Kay Coles James: Hello, I'm Kay James, Director of the U.S. Office of Personnel Management. I want to thank you for joining us for this satellite broadcast, our first on the new Federal Long Term Care Insurance Program. The U.S. Office of Personnel Management is proud to sponsor this exciting new benefit program which is likely to be the largest employer-sponsored long term care insurance program in the nation. Our long term care program establishes the federal government as the pace setter in the marketplace and as a cornerstone of our commitment to you, the men and women who work for America.
As you've probably heard by now, long term care insurance soon will be available to the federal family -- federal and postal employees and annuitants, members and retired members of the uniformed services, and qualified family members. OPM has chosen John Hancock and MetLife as the insurance carriers for this new benefit, and they've created a new company, Long Term Care Partners, which will be devoted exclusively to the federal program. While I'm sure that John Hancock and MetLife are well-known to you, if you're like most people, you may not know as much about long-term care, and you may think that long term care insurance is not something you need to consider now or in the near future,
But did you know that:
- Long term care is the single largest uninsured financial risk that American families face;
- That over 40% of those who need long term care are under the age of 65;
- Or that traditional health insurance programs, such as the federal employees health benefits program, Tricare, and Medicare, do not pay for most types of long-term care?
Clearly, long-term care is one of today's most important issues. Congress recognized this when it authorized OPM to establish the Federal Long Term Care Insurance Program.
Long term care insurance is one way to protect your finances from the potentially devastating impact of paying for long-term care. It can enhance your ability to live independently despite chronic illness. In addition, long term care insurance can assure that you have flexibility and choice in how and where you receive care.
But is long term care insurance right for you? And how can you make smart choices about the many long term care insurance options available? OPM is committed to providing reliable, easily understood information to help you make the best decisions possible about paying for the long-term care that you and your family might need.
Over the next several months, we'll be working with Long Term Care Partners in an extensive effort to educate the federal family about all aspects of long term care insurance. You'll be hearing from us through meetings at your workplace, informative newsletters and brochures, and satellite broadcasts like this. We have two websites with a wealth of information and planning tools, and of course, we have a toll-free number, where you can talk to a knowledgeable professional who will help you assess your choices and decide whether to enroll during the open season later this year.
Today's satellite broadcast focuses on long-term care, what it is, and what it is not. You will learn about the variety of ways that people pay for long-term care. You will hear from federal employees who have helped their family members deal with this challenge. Most importantly, long term care experts will be available to answer your questions live.
This information is vitally important to all of us, and I commend you for tuning in to this broadcast. Thank you.
Syrena West: Maybe we didn't want to see it. Maybe we just didn't want to recognize the fact that they were getting older because we always thought they would always be with us, not recognizing that one day, we would have to face that.
Judy Davis: When we are busy living our lives, we don't think about our parents aging, necessarily. We don't think about ourselves aging, necessarily.
Britt Salmon: It's just a really hard decision, you know, and even my father asked me, "what are we gonna do now?" now what do you say? "well, dad, we're gonna have to make some tough decisions," is what I told him.
Judy Davis: Well, I was born in Decatur, Illinois, and I lived on a farm. It was fun growing up there. I'm the oldest, and I have a brother who's two years younger. I don't see him very often because we live so far apart, but we're close.
My mother grew up in a family of five, and she put herself through school, and her first teaching job after she graduated from college was in Latham, Illinois, and that's where she met my father because the little town of Latham is six miles from the farm where my father was living. In 1941, they went to New Orleans and got married.
My father fell on the ice and broke the main bone in his hip, and he'd had diabetes and emphysema, and he'd always been, you know, a heavy man, so the extra weight probably didn't help in regaining the strength of that leg. He had a little bit of a hospital stay and then coming home and needing home care, which was done primarily by my mom at that time. I think she told me she took care of him for 16 or 17 years in that condition before he died.
With regard to long-term care for my father and mother, I'm sure they had not purchased anything. This issue with my father came up on them so quickly, they didn't have time, because once you are in it, in the situation, you can't just decide to buy a policy. So they had not done anything jointly. It was after my father's death that my mother started thinking about it for herself.
