In This Issue

o                                                  How to Reduce Long-Term Care Insurance Costs

o                                                  Medicare Beneficiaries Facing Another Double-Digit Premium Hike

o                                                  Book Review

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·      More About ELA

·      Two Easy-to-Read Booklets on Alzheimer's Disease

 

·      Preventing Durable Power of Attorney Fraud

 

·      Exceptions to Medicare Therapy Caps

 

·      Emergency Readiness Guide for Older Adults and Caregivers

 

·      Study Says Women Bear Greater Share of Long-Term Care Burden

 

·      How Seniors Can Spot a Con More Easily

 

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How to Reduce Long-Term Care Insurance Costs   While long-term care insurance can be a good way to pay for a nursing home stay or a home health care worker, it doesn't come cheap. Annual premiums vary significantly, depending on your age, health, and the type of policy, but policies can run as high as $5,000 per year. You do not need to pay that much, however. The following are some ways to reduce your costs. Shorter benefit period.The most significant cost-saving step you can take is to not purchase a lifetime policy. Unless you have a family history of a chronic illness, you aren't likely to need coverage for more than five years. In fact a new study from the American Association of Long-term Care Insurance shows that a three-year benefit policy is sufficient for most people. According to the study of in-force long-term care policies, only 8 percent of people needed coverage for more than three years. By purchasing coverage for three, four, or five years instead of a lifetime, you can save thousands of dollars in premiums. If you do have a history of a chronic disease in your family, you may want to purchase coverage for 10 years, which would still be less than purchasing a lifetime policy. Buy younger. Long-term care insurance premiums rise as you age, so the younger you buy, the cheaper your premiums. Be careful, however, because insurance premiums can, and often do, increase considerably from your initial purchase price. Even if you have a policy that is "guaranteed renewable," your premiums can still increase. For more information, click here. Shared care policy. If both you and your spouse are purchasing long-term care insurance, a shared care policy might be able to give you more coverage for less money. With a shared care policy, you buy a pool of benefits that you can split between you and your spouse. For example, if you buy a five-year policy, you will have a total of 10 years between you and your spouse. If your spouse uses two years of the policy, you will have eight years. A shared care policy may cost more than separate policies with the same benefit period, but it will allow you to buy a shorter policy, knowing that you have a pool of benefits to work with. Longer elimination period. Most policies have a waiting period before coverage begins, typically 30-90 days. The longer you make this waiting period, the cheaper your premiums. Keep in mind, however, that you will have to pay for your care out of pocket until the waiting period is over and the insurance begins its coverage. Reduce the daily benefit. Instead of purchasing the maximum daily benefit you might need in a nursing home, you can consider paying for a portion of the daily benefit yourself. You can then insure for the maximum daily benefit minus the amount you plan to pay. A lower daily benefit will mean lower premiums. Inflation protection. Inflation protection increases the value of your benefit to keep up with inflation and is almost always recommended. But you can save on premiums by which method of protection you choose: compound-interest increases or simple-interest increases. If you are purchasing a long-term care policy and are younger than age 62 or 63, you will need to purchase compound inflation protection. This can, however, more than double your premium. If you purchase a policy after age 62 or 63, some experts believe that simple inflation increases should be enough, and you will save on premium costs. You should also remember that your premiums may be tax-deductible. Premiums for "qualified" long-term care policies will be treated as a medical expense and will be deductible to the extent that they, along with other unreimbursed medical expenses (including "Medigap" insurance premiums), exceed 7.5 percent of the insured's adjusted gross income.

 

Medicare Beneficiaries Facing Another Double-Digit Premium Hike   The Bush administration projects that the premium for Medicare Part B, which covers doctors' services, will rise at least 11.2 percent to $98.40 a month, in 2007, and the increase may be slightly higher. The administration attributed the double-digit hike to the fact that more people are turning 65, as well as to a rise "in the volume and intensity of physician and outpatient hospital services over the last several years." Premiums are currently $88.50 a month following a 13.2 percent rise from the 2005 figure. The Medicare Part B premium increased by nearly $30 a month, or 51 percent, from 2003 to 2006. The 2007 premium could go even higher if doctors succeed in blocking a 5.1 percent pay cut that is scheduled to take effect next year. But Congress is also considering a bill that would ease the burden on seniors by revising the formula for calculating premium increases. The actual Part B premium amount for 2007 will be set sometime in the fall. "We're going on several years of repeated double-digit increases, and it's also roughly three times the rate of the Social Security (cost-of-living) increase," said Kirsten Sloan, chief health lobbyist for AARP. "It puts a real squeeze, particularly on moderate-income seniors." Click here for a Seattle Post-Intelligencer article on the premium increase.

 

Book Review  Who Cares: A Loving Guide for My Future Caregivers This is a book that buyers will largely write themselves, and it is a book that, once completed, will find a very limited but crucial readership: the writer's own future caregivers. If we become unable to manage our own affairs - something that will happen to most of us at some point - how will those caring for us know what to do? How will they know what brand of toothpaste we prefer, much less whether we want to be kept alive by extraordinary means? Will they even know who we are if we are unable to tell them? Author Dee Marrella, who experienced much guilt and self-doubt in caring for her incapacitated mother, has created a way for adults still of sound mind to map out in detail the care they would wish to receive if they themselves become incapacitated. Much of the book consists of largely blank pages to be filled in with important information such as "Doctors, hospitals or other professionals I never want to go back to," "Friends to notify if I am hospitalized," and "Where to locate important papers." In addition, there are opportunities to convey to caregivers - who are often one's children - essential information about who one is as a person. For example, there are pages to make note of fears that one has, accomplishments that one is proudest of, and lingering regrets one may have. To help guide readers, Ms. Marrella often supplies her own answers as examples. While the book is mainly aimed at adults who may need care later in life, it can be equally appropriate for children with special needs if completed by their parents or guardians. For many of us, having "the conversation" about our future incapacity is one of most difficult things to do. This book makes a direct, face-to-face conversation unnecessary, substituting a set of general care instructions and a small autobiography that can be completed in private and with careful consideration.

 

Ellen S. Morris, Esq. & Howard S. Krooks, Esq.