Look at the Averages

For the past month, I have been sharing commentary and ideas related to averages, longevity, and extended healthcare. That kicked off on April 6 with our LTC Coffee Break broadcast. Check out our full LTC Coffee break episode.

I have discussed the danger of relying solely on average duration care planning. Simply, the average (actually median) leaves out 50% of those included in the group. Those that are “above the average” – how far above that line they does not matter, they exceed the average.

Another point that I mentioned was long duration events and the cost associated with them. These are the catastrophic situations that insurance solutions are designed for. Unfortunately, many solutions presented only offer average or two times the average solutions – leaving what is generally the most costly portion unaccounted for.

Up to this point, I have focused on duration of time receiving care. The other important dynamic is cost. Remember, those costs will vary by region and type of care received.

At OneAmerica, we have a Cost of Care website available for you to use.

You will find that “like care” in Connecticut is far greater than in Louisiana. For example, nursing home care in 2021 CT is $166,242 while in LA it is $70,946. The same applies for home care and assisted living – it costs more in CT.

I am no suggesting that people pick up and move to a less costly state for care (although that might be a viable solution for some), I am saying that knowing what you client’s plans are for retiring including where they might wish to receive care can only improve your planning.

Consider this – when income planning for retirement, geography has a huge influence on every aspect of the plan. It influences virtually everything including the cost and delivery of healthcare – just look at the cost of care numbers for proof.

And remember, healthcare costs are not static. Premiums for Medicare and supplement premiums as well as out of pocket expenses incurred such as deductibles, copays, etc. will change over time according to how those plans evolve and the care that is needed. One way to control some of those retirement healthcare costs and/or exposure to the high costs associated with care is to have a plan. Specifically, I am talking about managing the costs associated with long term care

This is another shameless plug for OneAmerica Care Solutions but only Care Solutions can offer long term care benefits that will last a lifetime along with guaranteed premiums and benefits regardless of premium funding mode. To learn more about our Care Solutions portfolio, contact Justin Fox (my internal) at 844-658-3725 or via email at justinfox.isp@oneamerica.com

Coming up next week on LTC Coffee Break, Michael and I will talk about using qualified money as a funding source for our Asset Care policy. And, you can expect me to follow-up with qualified money ideas in Fridays with Fisher during the month of May.

If you have any questions or would like to schedule a virtual or IN-PERSON meeting, please contact me at (678) 512-9627 or via email at kevin.fisher@oneamerica.com.