When we made the decision to buy the long term care insurance for my mom, it really did do something for both of us. It gave me peace of mind that I knew that there was a plan "b" or a plan "c" in mind for her that if and when a time came when it was necessary for her to go to a long term care facility, we had it all set up. And I said, "Mom, I don't care if you ever use the policy. "that's your protection. It's out there. "you pay the bill every year for the policy, and that's your protection."
Britt Salmon: I was born in 1960 in the little town of Chambersburg, Pennsylvania. I have an older brother and a younger sister. I spent my childhood in the same home in the same little town until I went into the navy at age 18, and then I went and did 21 years in the service.
My mom, she was born in Staunton, Virginia, and my dad was born in Chambersburg, Pennsylvania. My mom ended up moving up into the Chambersburg area, and they met in Chambersburg and actually got married there. By dad was around during the depression, and he worked very hard for his money and saved everything he could save.
My father, in 1980, had a pretty rough heart attack to the point where he was in the hospital for 40 days. He began to exercise a lot more and eat a little bit better than what he was or whatever, but then in the 1990s, he started to get some small strokes. And the strokes just deteriorated his body to the point where he couldn't do things for himself.
My brother and my sister and I and my mother were talking about what we could do for my father and where this was going, and we all came up with a decision. My mother was just not gonna be able to take care of my father, so we kind of got our heads together, and we made a decision that he just -- we had to get some help, and we decided to go for the home.
When we initially put my father in the nursing home, we had no idea of how much it was gonna be costing or what kind of care was gonna be involved, but the first nursing home he went into, the price was over $4,300 or $4,400 a month. Coming up with $4,000 a month is something that, you know, is kind of stressful on everybody because it just watches their bank account go down to nothing.
Right now, I'm married happily and have four children, and it kind of bites at you a little bit, and you think, "maybe I could do some more for my father or my mother in this situation." but reality sets in. It would last for a couple weeks or maybe a month, but then, you know, it just drains on you, and so, you know, you always think, "what if? What if? Maybe I could do a little bit more." and it eats at you for a while, but you just have to make a decision and go with it.
Syrena West: Well, I grew up in a very close community, so to speak, in a small town in west Tennessee. My mother married my father. My father was 32. My mother was 22 when they got married, and they lived in a little house just down from my grandma. And I grew up walking to my grandma's house, making biscuits, cookies on a counter, doing all kinds of things with my grandma.
My father would oftentimes give us a ride on the tractor. He would take us out in the farm, and he'd show us different things, or he would say, "come on, sister, let's go walk among the trees, and let's talk to the wise man upstairs." he had such a love of nature and a love of his surroundings that he passed that on to his children.
My mom and dad were always so much in control. The thought of becoming incapacitated or becoming weak in any -- to any degree was far beyond my imagination. Oh, it was a real revelation when my dad was slowly beginning to lose weight, becoming more frail. Even though he was blessed with a wonderful mind, his body just couldn't keep up. My father passed away in July of 1998.
My mom, at that point, believed very strongly that she was totally capable of taking care of herself, and she wanted to be independent. She wanted to continue on with living at the same place and keep everything up, but she -- it was like her right side had been cut off, so to speak, because they had lived together for 60 years.
Well, after about six months, we realized that my mom was actually probably a little afraid of being there by herself, so we had our family meeting, a family forum, the three of us with my mom, and we sat down and talked to her and said, "you know, mom, we really are afraid for you, and we feel like that you need to have more care."
So she finally decided on an assisted-living area -- it has about 10 patients, and that's where mother has made her home. When mother made her decision that this was what she wanted, that's where she wanted to live, then we talked about, "in order for us to do that, we would need to sell the farm in order to put the moneys aside to provide for this." and of course, I think we all think about always maintaining the old home and all the furniture and everything that's in it, but in reality, you know, it's something that was in their time. It was something that was provided for them, and it's theirs to dispense with. So of course long term care insurance would have allowed us to dispense it at our own discretion, but in this case, it was used to take care of mom.
