Long Term Care

Several studies have shown that up to 70% of those who reach age 65 will require care services at some point. For example, according to the Wall Street Journal, statistics show 70% of those who reach 65 will need long-term care (see http://tinyurl.com/knq3csz). Without protection, seniors are placing their savings and estates in jeopardy.

The problem is that long term care insurance is very costly. Many beneficiaries pay $300 per month for premiums and costs are subject to increase. For example, KTVZ recently reported that approximately 30,000 Oregonians will see their premiums increase by an average of 26% in the near future (see http://tinyurl.com/kmkdrsw). With expensive premiums and no guarantee of future rates, long term care insurance is not a viable option for most of us.

An interesting alternative to long term care insurance has been gaining in popularity recently. Although it doesn't work exactly in the same way as LTC insurance and is not a perfect substitute, it does provide a much more affordable option with many of the same benefits. This alternative is - get ready for it - a specialized kind of life insurance. But it's not just any kind of life insurance. It's life insurance that you can use while you're still living and is known as life insurance with living benefits. This is how it works.

The policy includes a death benefit, just like traditional life insurance policies. You have the choice of term, universal or whole life policies, just like you do with traditional life insurance. But these specialized policies come with a built-in rider where a portion (usually around 80%) of the death benefit can be accessed for certain events. Many critical, chronic or terminal illnesses qualify to access the benefit. Of course, most of the time, those who need long term care have been diagnoses with either a critical, chronic or terminal illness. It's not a perfect overlap, but it's relatively close.

Benefits vary greatly by plan so if you're interested in looking at this as an alternative, make sure that your agent considers several of the most competitive plans for your needs. Prices are generally slightly more than they would be for life insurance without the rider, but are normally far less than long term care insurance would be.

Since life insurance has guaranteed rates, your rates will not increase for as long as the policy is in force. We recommend whole or universal life for this application except under certain circumstances. This is because term insurance is designed to expire at some point - and would be expensive and may very well be difficult or impossible to qualify for later on.

For more information, please contact Don at 541-280-7170, or call your local insurance agent if you already have one. Just make sure they are aware of the products and have experience with them.

Differences in Medigap Plans

Often, when I meet with Seniors on their healthcare needs, I find three common themes.

• They are living on very tight budgets.
• They are comfortable with the Medigap plan they already have.
• They are overpaying for the Medigap plan they are on.

One thing I really try to stress to my clients is that all Medigap (Medicare Supplement) plans are standardized. Company A's plan F offers no differences in benefits than company B's plan F. None.

Did you catch the significance of that statement? If there are no differences in benefits, then we can understand that the only real difference from one plan to another, where both plans have the same name, is the price.

It's very possible to be overpaying for your benefits by $40, $50 or even more - every other month. I've seen situations where people are paying more than $800 per year for their Medigap benefits. The real shame in this is that most of these people could really use that money for other purposes.

Regardless of who you use to purchase your Medicare Supplement, I recommend that you always go with the lowest price. This is not like buying auto or homeowner insurance, where a company can differ from a competitor in the way they pay, the coverage they provide and so on. Go with the lowest price. It's as simple as that.

Medicare Made Simple

Let's face it. Medicare is a complicated maze of bureaucracy and confusion for many seniors. Our purpose here is to attempt to explain how it works in simple, straightforward terms.

 

Medicare is a government program that allows seniors and those who are fully disabled to receive their health care. It doesn't pay for everything. For example, Medicare doesn't pay for prescription drugs, hearing aids, dental care, most eyeglasses, elective surgery, out the country health care (unless it's a medical emergency) or long-term care costs. In addition, the insured is responsible for applicable deductibles, coinsurance and copayments. There is no cap on out of pocket costs, which can potentially run hundreds of thousands of dollars, or even more.

 

There are four core parts to Medicare, Parts A, B, C and D, which we will now explain.

 

Part A is automatically provided to those who have worked for at least 10 years and their spouses. Normally, no premium is charged for this coverage. Once you've met your Part A deductible, Part A pays for medical expenses such as hospitals and inpatient facilities. It also provides some coverage for skilled nursing facilities. It does not provide for long term care.

 

Part B is the coverage that pays for things like doctors, tests and outpatients services. In 2013, the premium for Medicare part B coverage is $104.90 per month. Some seniors are not even aware of this expense because most of the time, it is deducted automatically from the recipients social security payment.

 

Part C is also known as Medicare Advantage. Those who are on Medicare Advantage plans receive their benefits through a private insurance company rather than directly from the government. Many Medicare Advantage plans also include extra benefits, such as prescription drug coverage.

 

Most of the Medicare Advantage plans in Oregon are subject to networks of providers, known as HMOs or PPOs. The costs and benefits are area specific. Because of this, when an individual moves from one area to another, they normally lose the coverage they had in their former area and enroll in another plan. Out of pocket costs such as copayments, coinsurance and deductibles are usually a part of Medicare Advantage. However, depending on the county in which you live, the monthly premiums are usually surprisingly affordable - in fact, sometimes plans offer zero cost Medicare Advantage plans. Unless the insured is on an assistance program such as Medicaid, they will still continue to pay the Medicare part B premium.

 

Part D is simply stand alone prescription drug coverage for those who are still on original Medicare (those not on a Medicare Advantage plan). Copays, formularies, and deductibles often apply, so make sure you are able to compare various plans in your area in order to select the best plan for you. An experienced and ethical advisor is highly recommended to help you understand what your options are and which would be suitable for you.

 

Medicare Supplements (Medigap Plans) - Many, if not most Medicare recipients who have original Medicare, choose to include a "Medicare Supplement plan".At Oregon Senior Benefits, we highly recommend this course for original Medicare recipients because there are gaps in coverage with Medicare. As was stated earlier, the out of pocket costs can potentially reach catastrophic levels if no additional coverage is purchased. Medicare Supplements were created to bridge the gap of what Medicare pays for and the actual costs. These "standardized plans" are named (by the level of benefits involved) Plans A-N.

 

One of the most important concepts for those who have Medigap plans to understand is this: The only difference between one company's Medigap Plan and another company's Medigap Plan by the same name is the cost of the Plan. The benefits are identical.

 

For this reason, we at Oregon Senior Benefits HIGHLY RECOMMEND annual reviews of your Medigap policy, to ensure that you are always paying the least amount of premium necessary for your Medigap plan. If you are paying more than a few dollars per month more for your current plan than you would for the same plan with the new company, you are advised to switch. 

 

Another key point to understand is that there are options with your Medigap plans. For example, you could choose Plan N in order to keep your premiums lower, but if you want a higher level of coverage, perhaps Plan G or Plan F is a better fit. Monthly premiums costs are not always the crucial factor. Standardized Medigap Plans are given names from A to N.

 

So which plan is right for you? There are a number of variables that need to go into your decision making process. That's where we come in. Not only will be come to your home for a free consultation, we will explain how things work, answer any of your questions and assist you in making the best decision for your own health care. 

 

We invite you to email or give us a call. We'll arrange for a meeting. Not only is the consultation provided to you at no cost, but our policy of "no hassle, no pressure" means that you are always entirely free to do as you please without feeling obligated in any way. And you may be surprised at how much you save.