  The goal of the two companies is to provide education and access to seniors and their families about the best Senior Living and Long Term Care communities in the United States and tools to help families pay for the costs. 

FL, CT, and HI look to long term care benefit plans to offset Medicaid costs

Joining Connecticut and Florida, Hawaii is the latest state to pass a study bill establishing a task force and timeframe to examine the conversion of life insurance policies into Long Term Care Benefit Plans. With states facing enormous fiscal pressures and ballooning Medicaid budgets, they are all looking for private market solutions to help extend peoples’ ability to remain private pay in long term care for as long as possible. Millions of seniors will allow a life insurance policy to be abandoned because they do not understand their legal rights of ownership and the options available to them to use the policy for something other than a death benefit.  To read the entire article published on Producers E Source.com, click here.

In 2011, the state of Connecticut introduced study bill SB-1153, as “an act establishing a task force to study life insurance policy and annuity conversions and the provision of certain notifications by life insurance companies”. 

In 2012, the state of Florida passed HB 5001, to “establish a technical advisory workgroup by August 1, 2012, to examine methods to allow an insured under a life insurance policy or the contract holder of an annuity, to convert the policy or annuity to a long term care benefit".

In 2012, the state of Hawaii passed study bill, SB-2455 to “establish a task force to assess and make recommendations regarding the use of viatical settlements and accelerated death benefits as means of funding long-term care”.

In essence, the arguments for and against PPACA boil down to which side of one simple question you are on: Do the needs of the many outweigh those of the individual or do the rights of the individual outweigh the needs of the many?

The Supreme Court of the United States wrapped up three days of intense deliberation about the constitutionality of President Obama’s Affordable Care Act passed two years ago. Much of the debate centers around the mandate that individuals must purchase health insurance and that companies must make insurance available without exception.

Proponents say the individual mandate will make health insurance more affordable if everyone buys it. Opponents say the exact opposite will occur. Proponents say that for the good of everyone, we need as many people as possible covered by private insurance. Opponents say it is unconstitutional to mandate anyone purchases insurance against their will.

But one only needs look to car insurance mandates across the country requiring that the driver of a vehicle also be insured as an example of forcing people to buy insurance. In essence, the arguments boil down to which side of one simple question you are on: Do the needs of the many outweigh those of the individual or do the rights of the individual outweigh the needs of the many?

One of the opinions expressed during the SCOTUS deliberations is that we already have a safety net funded by everyone to cover those without insurance whenever someone who cannot afford to pay for health care walks into an emergency room. We also have Medicaid to cover the disabled, children, the indigent and seniors requiring long term care.

Unfortunately, Medicaid budgets in every state are at their limit and many are underwater. In 2011, the United States spent over $2 trillion on health care, and Medicaid covered over $420 billion in payments for long term care services. This massive growth in spending necessitated an 11.1 percent across the board cut by CMS for all long term care related expenses reimbursed by Medicare and Medicaid in 2012.

In the 21st century economic reality we now all live in, it is an unsustainable proposition that we can provide massive amounts of health care through the government and our tax payer dollars. Government subsidized health care is an important safety net for millions of people, but we are in the midst of a national re-set when it comes to how people will qualify for subsidized care.

More and more people are going to be pushed towards private pay in health care and long term care, and although there will be plenty of screaming and shouting, the shift is already underway.

Whether it is a person who relies on the emergency room to receive health care or a person who spends down their assets to qualify for Medicaid to cover their long term care costs, they are limiting their choices and options to receive the best possible care, in the best possible environments and in the best possible timeframes.

Private insurance for health care and long term care provides more choice and better quality of care for the individual than government/tax payer subsidized care. Use of resources such as employer based or individually purchased health insurance, long term care insurance, and conversion of life insurance policies into long term care assurance benefit accounts, are private market solutions that are in the best interest of the individual as well as in the best interest of the many.

Regardless of the SCOTUS decision scheduled to be issued in June, this is a debate that is more at the beginning than the end.

This article by Chris Orestis originally ran on www.ProducersWeb.com

Too often seniors who have owned a life insurance policy for many years, which is about to lapse or be surrendered for minimal value, will have contacted their life insurance company to ask about their options.  The life insurance company will inform them that they really only have two options if they don’t pay their premium: surrender the policy for its cash value (if it has any) or let it lapse.  Most people that receive a lapse notice have no cash value because it has already been drained by the carrier to cover any unpaid premium payments.  That typically leaves the final option of “pay or go away”.  The number of seniors that allow this to happen to a policy after paying premiums, sometimes for decades, is scandalously high. 

Fast Fact: A policy can be converted to a private market long term care benefit account locking up the funds to only be spent on long term care services with the funds being issued monthly by a benefit administrator to the provider of long term care.

