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A PRACTICAL GUIDE TO THE COMPLICATED ISSUE OF LONG-TERM CARE INSURANCE
"Next to buying the right long-term care insurance, buying and reading J.K. Lasser's Choosing the Right Long-Term Care Insurance is the best investment seniors and their families can make to help insure independence and dignity in their golden years."
-Scott Harshbarger, President and CEO, Common Cause
"An indispensable book for all those concerned that the cost of health care will rob their old age of dignity and independence. The author, Ben Lipson, an articulate advocate of patient rights and an authority on health insurance, provides a lucid road map in a terrain mined with hokum."
-Bernard Lown, MD, winner of the Nobel Peace Prize
"Long-term care insurance is a much-needed and valuable insurance concept, marketed in a maze filled with smoke and mirrors. Most of what passes for consumer guidance is just general information and superficial advice. But Ben Lipson's book takes you by the hand, leads you through the insurance labyrinth, and shines a much-needed light on the product."
-Charlie Sabatino, President, National Academy of Elder Law Attorneys
Critical coverage will help you:
• Decide whether you are among the 40 percent of people who do not need to buy long-term care insurance
• Receive the benefits you purchased when you have to make a claim
• Distinguish between fact and fiction during a sales pitch
J.K. LasserPractical Guides for All Your Financial Needs
Please visit our Web site at www.jklasser.com
|Series:||J.K. Lasser--Practical Guides for All Your Financial Needs Series|
|Product dimensions:||6.10(w) x 9.20(h) x 0.80(d)|
About the Author
BENJAMIN LIPSON has been a consumer advocate and newspaper columnist for more than two decades. Known for his work on patient rights, senior health care issues, and long-term care insurance, he has written more than 500 articles for the Boston Globe. Lipson has been actively involved in the insurance industry for fifty years. He is the founder and President of Just for Seniors Insurance, Inc., Chestnut Hill, Massachusetts, and edits the Just for Seniors newsletter.
Read an Excerpt
J.K. Lasser's Choosing the Right Long-Term Care Insurance
By Benjamin Lipson
John Wiley & SonsISBN: 0-471-15205-6
Chapter OneIndependence for All
This book is not intended to scare you. On the contrary, when you've finished reading you will be equipped to make wise choices about the long-term care you want. You'll understand where long-term care coverage stands in your financial planning universe, how taxes impact your decisions, which type of policy might be best for you, what secrets lie buried inside your policy, and how to deflect an emotional sales pitch. You'll know what to expect if you have preexisting conditions that might disqualify you from coverage, and you'll understand the implications behind the dreaded cognitive impairment test. You will have a hard-hitting list of questions for yourself and your insurance agent, along with a set of guidelines to follow as you make your long-term care planning choices.
This book, then, is based on four assumptions, which have been the basis of my 50-year career as an advocate for patients' rights and senior health insurance concerns:
1. We recognize that government dollars for health and long-term care are shrinking. We know, without being constantly reminded by the insurance industry, that our long-term care costs might impoverish us.
2. We expect to plan carefully for our futures, whether we're just out of college or just into retirement.
3. We are educated consumers, already expertat reading computer specifications, comparing colleges, and analyzing mortgage rates. We know how to read the fine print and are not impressed with bells and whistles designed to confuse us.
4. The most important goal for our very old age is to preserve our priceless independence and dignity.
Many of us are unsettled by the thought of aging, but life rewards the forward thinker. Long-term care planning effectively starts on the first rung of the career ladder, often as a benefit of employment. In midlife it becomes intergenerational, as adult children worry about advising their parents and assessing their own options. In later years, long-term care considerations become a foundation of preretirement financial planning, and the cornerstone of a senior citizen's well-being.
This book offers you, your parents, your children, and your advisers the tools to make rational and prudent decisions about long-term care options. It will steer you away from a prescription for long-term pain and suffering and lead you toward the preservation of your most valued assets, dignity and independence.
