Meeting your health care needs.

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Meeting your health care needs.

• The Long Term Care Dilemma

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Youre worked a lifetime to accumulate your
assets

• Do you hope to pass any of your wealth on when
  youre done using it?
• How much of your wealth is in qualified plan
  assets, like IRA, 401k, Profit Sharing?
• Qualified Plans are great wealth accumulation
  vehicles, but bad wealth transfer vehicles.

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Have you had experience as a caregiver?

• Are your folks still alive?
• How old were they at death?
• How did they die? Was there a medical condition?
• Do you have any siblings? How is their health?
• How is your health?
• The acorn doesnt fall too far from the tree.

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When is long term care needed?

• Where you have Cognitive issues
• Help with activities of daily living.
• Would you like to stay in your home as long as
  possible?
• Married couples do well together.
• What if there is only one of you?

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Providing Medical Coverage...

• First there is Medicare
• Part A - In Hospital
• Part B - Out of Hospital
• With Medicare Supplement Policies
• Or Alternate Medicare Plans like the HMOs
• There is very limited coverage for skilled care
  or home care needs.

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Legislative changes in 1997

• It created Tax-Qualified Plans.
• California Partnership for Long Term Care is
  confirmed and is an excellent program that
  continues to advocate for consumers.
• Policies premiums are deductible through Schedule
  A subject to 7.5 of AGI.
• Self Employed deductions on the front page of the
  1040.
• Corporations can deduct premiums for LTC.

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Tax Qualified Features

• Medical necessity cannot be a benefit trigger.
• Two of Six ADLs trigger benefits
• Must certify inability to perform ADLs for at
  least 90 days.
• Cognitive Impairment
• Described as severe
• Applies substantial supervision test.

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The Tax Rules...

• The premiums are deductible within limits as part
  of the itemized deductions that exceed 7.5 of
  Adjusted Gross Income. On your Schedule A in
  Year 2007.
• Age 51 - 60 1,100
• Age 61 - 70 2,950
• Age 70 3,680
• Any benefit is received income tax free.
• It can be deducted on the front page of your
  1040, as health insurance if youre self
  employed.

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The intent of Congress?

• The Concern for Aging America and its impact
  on our society financially brought it to their
  attention.
• They wanted to keep these policies from becoming
  a stream of tax free annuity income.
• To assure that contracts offer features geared
  toward Long Term care.
• To protect consumers relating to disclosure
  guaranteed renewability and other requirements.
• To help protect the integrity of the Medicaid and
  our own MediCal system.

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Activities of Daily Living

• These are the activities that trigger a claim.
  Usually 2 of the 6 must be deficient to go out on
  a claim.
• Dressing
• Eating
• Toileting, doing it.
• Continence, holding it.
• Bathing
• Transfer, like from a bed to the chair.

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Levels of Health Care Covered by Long Term Care
policies.

• Skilled Nursing Care
• Requires care by skilled medical personnel,
  available 24 hours.
• Intermediate Nursing Care
• For daily help, ordered by a physician, less
  specialized and requires fewer procedures than
  skilled nursing care.
• Custodial Care
• Helps a person perform activities of daily
  living. ADLs

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What are the risks of needing Long Term Care?

• That depends on how old you live to be.
• Women are twice as likely as men to enter a
  nursing home.
• Department of Aging Statistics

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Projected lifetime use of nursing homes for
persons who reached age 65 in 1990.

• They project 57 will never use a nursing home.
• 19 will use it for less than a year.
• 15 will use it from 1 to 5 years
• 9 will be there more than 5 years.

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How much does it cost for nursing home care?

• A lot!
• A Typical California Nursing Home Costs 54,000
  per year in today's dollars.
• A more realistic number is between 48,000 and
  80,000 a year in LA and Orange Counties.
• What will it cost in the future with inflation?
• This risk is a risk worth looking at.

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What is Long Term Care Insurance?

• It provides a financial benefit when health and
  personal care services are needed.
• Home Health Care agency services
• Adult Day Care centers
• Nursing Home Care at all levels
• Respite Care for your care givers.

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What is the Medi-Cal Solution to Long Term Health
Care?

• Take care of yourself as best you can, until you
  have depleted all or most of your assets.
• Then apply for Medi-Cal benefits.
• Medi-Cal rules for persons in medical
  institutions and nursing facilities differ from
  rules used to determine eligibility for persons
  in the community.

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The California Partnership for Long Term Care

• Medi-Cal is a resource when there are no longer
  any funds available.
• You Qualify for benefits through the spend
  down.
• The Partnership says that if you take the time to
  manage some of this risk yourself through this
  insurance, then Medi-Cal will offer you dollar
  for dollar protection of assets for all the
  dollars spent out of your own long term care
  policy. You get an exempted asset letter
  stating the amount protected.

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A brief look at the Medi-Cal Eligibility Rules

• There is exempt property and non-exempt
  property.
• Exempt Property includes a car, household goods
  and the home. The home is exempt, but subject to
  a lien.
• Non-exempt Property includes cash over 2000,
  (3000 when married) investments, second cars,
  vacation homes, cash values of insurance....

