We have heard it a million times – “by failing to prepare, you are preparing to fail” or some variation of this statement.
Did you know that Benjamin Franklin is often credited for this thought, but that cannot be verified (according to checkyourfact.com). Regardless of the source, the statement rings true. A failure to plan creates an opportunity for problems in the future.
The one thing that we all need to do, as advisors/agents/producers as well as in our non-working roles of parent/child/sibling/spouse/friend/relative, is to make sure that everyone has a plan. Sure, most people plan for a retirement and the income phase, but not many have a thorough plan that addresses the expense side of the ledger.
Did you know … “fewer than 1 in 30 Americans own a long-term care (LTC) insurance policy, and only about 7 percent of adults over 50. The raw figure of 7.5 million insured has barely budged since 2008, despite an increasing aging population.”
source: The America Prospect – https://prospect.org/familycare/the-collapse-of-long-term-care-insurance/
What does this mean? What am I saying? Simple, we all have to do a better job at our job which is planning and managing risk.
One thing that is important for all of our conversations is to know wat the cost of long term care in our region is. Remember, it varies considerably by geography as well as the type of care being received. OneAmerica has produced a tool for you to use with your clients called the Cost-Of-Care Map – at a minimum, you can use this as a baseline to see how affordable (or unaffordable) care is in a particular location.
What I am getting at is that more conversations need to happen.
Why would the state of Washington introduce a long term care funding scheme if it wasn’t an issue to be concerned about? Why did the Affordable Care Act include a provision (the SECURE Act) for long term care that was dropped? It’s pretty simple – because long term care is a significant health and wealth issue at both the individual and national level.
Did you know that, according to Medicare.gov, “Medicare does not cover long term care if it is the only care that you need.” And, “you pay 100% of non-covered services including long term care.” Remember, Medicare will pay for your recovery in a skilled nursing care facility only after a 3-day stay in the hospital (Webmd.com does a nice job explaining what is covered by Medicare).
One thing to remember, is that some Medicare supplement plans will include a provision to help defray the cost of care received at a skilled nursing facility that is not paid for by Medicare. Medicare Advantage may offer some assistance for home care. But, and that is a big BUT, all of this varies by state.
Did you know … Medicaid is the largest payer of long term care claims? But, there is a cost associated with this approach and that is you need to financially qualify. Simply, if you have too much money, you need to “spend down” to their level to qualify for care.
Frankly, I don’t know of many people who want to squander their life’s savings on their healthcare. And, not having a plan leads to this potential risk. Sure, there is no guarantee that an extended healthcare / long term care event will occur, but half of the nation will experience one. And, it is better to be prepared and have a plan to execute than to be ill-prepared and scramble for solutions.
My final did you know for today – I offer a consumer facing seminar every Tuesday night at 7pm – the Great Retirement Income Gap. This is a product neutral conversation about how a long term care event can impact a retirement income plan.
For more information, go to the LTC Coffee Break website at https://ltccoffeebreak.com/virtual-consumer-seminar
Of course, you can contact me for to answer questions, address concerns, and schedule virtual and In-person meetings at kevin.fisher@oneamerica.com or via phone at (678) 512-9627.
For illustration assistance and product questions, please contact Justin Fox at (844) 658-3725 or justinfox.isp@oneamerica.com.
Fridays with Fisher 