Those Misleading Statistics
The insurance industry has taken its time recognizing the intelligence of its customers. One promotional brochure now stresses that the company's goal is to "help you maintain your independence." Another offers "facts that can help you understand the risks associated with long-term care and our solutions for helping you maintain your personal and financial independence should you need long-term care." But often these promises about "independence," whether by design or not, tend to be misleading. The insurance brochures are not promising to keep you out of a nursing home. Rather, the brochures are careful not to offend the nursing home industry, which itself wants people to buy long-term care coverage. This way, when they are admitted to a home as private pay or insured residents, they will be subjected to a higher room rate than those supported only by Medicaid.
If you are over 60, chances are that you have been repeatedly bombarded with lunch and seminar invitations from insurance agents selling long-term care policies. If you're under 60, your dinner is frequently interrupted by phone calls with the same appeal. Despite their apparent interest in helping you maintain your independence, these insurance agents are intent on letting you know what you can expect in your old age: inevitable impoverishment.
It's enough to make you lose your appetite.
The pitch goes this way: Don't worry about fire insurance; your risk of making a claim on your homeowner's insurance is 1 in 88. A car accident? Overall, your probability for a car accident is about 1 in 47, which is why you bought an automobile liability and collision insurance policy when you purchased your first car.
Take a deep breath, says the insurance agent, and listen to these much more ominous predictions and statistics about your old age. If you make it past 50, you have a one in five probability of eventually needing long-term care. If you reach 65, your chances of spending time in a nursing home increase to 43 percent. Make it past 80, and you have a one in two chance of joining your remaining friends and neighbors in a long-term care facility.
This frightening pitch became so troubling for the executive director of a large trade association that he wrote to the CEO of the insurance company. Long-term care coverage was meant to be an attractive perk of membership, said the director, but the agents who were presenting the plan during home visits were scaring the members right out of the association. Why should the insurance company salespeople be the agents of such woe? Who anointed them the bearers of such bad tidings? Why would anyone want to hear that because of the high "statistical probability of ending up in a nursing home" they could expect to see their "life savings wiped out" and their caretakers debilitated?
What did the CEO say? Granted, these dinner-hour visits may not be pleasant, but such predictions are necessary to explain the risks of aging.
The executive director explained to the CEO that such "scare tactics" insulted the intelligence of the association's membership, already accustomed to prudent, thoughtful decision making. The executive director had lost his appetite along with his members.
Long-Term Care Insurance Meets the ER
My neighbor, Jane, called me one day from the local emergency room. Her father had fallen, and Jane might be facing another care crisis. Jane was an only child; since her mother's death she had been responsible for her father. Above all, she did not want him to be forced to go into a nursing home prematurely.
Her father had worked hard all his life as a laborer, and her mother had cleaned houses. They had lived from paycheck to paycheck, scrimping to send Jane to college and to drop the remaining dollar on the collection plate each Sunday. Jane wanted her father to live his last years at home, with dignity and independence.
For three years, Jane had been the personal assistant to the regional manager of a home furniture chain. Jane's boss was very sympathetic to her role as a multitasking caretaker, allowing her to leave work to tend to her father's emergencies, take her kids to soccer practice, attend their dental appointments, and confer with their teachers. In turn, Jane was very conscientious about her job, coming in early and often skipping lunch hours to make up for the hours she had to take for her personal commitments.
Katie, the boss, understood Jane's situation because she had been there. Years earlier, Katie herself had been forced by the demands of her job to move her own mother, who previously lived alone, to a nursing home. The nursing home placement felt premature, but Katie had no choice. Her job required that she travel her region regularly, and she was on track for an executive position in the home office.
The day Jane called me, her father had slipped, fallen, and cut his head. He was dizzy and bleeding. Jane was swamped at work; the annual reviews for the store managers were due. She couldn't leave immediately to attend to her father so she told him to call 911. She would meet him at the hospital in an hour.
Rush hour traffic slowed her further, and she arrived to find that her father had been seen by the triage nurse. Now he was sitting in the ER waiting room, expecting to be called for an X ray. He had been waiting alone for an hour and a half, and the ER secretary warned Jane that the X ray department was so backed up that she might as well pick up a hamburger since they would be sitting for another two hours.