On November 19, 2010, during testimony at NCOIL’s annual meeting to consider passing the Consumer Disclosure Model Law, Life Care Funding Group offered the following observation:

“The intersection of a growing senior and Baby Boomer population and economic bust is creating a crisis for how seniors will fund their retirements and eventually long term care expenses.  Our case workers hear from seniors and their families every day who have been paying premiums for years and are getting ready to abandon their policy.  These are middle class Americans without insurance expertise and the typical size of their policy is well under $500,000.  This disclosure law will help consumers understand they have a number of options to consider before discarding a policy, including converting their policy into a long term care benefit plan that holds the potential to address their financial shortfalls.”

Families with the need to pay for long term care that are unable or unwilling to keep their life insurance policy in-force by maintaining premium payments, or are planning to abandon as part of a Medicaid spend down regimen, the Assurance Benefit conversion option is a much better choice.

To read more, click here 

Worker confidence in having enough money to pay for long-term care (LTC) expenses in retirement seems to be rising and falling along with the overall health of the economy.

The U.S. economy seemed a little stronger in 2011 than in 2010, and a little weaker earlier this year than around the same time last year. LTC confidence levels have been moving roughly in sync with overall economic confidence levels.

The survey team polled 1,262 U.S. adults over the telephone in January. The sample included 1,003 workers and 259 retirees. All participants were ages 25 and older.

Only 9% of the workers surveyed said they were very confident that they would have enough money to pay for LTC expenses in retirement. The percentage was unchanged from last year, and the level of firm LTC funding confidence is at the lowest level that it has been since 1998.

To read more, click here

Issue Brief

The United States Supreme Court codified as law the legal right of property ownership for life insurance policies in 1911.  The owner of a policy has the legally protected right to convert their asset from a life insurance policy into a long care benefit plan by accessing the private, secondary market.  There is almost $30 trillion of in-force life insurance today in the United States.  Comparatively, there is less than $10 trillion of home equity today in the United States and the amount of in-force long term care insurance is only in the billions.  At a time when LTCi sales should have been exploding, the market instead has been suffering from significant disruption with rate increases on existing policies and major carriers such as MetLife ceasing to sell policies.  Additionally, the economy’s impact on the housing market has seriously dampened the ability of seniors to access home equity to pay for long term care which for years was the primary source to fund long term care, and part of a Medicaid spend down regimen, but that has not been the case since 2008.  As for owners of life insurance; the middle class, “small face” policy owner with under $500,000 of death benefit cannot access the life settlement market as an option either. 

With 10,000 Baby Boomers turning 65 every day, the United States has officially reached the “long term care funding crisis” era.  New approaches to fund long term care must be encouraged, and converting life insurance policies is an option quickly gaining ground.  Unfortunately, owners of life insurance policies are not aware of their legal rights and options and millions of seniors are stranded with polices that have outlived their insurable interest, they can no longer afford, and are counted against them as a dis-qualifying asset for Medicaid eligibility.  But, legislative leaders across the country are taking action with consumer protection disclosure laws and legislation to encourage consumers to convert their life insurance to pay for long term care as an alternative to abandoning their policies.

Life insurance is an unqualified asset for Medicaid eligibility, and billions worth of policies are regularly abandoned by uninformed seniors as they enter their “long term care years”.  Converting a life insurance policy into a long term care “Assurance Benefit” plan is a Medicaid qualified spend down of the policy, and it extends the time a person remains “private pay” before going onto Medicaid.  States are under tremendous budget pressure to keep pace with exploding demand to cover long term care needs with tax payer money, and they are quickly realizing the savings that can be found for their beleaguered budgets by delaying entry onto Medicaid through the use of Medicaid qualified policy conversions.

Center for Economic Forecasting and Analysis (CEFA) estimates annual savings from policy conversions over $150 million to Florida Medicaid and Tax Payers

Since the National Conference of Insurance Legislators (NCOIL) unanimously passed the Life Insurance Consumer Disclosure Model Law in 2010, states all across the country have been looking at the cost savings impact on stressed Medicaid budgets by converting life insurance policies into long term care benefit plans.  The policy conversion option was one of the consumer protection disclosure requirements included in NCOIL’s model law, and the nursing home and assisted living industries have been quick to adopt this funding option to help beleaguered families struggling with the costs of long term care across the United States.  Life Insurance is an unqualified asset for Medicaid eligibility and it has been standard practice to lapse or surrender a policy as part of a Medicaid spend down plan.  With billions in face value being abandoned, NCOIL and state law makers have come to realize that a better option for seniors, the long term care industry, and tax payers would be to convert these policies instead.