The LTCI Messenger from NAHU

September 9, 2013

My Story: Developing a Personal Commitment to LTC

by C. Louanne Trebing

My dad was always a strong man. He fought in two wars: World War II in the Air Force and the Korean War as an army paratrooper. He was shot in the foot during one of his jumps, but Chinese farmers rescued him and after doctoring him, got him back to friendly forces...

by C. Louanne Trebing

My dad was always a strong man. He fought in two wars: World War II in the Air Force and the Korean War as an army paratrooper. He was shot in the foot during one of his jumps, but Chinese farmers rescued him and after doctoring him, got him back to friendly forces.

When his oldest daughter was born, she had a serious heart condition and was not expected to live. But around the age of eight, she was one of the first to be supported by the artificial heart-lung machine when they removed her heart for repairs. My dad worked several jobs to help pay for that surgery and my sister is one of very few heart-lung machine survivors today.

My dad was a master plumber by trade, a captain in the Dallas Volunteer Sheriff’s Department and in his later years, a rancher on about 30 acres in Yantis, Texas. In his younger years, he worked the docks in the Houston area where he was exposed to asbestos.

He was 6’2”, strong, mean when his family was threatened and loved to tell jokes—mostly dirty ones.

So, when his health began failing substantially and he went into a coma at home, it was his wife of 62 years who took care of him. With help from my sister and me, my mom diligently cared for my seemingly invincible dad, turning him, changing his sheets, bathing him and taking care of all of his personal care needs.

I am a one-person insurance agency in the Dallas area and my parents were living in Sulphur Springs, which is about an hour and a half away. My son had bought my mom a great computer for Christmas, so I was often able to work from their home for most stuff, but I had to drive back to Dallas some days for appointments that could not be missed. My parents had depleted most of their savings and my sister had no money, so I knew I would have to pay for the majority of my dad’s final days.

Between the pressures of running my business offsite, the financial concerns, the physical exhaustion of sleeping in a chair in my parents’ room and providing care to my dad, by the end of the week, I was at my breaking point. But evidently, so was my dad, as he soon passed away. When my oldest son came the next morning, he took one look at me and told me to go home. I got away and got some rest. The Monday after the funeral, my mom was hospitalized for heart failure. She recovered but had aged overnight. Now this strong woman had become frail.

I had purchased a Long-Term Care insurance policy for myself years prior, seeing it as a way for me to get care, but I had not focused on the impact on my family. Now I see that you really buy this product for the people you love so they can supervise the care instead of needing to provide it. If my parents had purchased Long-Term Care insurance, I believe my mother would be in better health today.

I have taken it upon myself to learn more about this product. And amazingly, my clients are investing in it as well. I don’t believe it is my personal story as much as the personal commitment and belief I have now developed in Long-Term Care insurance.

A statement I heard in a class really resonates with me: “If you don’t make a decision about Long-Term Care insurance, you are making a decision about your wife or daughter (it could be husband or sons, but statistics lean the other way) giving up their lives and possibly even jobs to care for you. And it may not be just a week, but rather years of their lives.”

See Your Own Story Here
Thank you so much for sharing your story, Louanne! NAHU needs to know about these powerful LTCI stories from as many members as possible to give to members of Congress. We also want to share your story in this newsletter. All submissions should be below 750 words; any submissions over this word count will not be considered for inclusion. Tell us how LTCI ownership, or the lack of LTCI, changed your life or business. Please send your submissions to Claude Thau at
claudet@targetins.com.

Gender-Distinct Pricing Creates Opportunity to Help Clients

by Claude Thau

Until 2013, men and women paid the same prices for LTCI, but insurers are starting to differentiate by as much as 50% more for women. By mid-October, insurers that produced 57% of LTCI sales in 2012 will have migrated to gender-distinct pricing in most states. California, Connecticut, Washington, D.C., Florida, Hawaii, Indiana, Montana and New York are the only jurisdictions that do not have any gender-distinct pricing yet...

by Claude Thau

Until 2013, men and women paid the same prices for LTCI, but insurers are starting to differentiate by as much as 50% more for women. By mid-October, insurers that produced 57% of LTCI sales in 2012 will have migrated to gender-distinct pricing in most states. California, Connecticut, Washington, D.C., Florida, Hawaii, Indiana, Montana and New York are the only jurisdictions that do not have any gender-distinct pricing yet and Montana will not migrate to gender-distinct pricing.

Attractive federal income tax breaks* for small businesses (whether sole proprietor, partnership, LLC, S-Corp, C-Corp, etc.) require that the employer pay for the LTCI and permit discrimination. So many employers buy carve-out LTCI for execs and their spouses, and sometimes just owner-employees and spouses. However, under Title VII of the Civil Rights Act of 1964, it is illegal for employers to touch an LTCI policy that discriminates against women. If all insurers move to gender-distinct pricing, small employers would no longer be able to buy this tax-deductible product.