Jane was frustrated, but she was also relieved. When she called me, she said, "I'm lucky this time. They think Dad is okay, and nothing seems to be broken. I guess the X ray is a precaution. But what if he slips again? I'm afraid that Dad is going to need round-the-clock care fairly soon. I'm worried that he'll fall out of bed, or get lost and disoriented in the neighborhood. I don't even know how I'll manage to help him dress in the morning or get to the toilet."
She paused, then said, "What am I going to say to my mother when I visit her grave? I promised to take care of Dad."
For Jane, payback time had come. She wanted desperately to help her father live the rest of his life as he deserved to, in his own home and surrounded by familiar cronies. But Jane simply didn't have the money. Besides, her husband, who had been patient about the time Jane gave to Dad, gently pointed out that she was spending hours away from her kids. The boy was already in middle school; he needed his parents at home in the evenings to help with his homework. Her husband also asked where they would find the extra money to pay for a caregiver for Dad. They would be looking at colleges for the kids in three years.
What a painful double bind! Her father was a proud man who did not want to go on what he called the "public dole." Dad and Mom had never accepted charity, and Dad had proudly resisted spending down his assets to qualify for Medicaid nursing home coverage. He did not qualify for admission to a VA hospital, either. For the time being, Jane could help her dad manage his costs. Together they could probably cover 90 days of home care. They might even be able to squeeze out another few months of paying for a nighttime companion, in case he fell out of bed. After that, Dad would have to spend the money he had left. He would end up in a nursing home paid for by Medicaid. He didn't need that level of care, but there was no alternative to the premature placement.
"I suppose it's too late to buy long-term care insurance for him," she said to me.
It was, and too bad. The $4,000 premium per year for long-term care coverage now looked like a bargain.
As worried as she was, Jane realized that her situation was not as bad as it could be. When she had started working for Katie, she had signed up for the company's long-term care coverage plan. "I'm starting to realize that my company-paid long-term care insurance policy is the best fringe benefit I have!"
Protecting the Independent Senior
My job is to plan for catastrophe, yet Jane's story was an echo of my own. My mother, a fiercely independent and proud woman, worked until she was 86 years old; but after she was forced into a nursing home at age 93, she died within weeks. Ethel enjoyed a long life. Its end was certainly not a direct result of the loss of independence and personal dignity she experienced in the nursing home. But if I had helped her plan for her very old age, she might have spent her last months surrounded by neighbors and friends, instead of professional caretakers.
Ethel knew what she was worth. She returned to Filene's department store, the employer of her teen years, when she was widowed at 59. She broke sales records, but the store's management retired her when she was 67. Not ready for television and afternoon bridge, Ethel applied to Lord & Taylor. "Ma," I warned her, "you're wasting your time. You're going to be demeaned and then rejected by some kid who could be your grandchild."
Ethel was undeterred. "Ben, I'm not going to listen to you. I'm going to have my hair done, and I am going to apply for the job."
My mother sold handbags at Lord & Taylor until she was 86, never missing a day. Or wasting a dollar. When, on a steamy August day, I sent a prepaid taxi to bring her home, she expressed her disapproval to the driver. "You tell my son not to waste his money." Her work ethic as well as her life ethic prescribed independence coupled with frugality.
Ethel had her first extended experience with nursing care after abdominal surgery at age 86. We negotiated with her: "Please, Ma, promise to stay just one week in the recuperative care center, and then we'll get you back to your own place." Convinced that recuperative care was a one-way ticket to the nursing home, Ethel outsmarted us. Against medical advice, despite jeopardizing her Medicare coverage, she called an ambulance and left the care center after staying one night. The center's social worker officially scolded her, but privately admitted that the entire staff stood "behind the plants and cheered her as she climbed into the ambulance."
My mother maintained that freedom until she was 93. In many respects, she was lucky. She stayed in her own apartment. Her neighbors loved her homemade cookies, showering her in return with flowers, candy, and Mother's Day gifts. She refused to consider long-term care, even when we suggested a live-in companion. "Let me understand this," Ethel said with disdain. "You want to have someone come to live here, watch my television, eat my food, and still pay her?" Pointing her finger at me, she cried: "Shame on you!"