I think for all of us, we have a certain amount of dignity that we like to maintain and I think we all have to come back to ourselves -- what is it that we would like when we become old and maybe incapacitated to some degree? Do we want to be just shoved off to the corner and say, "this is where you're gonna be, and this is how you're gonna be cared for"? I don't think so. I think it's really, really important that we understand that that older person that we're gonna become, that we want to have choice, we want to have a say in what is going to happen to us.
Doris McMillon, Moderator: Some powerful stories, and that's why we're here today. The purpose of this broadcast is to inform you about long-term care, what it is, what it isn't, and what some of your options are for paying for long-term care. Long-term care is an important topic to consider because it is one of the largest uninsured financial risks in the united states today. Most traditional health-insurance programs like FEHB, Tricare, and Medicare do not pay for most types of long-term care. Because people are living longer than ever, our chances of needing long-term care at some point in our lives are increasing as well.
Throughout the course of this broadcast, we hope to provide you with information that will help you make some knowledgeable decisions about planning for your future. There's going to be a live question-and-answer session at the end of the panel discussion, fax or e-mail your questions at any time during the broadcast. Our fax number is... Our you can e-mail your questions to... And if you'd like to call in with a question, please call the toll-free number...
Now I'd like to introduce you to our panelists. First we have Gail Hunt. Gail is the Executive Director of the National Alliance for Caregiving. It's a nonprofit organization which conducts research and develops programs for family caregivers. Prior to heading NAC., Gail spent 14 years as president of her own aging-services consulting firm. Gail has leant her expertise to such notable organizations as the National Institute on Aging, the Social Security Administration, and AARP. Gail, welcome.
Gail Hunt: Good afternoon, Doris.
Doris McMillon: Next, we have with us Dr. Sandra Timmermann, Director of the Mature Market Institute for Metropolitan Life Insurance Company, or MetLife. Dr. Timmermann is a nationally recognized gerontologist with 25 years experience in the field of aging, and she's held senior-staff positions with the American society on aging, AARP., and Seniornet. Sandy, thanks for joining us.
Sandy Timmermann: Thanks, Doris.
Doris McMillon: Our third panelist is Phyllis Shelton. Phyllis is president of LTC Consultants in Nashville, Tennessee. It's a consulting and training firm responsible for educating over 35,000 people about long-term care and long term care insurance. Phyllis has been in the insurance industry for 25 years, and she is the author of "long-term care -- your financial-planning guide." it's published by Kensington books, and that was in 2001. We're glad you could be here with us.
Phyllis Shelton: Thank you, Doris.
Doris McMillon: And finally, we're joined today by Frank Titus. Frank is the assistant director for long-term care in the U.S. Office of Personnel Management. Frank has been working on the government's retirement and insurance programs for 30 years and is currently directing a small office devoted to implementing OPM's newest benefit program, the Federal Long Term Care Insurance Program. Frank, thank you for being here.
Frank Titus: thank you.
Doris McMillon: All right, well, we're gonna get started. Gail, all I can say is, before I ask you the questions, I am so glad that I got long term care insurance a couple of years ago. Those vignettes we saw are powerful. Would you give us some insight into long-term care in general, and then why is this such an important issue being faced by families today?
Gail Hunt: Doris, long-term care could be defined as the kind of care that people need when they have a chronic illness and they need assistance in performing daily tasks, everything from bathing, dressing, feeding to things like grocery shopping and handling finances. And 80% of the care in this country -- long-term care -- is provided by family and friends. A lot of people sort of mix up acute care and long-term care. Acute care could really be thought of as taking place in a hospital or an outpatient setting. It's usually of a short duration. Usually, the person is expected to get better, and it has a very medical focus.