  • Although we don’t expect gender-neutral pricing to totally disappear soon, it certainly makes sense for a small business to consider buying before choices narrow even more. There are many other reasons to consider buying now. However, if clients defer their decision, we expect to still have gender-neutral pricing available for at least another year.
  • Those with existing gender-neutral policies would be fine under existing law; only those wanting to buy a new policy would be stymied.
  • If an employer is large enough that 10 employees would purchase coverage, they’d be OK because gender-neutral pricing should remain available for such cases. Smaller businesses are at risk.

This is a good opportunity not only to help your single-female and small-business clients but also to enlarge your client base. There are a lot of proprietary tools to help NAHU members leverage these opportunities, and other general agencies and LTCI specialists may have tools as well.

*I am not a tax/legal advisor. I share my understanding solely to help you or your clients determine whether such issues are significant to a decision regarding buying LTCI. If they are interested in pursuing a tax deduction by purchasing LTC insurance, your clients should rely on the advice of their tax/legal professional.

Legislative Update on LTC

by John Greene and Sally Leimbach

With all eyes on the roll out (and last minute changes) of PPACA, little focus has been on Long-Term Care. After the repeal of the CLASS Act, nothing of substantial substance has happened with the exception of recent activities by the LTC Commission authorized at the same time of the CLASS Act repeal...

by John Greene and Sally Leimbach

With all eyes on the roll out (and last minute changes) of PPACA, little focus has been on Long-Term Care. After the repeal of the CLASS Act, nothing of substantial substance has happened with the exception of recent activities by the LTC Commission authorized at the same time of the CLASS Act repeal.

The 15-member (now 14 with one resignation) appointed commission is trying to make up for a slow start in order to meet the mandated end of September deadline to conclude their work. According to McKnight's Long Term Care News from August 14, the LTC Commission Staff Director G. Lawrence Atkins reported that the commission is preparing a three chapter report.

Chapter One: Summary of existing and anticipated Long-Term Care challenges.

Chapter Two: Analysis of specific issues related to finance, service delivery and Long-Term Care work force.

Chapter Three: Commission policy recommendations. Two meetings on August 19 and 29 were supposed to finalize proposals. Recommendations will be presented to Congress for a September 12 vote by the commission.

The public has been asked to submit comments. Unfortunately, the commission will not be able to issue a final draft version for public comment before submission to Congress. As of August 14, there had been 19 submissions posted from stakeholders and the general public. None appear to be from the insurance industry.

New Broker World Survey Can Help Advisors

by Tobe Gerard

Data indicates that companies “sold 9.1% more policies in 2012 than in 2011 and 14.3% more annualized premium,” according to the “2013 Milliman Individual LTCi Survey” published in Broker World Magazine in July 2013...

by Tobe Gerard

Data indicates that companies “sold 9.1% more policies in 2012 than in 2011 and 14.3% more annualized premium,” according to the “2013 Milliman Individual LTCi Survey” published in Broker World Magazine in July 2013.

For those who are Long-Term Care insurance specialists, the release of this survey every July is a well anticipated event. This is the no-frills document containing a myriad of fascinating facts and figures, all of which drill down on the Long-Term Care insurance marketplace. For those of you who are new to LTCI, this survey is a strategic unbiased overview of the industry.

This analysis includes statistics by insurance company market shares, characteristics of policies sold, claims information by dollar amount and venue, underwriting data ranging from underwriting tools to underwriting time, partnership program percentages, gender based pricing, rate increases, market consolidation and other information reflecting the changes that are taking place. If you are looking for hearts and flowers, this publication isn’t for you, but if you want the truth and nothing but the truth, subscribe to Broker World Magazine to have full access to the July 2013 issue.

To order reprints or to subscribe to Broker World Magazine, go to http://www.brokerworldmag.com and click on the “Order” tab in the blue bar at the top of the page. It costs only $6 for a one-year subscription, $11 for two years and $16 for three. Subscribe now to get the next survey as soon as it is published.

You Can Make a Difference... and a Livelihood!

You can make a difference when you sell LTCI, and you can also make a lucrative, persistent income. Our nation needs advisors who are trained in, and understand LTCI. NAHU can help members acquire LTCI competency...

You can make a difference when you sell LTCI, and you can also make a lucrative, persistent income. Our nation needs advisors who are trained in, and understand LTCI. NAHU can help members acquire LTCI competency.

NAHU is also the largest advocate for strong and sane LTCI legislation in Washington, DC and member home states. It has established its reputation as a “go-to” source. NAHU’s input and advice on responsible LTC legislation are often sought by policymakers. If you wish to see the LTCI industry grow and flourish, NAHU membership is important.

This newsletter was created by NAHU’s Long-Term Care Advisory Committee, which gives ongoing input that is used to formulate NAHU’s position on LTCI. Comments are welcome and should be directed to honey@honeyleveen.com.