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The Medi-Cal Spend Down

• Excess property must be reduced to be eligible
  for Medi-Cal.
• A transfer of nonexempt property includes a look
  back period of 36 months from date of transfer
  (60 months for trusts) to determine ineligibility.

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Medi-Cal limits for Married Couples when one is
in a Nursing Home

• Spousal Impoverishment provisions of the 1988
  Medicare Catastrophic Coverage Act (MCAA)
  entitles the non-institutionalized spouse to keep
  a certain amount of the couples combined and
  separate property.
• As of 1/1/07 the Community Spouse Resource
  Allowance is about 92,000 of assets and 2300 a
  month of income.

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When is Long Term Care needed?

• When you have a chronic medical condition, with a
  physical or mental limitation, requiring
  assistance with activities of daily living.
• In case of a cognitive impairment that could
  include confusion or disorientation or similar
  dementia.

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Who needs long term care insurance?

• People age 50 and older are usually interested in
  their long term health care protection.
• People with assets and net worth in excess of
  250,000 should consider it.
• People should consider their own families
  longevity and health issues to evaluate their
  need for coverage.

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How is a policy designed?

• It reimburses up to a fixed dollar amount per day
  for Nursing Home or facility or a monthly amount
  of money for Home Care.
• After a waiting period or deductible period that
  you choose. Usually 0, 20, 30, 60, 90, 120 or
  180 days.
• To a maximum dollar benefit amount or an
  unlimited pool of money.
• The policy may include inflation protection.

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Some of the User Friendly benefits provided by
the policy

• A Care Coordinator to help you and your family
  understand your choices and the care you need.
• Home Modification Benefit
• Therapeutic Devise Benefit
• Caregiver Training Benefit
• Medical Alert System Benefit
• Respite Care - For your care giver.

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Inflation Protection is important.
150 Daily Benefit increased by 5 Compound
Interest Rider.
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Protecting your assets.
100,000 Principal Sum your asset now, _at_5
could earn, 5,000 a year to pay a premium for
a couple.
162,000 - Initial 3 year Benefit 150 a day
Nursing Home or 4500 a month Home Care
With 5 Compound Inflation Protection
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An Example

• Male 65 Female 60
• 162,000 Bucket of funds each
• 150 a day, 4500 a month
• 5 Compound Inflation Protection
• 45 day Elimination Period (deductible)
• 5,000 annual premium

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The Outline of Coverage Form

• An Outline of Coverage is a brief description of
  the important policy features provided to the
  prospective buyer at the time of initial
  solicitation. California law requires this
  standardized document be provided as a basis of
  product comparison.

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Your 30 day Free Look...

• A 30 day free look period is provided with all
  Long Term Care policies. You may return the
  policy within 30 days of its delivery to you,
  and have all the premiums and fees refunded by
  the insurance company if you do not want the
  policy.

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Underwriting

• Complete an application for coverage, and submit
  one months premium.
• The insurance company will write to your doctor.
• Youll receive a personal phone call from the
  Insurance Company or possibly a face to face
  assessment from the paramedical company.

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Theyll make you the offer...

• Once your policy is approved, the insurance
  company will issue a policy to you, and give you
  the 30 day free look offer to accept it.
• The broker will deliver the policy to you and
  your 30 days begins.

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To get a proposal we need...

• Your age
• Your marital status
• Your smoking history
• Your health, past and present
• A little information on your lifestyle
• Your financial situation
• What you want your policy to do for you!

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Your proposal will include,

• How much daily benefit is purchased
• 80 to 300 per day
• How long the waiting period will be
• 20, 45, 100 or 30, 60, 90, 120, 180 days
• And how much benefit to buy
• 2, 3 or 4 years
• or an Unlimited amount.
• And offer inflation protection.

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Thank you for your interest in Long Term Care
protection.

• Let us prepare a personalized proposal for your
  consideration.
• We represent a variety of quality companies that
  specialize in Long Term Care insurance.
• Let our Long Term Care insurance specialist
  answer your questions!
• Thank you for the opportunity to be of service.

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How can you help yourself?

• Meet with a knowledgeable advisor to discuss your
  own situation. You need to be able to disclose
  information about your assets, your income and
  your health.
• Review a proposal to determine the premium.
  Consider your own family history and your risk.
  Some insurance may be appropriate.

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Underwriting

• Dont be afraid to complete an application and
  see if youll qualify for a policy.
• Money pays for a policy, but your health allows
  you to get it.
• Youre guaranteed the right to Not Take the
  policy, if you dont want it in the end. Any
  money collected is returned.

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We help you make better decisionsabout money!

• Call on us today!
• Thank you for your interest.

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Melissa Shaw, CFP

• Accent Insurance Brokerage
• 26477 Rancho Parkway South
• Lake Forest, CA 92630
• 800-729-6344
• 949-699-1662
• www.MelissaShawPlanner.com

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Let us help you meet your needs.

• Talk with your broker or financial advisor today.