By contrast, long-term care really takes place in a variety of settings, and when that care is paid for, it's expensive no matter which of these options you choose, from a home to an institution. It's of longer duration. That is, it's typically of many years. Chronic illness we've talked about. Normally, the person is getting progressively worse rather than getting better, as we thought of. The idea here, rather than getting better, is thinking of helping them to maintain their function, maintain their independence as long as possible, and here, again, they really are needing assistance with everyday tasks. Some of the settings that we think of as long term care settings are going to be in-home -- that's like in the vignette, Judy refers to her mother taking care of her father for 16 or 17 years.
The majority of people receive care at home. But then there's also assisted-living facilities, adult day care facilities, and, of course, lastly, nursing homes.
Doris McMillon: I guess any chronic-health situation could be pretty draining, both emotionally and financially, on a family, from your perspective, what are some of the impacts of long-term care for family caregivers?
Gail Hunt: The National Alliance for Caregiving has done a lot of research on the impact on family caregivers. I guess one way of thinking about it is there's a lot of time that gets spent dealing with the whole issue of family caregiving and dealing with the caregiving. Part of that is expectations. Family caregivers typically think that they're gonna be helping a family member in long-term care for maybe six months or a year, and then dad is gonna get better, and then things are gonna go back to normal. In fact, on average, family caregivers are doing it for four and a half years, and for some of them, considerably longer.
There are financial impacts. One of the biggest financial impacts is out of pocket. That is, caregivers actually spending for groceries, assistive devices, home modifications, medicines that the older person or the family member with long-term care needs to the tune of about $171 a month or $2,000 a year, which is the equivalent of an IRA another impact is work-related. We know that two-thirds of the caregivers work full- or part-time, and half of them say they've had to make some kind of workplace accommodation. That's things like coming in late, leaving early, taking a leave of absence, dropping back to part-time, or at the extreme end, actually leaving the workplace, and that, again, has a, obviously, financial impact on the caregiver.
Doris McMillon: You mentioned in passing the physical and mental stress that we know that caregiving can actually cause people, but probably the emotional stress is the big issue, the kind of burnout that caregivers feel, family caregivers feel, when they have been doing caregiving over a time period and they really just burn out and are unable to continue doing it anymore. And I'm sure some of our viewers now are experiencing some of this. Now, obviously, this doesn't all happen in a vacuum, but what about the care recipient? How do they respond in a situation like this?
Gail Hunt: Well, I'm glad you mentioned the care recipient, too. Sometimes we tend to forget about that person, but we know from lots of research that's been done that the care recipient doesn't want to be a financial or other burden on the family member. They want, as much as possible, to remain independent. AARP. has done studies that show that 85% of people want to remain home in their own home as long as possible rather than move into any other kind of setting. And I'd say, thirdly, there's a strong feeling among care recipients that they don't want to go to a nursing home if there's another option available.
Doris McMillon: All right, Gail, what can families do to avoid the emotional and the financial drain of this?
Gail Hunt: Caregivers can look for resources. There are lots of resources out there to help them, but actually, the big issue is planning for long-term care. Family members should start the dialogue early. They should sit together and have a family counsel, like one of the vignettes referred to, but very early on and talk about, "what are our options? "what responsibilities do we want to assume, "and what responsibilities "should we be expecting to pay for down the road, "and what are our options, for example, in terms of housing and alternative settings for the care recipient to be in?" and particularly, begin the financial planning early.
Doris McMillon: Okay, Gail, thanks for the overview of long-term care. What I'd like to do now is turn my attention to dr. Sandra Timmermann. Sandy, I know that we have a pretty diverse group of people that are watching our broadcast today. Help us to understand, typically, who needs long-term care.
Sandy Timmermann: You know, Doris, I think most of us think we'll never need long-term care. It's just human nature and probably part of the boomer mentality that if we eat well, we exercise, we take care of ourselves, we'll live well into our 80s and 90s, and we'll be in perfect health. I also think that most of us can't imagine that we would need long-term care when we were younger. We can't imagine that we would develop a disease like M.S. or Parkinson's or that we might be in a sports-related accident or in an automobile accident, but the truth is, we can use long term care services at any age. And there is a chart that shows some of the statistics on this. 40% of people that need long-term care are age 18 to 64. So what you're really seeing in this statistic is that it isn't only for the old. It's really for the young.