I didn't feel shame, but I certainly felt guilt when she finally moved to a nursing home. The placement was a good one, but no nursing home has the staff to provide sensitive care 24 hours a day, seven days a week. Inevitably, patients are at risk, left occasionally untended, sometimes unsupervised, and always deteriorating. My mother's worst fears came true. She lost her independence, her dignity, her privacy, her days in the warm sun, and, worst of all, her contact with the world outside the home. From the first minute of her confinement, my mother and I each mourned her loss.
Despite struggling with the pain of losing two of my three daughters, the end of my mother's life is still one of my saddest memories. I feel guilty that although I am an expert in insurance, I did not do more to explore ways to keep her at home until she died.
Pledging Your Bottom Dollar
Long-term care options have come a long way since the 1950s, when people were often forced to promise all their assets in exchange for a nursing home bed. My mother was frugal. Her independence was the sticking point, not the nursing home costs. But in the 1960s my client Ted watched his grandfather have to pledge his house for collateral for a room at the "old folks' home."
Ted's grandfather lived with his son and daughter-in-law for 25 years, but then the "kids" began to have health problems of their own. Struggling with arthritis and diabetes, they couldn't physically manage Grandpa's needs. If they overslept, he was trapped in bed for hours. If they had doctor's appointments of their own, they needed an adult baby-sitter. Feeling abandoned and bitter, Grandpa was moved from the family home.
Excerpted from J.K. Lasser's Choosing the Right Long-Term Care Insurance by Benjamin Lipson Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Foreword by Dr. Yung-Ping Chen.
1. Independence for All.
2. Alternatives to Long-Term Care Insurance: Doing It Your Way.
3. Reading the Fine Print: How to Buy the Coverage You Want with the Dollars You Have.
4. Current Tax Considerations: Insurability Does Not Always Mean Deductibility.
5. Underwriting for Physical Impairments: Playing Underwriting Roulette.
6. Underwriting for Physical Impairments: Changing the Odds in Underwriting Roulette.
7. The Cognitive Impairment Test: No Lifelines Allowed.
8. Leveling the Playing Field: How to Distinguish between Fact and Fiction during the Sales Pitch.
9. Who Can Help You Choose the Right Policy?: Finding a Seller You Can Trust.
10. Choosing a Company: Ensuring That the Company Will Be There When You Need It.
12. The Envelope Please: The Nominees for Best Long-Term Care Insurance Soap Opera.
13. Questions and Answers.
14. Dos and Don'ts.
15. Two Letters.
A. Do I Need Long-Term Care Insurance?: Steps in the Process of Making a Decision.
B. Uninsurable Conditions.
C. Physical Impairments and Medical Risk Selection Guide.
What People are Saying About This
"An indispensable book for all those concerned that the cost of health care will rob their old age of dignity and independence. The author, Ben Lipson, an articulate advocate of patient rights and an authority on health insurance, provides a lucid road map in a terrain mined with hokum." —Bernard Lown, M.D., winner of the Nobel Peace Prize
"Next to buying the right long-term care insurance, buying and reading J.K. Lasser's Choosing the Right Long-Term Care Insurance is the best investment seniors and their families can make to help insure independence and dignity in their golden years." —Scott Harshbarger, President and CEO, Common Cause
"Ben Lipson has written what is sure to become the standard text on the subject of long-term care insurance. His analysis is clearly written, exhaustive, and always focused on the needs of the consumer. If you are trying to decide whether you need long-term care insurance, there is no substitute for reading this book." —Peter Hiam, attorney and former Massachusetts Commissioner of Insurance (1983-1987).
"Long-term care insurance is a much needed and valuable insurance concept, marketed in a maze filled with smoke and mirrors. Most of what passes for consumer guidance is just general information and superficial advice. But, Ben Lipson's book takes you by the hand, leads you through the insurance labyrinth, and shines a much needed light on the product." —Charlie Sabatino, President, National Academy of Elder Law Attorneys
" Ben Lipson's extremely readable new book is the best I've seen in many years on long-term care insurance. He has the inside knowledge of a salesman and the no-nonsense style of a journalist. The real point Lipson stressed is "to live out your life independently and with dignity. Never buy a policy out of fear driven by emotional blackmail. Just do your homework and learn the true facts." Judy Foreman, Syndicated Columnist