Are your clients prepared for the “Silver Tsunami”?

By Marcia Israel

Discussing future long-term care health needs and aging with Baby Boomers is tough. Yet, it’s important to have those delicate conversations about future care plans so you, your clients, and the people you love can live life on their own terms. Talking openly about life matters and about how to plan for future personal needs initiates an ACTION PLAN so family members can fulfill a loved one’s wishes--the where, the when, the who, and the how for future care. Deciding ahead about care planning and how pay for care—creates a smooth care transition when needed.

According to 2021 info from the Federal HHS Agency, "about 60% of people eventually need some type of long-term care Even a few years of personal care can be a major financial burden.” (1). Planning for potentially catastrophic healthcare costs at the end of our lives is a vital component of aging and retirement. This video demonstrates ways to begin “The Talk.”

What You May Learn from Your Clients? How You Can Assist Clients in Planning for FUTURE Care Needs

Lifestyle: What is daily life like now? What do their loved ones expect it to look like in the future?

Legal: Is there a will, durable power of attorney, or health care POA in place? Trust? Up to date? Accessible?

Finances: How are the bills currently being paid? Is there income that can be redirected for care if need be?

Medical Care: Are health histories and contact information for medical providers available? Up to date?

Alternate Benefits: Do they qualify for Veteran’s Benefits or Medi-Cal?

The Rising Cost of LTC

The Genworth Financial 2023-24 Cost of Care Surveys (2) reported that the cost of a home care aide, assistance with the ADL’S, increased by 10% to an annual median cost of $75,500. The national annual median cost of a semi-private room in a skilled nursing facility rose to $104,000, an increase of 4.4%. The cost of a private room in a nursing home increased by 4.9% to $116,800. Assisted living facility rates increased by 1.4% to an annual national median cost of $64,200. With 10,000 baby boomers turning 65 every day until 2030, the demand for skilled personal care workers has increased, affecting future costs.

Planning today for a future extended health event benefits families financially, emotionally, and/psychologically.

“Understanding extended care options and its true costs are critical first steps toward being prepared for whatever you want your aging journey to look like,” Jamala Arland, president/chief executive of Genworth U.S. Life Insurance.

The American Association of Colleges of Nursing reports that “a shortage of RN’s is expected to intensify as Baby Boomers age” (3); a recent House Ways and Means Committee hearing also made clear that the U.S. is experiencing a nurse shortage, as Baby Boomers are turning 65 in record numbers.

As trusted Health Insurance and Medicare advisors on the forefront of this “Silver Tsunami,” you are most knowledgeable about your clients’ health care, family, and extended care planning requirements. You can advocate for your clients’ care planning, including LTC Insurance. By proactively addressing these needs, you are helping them navigate complex insurance options and rights, along with comprehensive, sustainable health care plans.

Coverage Gaps: Medicare (ltd coverage for LTC) primarily covers short-term stays in SNF’s. Agents can help clients navigate these gaps.

Financial Planning: Extended care is expensive; costs should be anticipated. Guide clients, perhaps, in exploring payment options: self-funding, buying LTC Insurance.

Personalized Solutions: Advice can be tailored to clients’ health status, financial situation, and family dynamics.

Awareness of Options: Medi-Cal and Veteran’s Benefits eligibility; LTC Insurance choices; alternate funding sources.

Peace of Mind: Discussing care options may alleviate anxiety about future care needs, empowering clients to make better decisions and enhance their quality of life. Advocacy: Advocating for clients helps them navigate complex insurance plans, ensuring that they understand their rights/options.

Typical Objections to LTC Insurance-How Experienced LTC Insurance Advisors Address These Cost: LTC Insurance premiums are high. Premiums can be individualized so coverage/ payment options fit the financial needs/budget of each family. Premiums may be deductible (check with financial experts). Complexity: Policies can be complex, difficult to understand. Seasoned agents clarify the options, benefits, and exclusions.

Perceived Low Need: Some people are in denial, believing they won't need personal care or assuming that they can rely on family members or other resources. Families differ, as do caregiving options. Fear of Wasting Money: Concerns about paying premiums for years; never using the benefits (or it’s a waste of money). Hybrid policies may mitigate this concern.

Premium Increases: People are wary of future premium increases. Policies sold now in CA are more rate stable.

Health Issues: Those with existing health problems believe it difficult to qualify for coverage (assuming the insurance isn’t available). There is a cost to waiting… Long Sales Cycle: LTCI has an extended underwriting process. Experienced agents explain the financial, caregiving, and psychological/emotional value of the coverage.

“Coming to terms with the fact that, at some point, you may need assistance with basic tasks as you get older isn't easy. Life is unpredictable, and being prepared is smart…LTC Insurance protects savings and assets against the high and ever-increasing cost of care.” (4)

Is LTC Insurance Worth it?

No one can predict when or for how long someone might require extended care. Care costs are increasing. If one doesn’t qualify for government programs (i.e. Medi-Cal) and/or doesn’t have enough assets to cover the costs, an LTC Insurance policy becomes advisable. LTC Insurance eligibility (through age 79) decreases with age; it depends on one’s health at the time of application. Families should decide ahead of the need to fund future care expenses as part of retirement and estate planning to safeguard assets, savings, and legacy.

Marcia Israel, a native of Los Angeles, (Go Bruins!) worked for many years with disadvantaged teens. In 2003, Marcia joined her husband, Stan, opening Stan Israel Insurance Services, Inc., a Life and Disability Insurance brokerage. The team then added Long Term Care Insurance to their portfolio and grew their expertise, offering CE licensing classes, CA Partnership courses, and general LTCI education to agents, financial planners, fiduciaries, and estate planning attorneys. As industry specialists in LTC Insurance, Marcia and Stan collaborate with financial professionals to offer all LTCI coverage options.