Of course, life expectancy is something we read about in the newspapers all the time. The population is aging, the graying of the baby boomers, and if you look at that longevity chart, that's important, too, because, as you can see, when someone reaches the age of 65, they have many years ahead of them in retirement. A man can live an extra 16 years -- that's the average -- and a woman, 19 years. So I'd say there's good news and bad news about longevity. Of course, the good news is we all want to live longer and we want to enjoy our retirement years, but the bad news is that the longer you live, the more likely you are to develop chronic conditions, which begin to kick in in the late 70s and 80s. And of course, a longer life also means that you could outlive your income, or if a catastrophic event occurs, you may actually run out of the assets that you've saved for all your life.
Doris McMillon: So then the real message here is this is something that can happen at any age. 18 -- people aren't thinking like that. But from what we've heard so far, it sounds like these types of services are going to be very expensive. So typically, how much does long-term care cost?
Sandy Timmermann: Well, you know, as Gail mentioned, for families, there's a great emotional impact, but there certainly is a huge financial impact, and just projecting ahead with inflation, you can really imagine what some of these costs would be like. I know from the vignettes, we watched families talk about how they had to deplete their family assets over a lifetime, all the hard-earned savings. And what we know now in this day -- the average cost of a nursing home for one year is $50,000. Now, in some areas, it might be a little less, but I can talk from experience. I live in connecticut, and, believe it or not, I'm a caregiver and paying $102,000 a year for a skilled nursing facility. It's a small, private room. So with that kind of a cost, it's certainly something everybody needs to think about, particularly as they're planning ahead.
Home care can be less costly, particularly if a family can supplement home-care services with the services that a family would provide. So that's certainly an option, but as people become more impaired, they may need round-the-clock care at home, and that can, at times, be as expensive as nursing-home care.
It's also important, Doris, to think about the cost of care and the impact on your earnings over a lifetime, for those of us who work. Gail touched on this in her presentation, but what I know from one of our studies is that people, if they have to quit or retire early, do lose income, and we did find in a study that if a care recipient has long term care insurance, the caregiver is twice as likely to remain in the workforce. So that would make a very big difference.
Doris McMillon: Okay, well, thanks, sandy, for identifying who might need long term care services and then for informing us about the costs. When you list all the implications long-term care can have on an individual or a family, how do we get beyond that feeling, that overwhelming feeling, and how do we plan for our future?
Sandy Timmermann: You know, I like a book very much called "thriving after 55." generally, financial planners, when they work with you, focus on helping you accumulate your assets so you have money in your retirement. But not too many financial planners are really working with you to protect your assets if you would need long-term care, and the premise of "thriving after 55" is really a good one. It is -- "in order for you to have a happy "and secure retirement, "you need to plan for your final years of life and then work backwards." so you have to ask yourself three questions. The first one is "where will I live in those final years?" then you have to ask "how will I pay for it?" and then you have to ask yourself "how will I live?" that's the quality question.
So just consider for a minute where you would like to live if you become frail and you're no longer able to care for yourself alone. Do you want to remain in your own home? As Gail mentioned, most people really want to do that, but of course, that has ramifications because you would need to retrofit your home and be sure that you had services available. Or would you prefer to move to assisted living? Or would you like to move in with your adult children? And by the way, you should ask your adult children if they want you to move in.
But once you decide that, then you really need, next, to figure out how you're going to pay for it, and I know Phyllis is going to talk about some of those options. Certainly paying for what you would like in those final years of life is a key ingredient. But once those two basic questions are out of the way, then you'll have peace of mind, and you'll be able to live your life the way you want and really live it to the fullest.
Doris McMillon: Okay, great. So planning is key here. I'd like to ask Phyllis a few questions about how to, one, pay for it. Can we count on the familiar health-care-funding mechanisms like Medicare, health insurance, disability-income insurance to pay for most long term care needs?
