A National Challenge… Long-Term Care A gap in health insurance exposes a hole in...
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Transcript of A National Challenge… Long-Term Care A gap in health insurance exposes a hole in...
A National Challenge…
Long-Term CareA gap inA gap inhealth insurance health insurance exposesexposesa a holehole in inretirementretirementplanning...planning...
Michael E. Wright, CFPWright Financial Advisors, LLC
Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies. Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered InvestmentAdvisor.
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The Matter in this presentation is designed to provide accurate information with regards to the subject matter covered and is not rendering legal, accounting, or tax advice. For answers to specific questions and before making any decisions, please consult a qualified attorney, tax advisor or other professional to address your specific needs.
Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies. Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered InvestmentAdvisor.
YOU DO!!!!YOU DO!!!!
Who needsto learn aboutLong-Term care?
What is RetirementPlanning?
WealthAccumulati
on
What’s Missingfrom your
Retirement Plan?
Wealth Preservation
Did you know…Did you know…• Long-term care will affect one in two people?Long-term care will affect one in two people?• Cost between $50,000 - $100,000 per year?Cost between $50,000 - $100,000 per year?• Medicare and traditional health insurance does not pay Medicare and traditional health insurance does not pay
for long-term care?for long-term care?• The average American loses their entire life savings The average American loses their entire life savings
within eleven months ?within eleven months ? LTC.gov, 10/2010; retirement savings report, ebri, 10/2010
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Workshop Objectives
• Teach you about long-term care Teach you about long-term care and your new long-term care and your new long-term care benefitbenefit
• Make you aware of a GAP in Make you aware of a GAP in traditional health insurancetraditional health insurance
• Show how planning for long-term Show how planning for long-term care is related to financial planningcare is related to financial planning
• Financial securityFinancial security• Personal choice and freedomPersonal choice and freedom• Negative impact on othersNegative impact on others• Independence and dignityIndependence and dignity• You love your familyYou love your family
Reasons PeoplePurchase Protection
PlanPlanforforit!it!
Lifestyle
Health Insurancevs. LTCi
Levels of CareLevels of Care• SkilledSkilled• IntermediateIntermediate• CustodialCustodial (needing help with activities
of daily living – ADL’s)
The Gap in Traditional
Health Coverage
Skilled CareSkilled CareMedically neededMedically needed
Intermediate CareIntermediate CareLess frequent skilled careLess frequent skilled care
Custodial CareCustodial CareHelp with ADLs or memoryHelp with ADLs or memory
1st 60 Days1st 60 Days Next 40 DaysNext 40 Days After 100 DaysAfter 100 Days
Covered Not Covered
Covered
Not Covered
Not Covered
Common Causesfor LTC
Health ConditionsHealth Conditionsand Illness:and Illness:• Stroke and Heart Stroke and Heart
AttackAttack• CancerCancer• DiabetesDiabetes• Arthritis and Arthritis and
OsteoporosisOsteoporosis• Alzheimer’s, Alzheimer’s,
Parkinsons Parkinsons and MSand MS
Young or old, LTC insurance picks upYoung or old, LTC insurance picks upwhere your health insurance leaves off.where your health insurance leaves off.
Injuries from:Injuries from:• Auto and motorcycle Auto and motorcycle
accidentsaccidents• Activities like skiing, horse-Activities like skiing, horse-
back riding, divingback riding, diving
““A study by the Department of Health and A study by the Department of Health and Human Services indicates that people age 65 Human Services indicates that people age 65 face at least 50% lifetime riskface at least 50% lifetime riskof needing long-term care.”-of needing long-term care.”-10/201010/2010
What’s the Risk?
You’re NEVER too young
to plan for Long-term care““40% of the40% of the
13 million who need13 million who need
help with basic help with basic
ADLs ADLs
are between theare between the
ages 18 and 64.” ages 18 and 64.”
