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Better Win Buckets at the Track
Mary G. Barry, MD
T
Louisville Medicine Editor
[email protected]
hat’s about the extent of a lot of folks’
long term care planning – not the
most cheerful topic for the lovely
month of May, but as we enter the Triple
Crown of racing, think about what you
would have to win to provide for your parents’ care as they finally become feeble - or
your own future care.
Be forewarned: my husband says that this
is so grim that I should tell you up front,
“Abandon all hope ye who enter here.”
The national statistics are daunting, to
say the least. The average cost per year nationally to live in a private room in a nursing home is about $95,000, and in a double
room it’s still $83,000. But these costs are
rising between 3 and 4 percent per year
depending on where you live in this country. The average daily cost right now for
an in-home caregiver provided by a local
agency in Kentuckiana is about $20 an hour.
Nationally, it is about $30,000 a year and has
been rising at about 1.3 percent per year.
If you can send yourself or your loved one
to adult day care, that costs about $20,000/
year, and that cost is rising at a lower rate
of about 1.3 percent/year.
The John Hancock website quotes Mr.
Michael Doughty, an executive vice president: “The cost of long-term care continues
to be one of the most significant uninsured
financial risks that an individual can face.”
If you want to have nightmares, use this
website at www.johnhancockltc.com/coc to
figure current and inflationary costs.
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LOUISVILLE MEDICINE
Some people are completely uninsurable
for long-term care because of pre-existing
conditions. For instance, everyone with post
polio syndrome, which includes a sadly
large chunk of baby boomers, will never be
able to get long-term care insurance. Those
who have significant mental illness, most
neurological conditions including multiple
sclerosis, muscular dystrophy, Parkinson’s
disease or dementia of any type or severity, are not eligible to apply for long term
care insurance. Those with most cancers,
rheumatological illness or even chronic
osteoarthritic or orthopedic problems that
require they use a multipronged cane or
walker, need not apply. Anyone who requires oxygen or wheelchairs, or already
needs assistance with any activity of daily
living, may not apply. HIV, autoimmune
hepatitis, Non-A, Non-B, or Hepatitis C,
chronic kidney disease, cirrhosis of any
cause, hemophilia or cystic fibrosis or any
other significant childhood illness with
adult consequences - all knock you out of
the running immediately as well.
A May 2012 article from the Society
of Actuaries’ Long Term Care News compared standards of underwriting for various pre-existing problems. The actuaries’
trademarked motto is “Risk is Opportunity,”
which I figure is about as cold-blooded as
their typical professional behavior. About
half of insurers list a maximum acceptable
weight for a man of 5’10 as 285 lbs, although
a third set it under 265 lbs. For a woman
below 5’4, this was set at less than 230, and
was raised as height increased. Minimum
weights also applied; I presume this screens
for undeclared illnesses or frailty in general.
The severity of some illnesses renders
them a rating of insurable or not. Angina,
smoking, alcoholism, certain skin cancers,
osteoarthritis, inflammatory bowel diseases,
sleep apnea, depression, amputation, COPD,
TIA and stroke are unacceptable if severe.
Definitions of “mild or moderate” for these
ailments vary. Especially if judged to be
moderate, having these conditions simply
raised one’s rates as opposed to made one
uninsurable. If the actuaries assigned you to
a “mild” category, there was quite a diversity in the rate –setting, some barely raising
rates at all. Some of these judgments were
made through telephone interviews. If the
applicant is 70-years-old, face-to-face assessments are universally required to screen
for cognitive impairment. Some insurers
require a face-to-face interview for every
applicant. Insurers use MIB Group data
extensively. The MIB Group services many
different insurance companies by collecting
and compiling health and insurance-use
data on anyone who has applied for any
individual life, critical illness, disability, long
term care or health policy in the previous
seven years. After seven years, the data is
removed (I daresay the NSA could find it).
Most insurers also conduct prescription
drug searches on all applicants.
The average “affordable” policies involve
a daily benefit payout lasting less than five
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