Phyllis Shelton: No, Doris, we cannot, and there's a chart on the screen right now, if you'll take a look at it, that will show you most care is either paid for -- people using their own savings. When they run out, they turn to Medicaid, which is public assistance, and regular forms of insurance don't cover long-term care. This is one of the most important things we can tell you all today. Medicare doesn't cover it. Private health insurance -- certainly the health insurance through the federal program, whether it's for actives, for retirees,VA., HMOs, Medicare Supplements, Disability-income Insurance.
And I thought Gail did an excellent job on explaining to you the difference between acute care, which is short-term-recovery care -- think of maybe physical therapy, speech therapy after a stroke or an accident, but here's the key -- the minute you stop showing progress, that health insurance is over. When you get into a maintenance condition and you just need help with maybe taking a bath, getting dressed, moving around -- the basics of life -- health insurance won't pay for someone to help you with just those things, and this could be a 25-year-old after a car accident who's totally paralyzed in a coma. So it has nothing to do with how sick you are. It's the type of services you need.
And disability-income insurance, so many younger people think, "that'll take care of me." disability-income insurance only gives you a portion of your income so you can pay your bills. It's not gonna give you another $5,000 a month or so to pay for somebody to come in and take care of you with long-term care services.
Doris McMillon: Oh. That's the pits, actually. But doesn't Medicaid cover long term care services when you need them?
Phyllis Shelton: Well, Medicaid will pay any type of care like we're talking about. Could be the skilled care, could be the non-skilled, but there are sacrifices that I want everyone to hear, and I'm gonna hit five points with you, all right? First off, it's a spend-down program. You have to be down to, in most states, right at $2,000 in assets. Now, for married couples, you need to know they're gonna add those assets together whether they're in the husband's name or the wife's name, and the most the spouse at home can keep is a little over $90,000, right in there, and the monthly income maximum for that spouse at home is $2,200, so it's a spend-down program.
Second point is -- I keep saying "spouse at home," right? I want to emphasize to you that Medicaid is public assistance -- taxpayer dollars. So there's not a lot of money, unfortunately, to pay for home care. Therefore, we're talking about mostly nursing-home care, so you don't get a lot of home care. You don't get these gorgeous assisted-living facilities. You don't get to pick where you go to the nursing home. They're gonna tell you where to go. Very rarely would you ever get a private room. You could be hours away from your family. People say, "I'll just give my assets away and get on Medicaid." there's a look-back period. There's penalty periods. There's a program called estate recovery where the federal government tells the states they have to recover what Medicaid has paid out at the death of the second spouse. So then it becomes a loan.
But the last reason, and this is the most important one -- being on Medicaid, when you're not paying the bill, means lack of choice, and I think most people do not find that acceptable because we want to be at home with our families, or, "i want to go to one of these ritz-carlton assisted-living facilities."
Doris McMillon: All right, well, what about self-insuring? Isn't this another way to cover some of those costs?
Phyllis Shelton: Well, that's a dual question you're asking there, Doris -- can you self insure? Are you able to? And even if you're able to, do you want to? All right? So let's take that. If we're using the cost of the $50,000 or something like that for long-term care per year, let's project that at an inflation cost of just under 6%, and believe me, folks, this is really conservative. 30 years from now, we're gonna be looking at over a quarter of a million dollars a year. That's for one person. What if both spouses need it? What if, heaven forbid, one of them has alzheimer's? Average caregiving time is eight years, but it could be all the way up to 20, so you can see how expensive.
Then I looked at a couple in their mid-50s, and I said, hey, if only one of them has long-term care, say, in their mid-70s for five years, the impact on that estate using a 6% lost-investment opportunity is about $1.5 million, so we're talking lots of money here. Okay? And in fact, october 22, 2001 -- wall street journal article said the number-one mistake investors are making on planning for retirement is they're not planning for long-term care.
But let's say, okay, you're still thinking about self-insuring. Here's one other point I'll make to you. We're looking at something that is very expensive, it's very likely to happen to us, and it's not covered by anything else until most of own resources are exhausted.
Doris McMillon: Then what are the options?