--longtermcare.gov 10/2010longtermcare.gov 10/2010
A Women’s Issue
• 1 in 2 WOMEN will spendwill spend AT LEAST ONE YEAR in a in a nursing homenursing home
• 1 in 3 MEN will spendwill spend at LEAST ONE YEAR in a in a nursing home -nursing home -longtermcare.gov longtermcare.gov
10/201010/2010
According to the New EnglandAccording to the New EnglandJournal of Medicine:Journal of Medicine:
What is the difference between
Disability andLong-term Care
Insurance?DisabilityDisability• Replaces income• Typically ends at
retirement
Long-term CareLong-term Care• Pays for care• Coverage continues
throughout your life
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Your homeYour homeAssisted livingAssisted living
Nursing homeNursing home
Places You can Receive Long-
Term Care
$100,000a year.”
longtermcare.gov 10/2010
and in some placesand in some placesthe cost can topthe cost can top
$50,000 a year,
“Long-term Carecosts an average ofcosts an average of
Who pays?60%
50%
40%
30%
20%
10%
0%
Medicaid Self &Family
Medicare PrivateInsurance
Other Gov.Program
• Skilled care onlySkilled care only• Medical progress Medical progress
continuescontinues
Medicare
• 3 day prior 3 day prior hospital stayhospital stay
• Joint state and Joint state and federal programfederal program
• Pays for health care Pays for health care from poor (welfare)from poor (welfare)
• Many must “spend Many must “spend down” their assets to down” their assets to qualifyqualify
Medicaid typically will only pay for care in a nursing home
Medicaid
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Spend Down
50% Between 50% Between $21,912 - $109,560 $21,912 - $109,560 $1,823- $$2,739$1,823- $$2,739
IN Medicaid 2011 IN.gov
Assets Income
$1,500 $674
• 1935 – 40 workers to 1 retiree1935 – 40 workers to 1 retiree• 1989 – 3.4 workers to 1 retiree1989 – 3.4 workers to 1 retiree• 2020 – 1.8 workers to 1 retiree2020 – 1.8 workers to 1 retiree
Don’t count onthe
Government
Your health plan does NOT coverlong-term care
• HMOsHMOs• Health insuranceHealth insurance• MedicareMedicare• Medicare supplementsMedicare supplements
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Federal legislation
shows intentHealth & Welfare Reform of 1996Health & Welfare Reform of 1996
Deficit Reduction Act of 2005Deficit Reduction Act of 2005TAX-DEDUCTIBLE premiums & TAX-FREE benefits
• Increased lookback period• Reduced ability to use annuities to shield assets
State Partnership ProgramsState Partnership ProgramsMedicaid spend down protection
CLASS ActCLASS ActVoluntary Government LTCi Plan
Your homeYour homeAssisted livingAssisted living
Nursing homeNursing home
Types of Care LTCi will Pay
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Benefit Triggers
Need assistance with 2 of 6 ADL’sNeed assistance with 2 of 6 ADL’s• Bathing• Dressing• Transferring
The deterioration or loss of intellectual The deterioration or loss of intellectual capacitycapacity
• Alzheimer’s
OR
• Toileting• Feeding• Continence
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Waiver of Premium
Premiums stop when you are Premiums stop when you are receiving benefitsreceiving benefits
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Fixed Premium
Premiums are fixed to the age you Premiums are fixed to the age you purchase coveragepurchase coverage
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What is the Cost of Waiting?
• Lifetime premium payments are Lifetime premium payments are always higher the longer you waitalways higher the longer you wait
• You risk not being able to get You risk not being able to get approved when you apply due to approved when you apply due to pre-existing medical conditionspre-existing medical conditions
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Benefits for Town of
Framingham• Education for employees at a young age Education for employees at a young age
while protection is least expensivewhile protection is least expensive
• ONE-TIME offer of Simplified Underwriting for ONE-TIME offer of Simplified Underwriting for eligible employees & spouseseligible employees & spouses
• Premium discounts for employees, spouses Premium discounts for employees, spouses and family membersand family members
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Plan Design Options
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Long-Term Care Myths
• It’s covered by traditional health insurance It’s covered by traditional health insurance and Medicareand Medicare
• It’s something you look at in your 60’sIt’s something you look at in your 60’s• LTC insurance only pays for a nursing LTC insurance only pays for a nursing
homehome• ““It will never happen to me”It will never happen to me”• Long-term care insurance is expensiveLong-term care insurance is expensive
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Solving the problem
Closing the Closing the HOLEHOLE in financial planning… in financial planning…
Registered Representative of and securities offered through OneAmerica Securities, Inc., Advisor.9229 Delegates Row #190, Indianapolis, IN 46240,(317)573-3838, Member FINRA, SIPC, a Registered Investment Advisor. Insurance Representative of American United Life Insurance Company, AUL and other insurance companies. Wright Financial Advisors is not an affiliate of OneAmerica Securities or AUL and is not a Broker/Dealer or Registered Investment Advisor.