Phyllis Shelton: well, my favorite option -- and I think you all have figured this out by now -- is long term care insurance, and the main reason I feel that way, Doris, is because long term care insurance makes nursing-home care the last resort, not the first resort, and we have choices. And I would just cite a study recently of home-health-care patients with long term care insurance. Half of them said without this insurance policy, they would be in a facility, so I think that's very strong.
And the last thing I would say to our federal family audience is please don't wait. If you're over 18 years old, you're not too young to think about long term care insurance, because sandy told you 40% of the people who need long-term care are 18 to 64, and it could be M.S., it could be Parkinson's Disease, even early Alzheimer's, and certainly accidents -- sporting accidents, automobile accidents. A third of the people who have a stroke in the country every year are under 65. It costs much less at younger ages, and the point is, if you wait, you might not have this wonderful choice. You might be uninsurable. No amount of money buys you insurance when you have a severe medical condition.
Doris McMillon: Okay. Thanks a lot, Phyllis. We're going to be taking your telephone calls, so we'd just like to show you the number. It's... If you'd like to e-mail us, e-mail us at... And if you're too shy to call in, then you can fax us as well. The number... Very valuable information. Thank you so much. And I'd like to say thank you to our panelists so far for all of the information that they've given us.
But now I'm going to turn to Frank Titus of OPM now that we've gotten a general overview, Frank, about what long-term care is, how much it costs, and what our options are for covering this expense, give us a little background, if you would, about the Federal Long Term Care Insurance Program.
Frank Titus: Sure, Doris. Congress passed the long term care security act in September of 2000, and OPM worked very hard to support that act and towards its enactment because, among other things, as administrators of the federal employees health benefits program, we were acutely aware of the fact that, as has been discussed, that program does not provide for chronic illnesses and long-term care.
After the act was established, we worked hard with experts in the field, like Gail and sandy and Phyllis and insurance experts, to get the best advice we could so that we could develop one of the most comprehensive and one of the most affordable long term care insurance policies in the nation. And one of the most interesting things that we encountered during that process is all of the experts in the field that we spoke to were just absolutely committed to the product and to informing and educating folks so that they could make informed decisions about protecting themselves, protecting their finances in the future against the very real probability that they would need long-term care. They were committed, and OPM is committed, and over the next several months, we will be working very hard to educate our eligible population so that they're in a position to make informed decisions about this very important coverage.
Doris McMillon: And speaking of education, Frank, what else do you plan to do?
Frank Titus: Well, we're going to have at least two more satellite broadcasts. One is going to focus on long term care insurance as opposed to long term care needs, per se. And then we will turn to the product line that we will be offering to our eligible population.
We're also publishing a bulletin. And for the viewers who call in or go to the website, they can register for this bulletin. It's part of our educational campaign. It provides important information not only about long-term care but just other information that is useful to folks at all ages. We will have a toll-free number. That's already been established. We'll be conducting more than 1,500 seminars across the country so that people can ask questions, can hear from experts about long-term care. And we'll have a wide variety of other publications. We want to be absolutely sure that the eligible population is educated and is in a position to make an informed decision about this product.
Doris McMillon: So, Frank, who is eligible to apply for the Federal Long Term Care Insurance Program?
Frank Titus: well, the congress, when they enacted the long term care security act, basically specified most of the populations, and you see them on the screen. One population that isn't mentioned on the screen is survivor annuitants, both of retirees and of retired members of the uniformed services. These populations add up to, we think, more than 20 million eligible folks. This will be, as our director mentioned, the largest long term care insurance program in the country, and we call this population the federal family.
The law also gave us the authority to issue regulations to identify other eligible populations that are related to the populations that were on the screen a minute ago. We're not doing that at this time because the task before us is huge, and we want to get the program up and running before we visit additional populations.
Doris McMillon: Well, 20 million's a lot of folks, and I'm sure most of our viewers today will want to know, how can eligible individuals apply for the program?
Frank Titus: Well, there are going to be two opportunities. The first we call an early-enrollment opportunity. That begins later this month, but that's for a very limited population. That's for the population that has already informed themselves about long-term care and long term care insurance, and that's not a lot of people. But there is a pent-up demand that we want to meet.
But for the vast majority of the people, they'll benefit from all of the education that I mentioned earlier -- the publications we're gonna be putting out, the seminars, the additional satellite broadcasts, and most people really need that education and need that information in that campaign that will lead up to the open-enrollment period that will begin July 1st and run through December 31st. So one of the things I'd like to leave the viewers with is please don't feel any sense of urgency to sign up during the early-enrollment period. Almost all of you will be better off waiting for the education that will occur between now and July 1st and benefiting from the seminars and the other opportunities to learn about this product.
Doris McMillon: Let's take our first question. We have a telephone call. Indianapolis, indiana, please go ahead.
Caller: Thanks for calling. [ echoing ] okay, thanks. Our question here with -
Doris McMillon: Turn your volume down a little bit.
Caller: If we still have a job, are we still going to be able to afford the insurance premiums? And can you just give us some age categories here on the videoconference of what this might cost considering your age and blah blah blah?
Frank Titus: We won't be publishing our premiums until march 25th. If you go to our website, you'll be able to see the premiums, and there'll be a premium calculator there for you on the 25th. We won't be disclosing them until then, but they will be available. I can assure you that the prices that we have are very competitive and will compare very favorably with what you find out in the private sector.
Doris McMillon: Indianapolis, thanks for your question. Let's take a question from Washington, D.C. please go ahead. Hello?
Caller: Yes, my name's Dennis, and while I'm a federal employee, and I've been doing a lot of homework on long-term health care for a while -- I'm pretty set on myself for getting into the program later on this year, but my father recently died. My mother grew up in an age where long-term health care didn't exist. She couldn't afford it. I'm now the principle caregiver for her at home. She's 80. Will she be eligible through the program because I'm a federal employee? If so, that's great. If not, where do I look?
Doris McMillon: Frank?
Frank Titus: She will have to undergo an underwriting process. It'll be the same kind of underwriting that she would go through if you were talking to any insurance company about purchasing a private policy for her. And at 80, I can tell you that the premiums are going to be very, very high, and I don't know anything about your mom's health. So I don't know whether she will pass that process or not. But the good news is it sounds like you're gonna perhaps be one of our early purchasers, and the good news is is that for our policy holders, there will be assistance available to you in terms of making arrangements for your mom, and you will have access to advice and limited assistance from care coordinators, and you'll also have access to discount arrangements that our companies will be putting in place. So there'll be a benefit to you and to your mom even if your mom doesn't purchase a policy or isn't qualified to purchase a policy so long as you do. That's great information.
Doris McMillon: Dennis, thank you so much for your call. Let's take another call from Washington, D.C. Hello? You're on the air.
Caller: Hi. This is Cathy. I'm also a federal employee. I would also like to know how, specifically, can I find out how much long-term care will cost in my area?
Frank Titus: Well, we're not going to have that available immediately. I think it may be available if you call the 800 number. When we run the regular open season, we're going to have a website that's just going to knock your socks off, and one of the things it will do is it will allow you to enter a state or a zip code, and it will tell you, okay, what the cost of care is in your area. So you'll be able to better gauge the size of the policy that's right for you.
Doris McMillon: Okay, cathy, thank you so much for your question. Let's go to gaithersburg, maryland. Please go ahead.
Caller: Very good. I have a question. I know it was mentioned that 57% of the people that are over 65 need long-term care. Could any of the panelists break that down in terms of how many are using home care, how many are using assisted living, and how many have to ultimately go to nursing care?
Doris McMillon: Phyllis?
Phyllis Shelton: Yes, the population of people needing long-term care -- and we're looking at all ages here, all right? The statistics are there's, like, 18% are actually in nursing homes. It's about 1.5 million people, but the rest of these people -- so a little over 80% -- are being cared for out of a nursing home, and I think that's what we all want to hear, because the nursing home becomes last resort when you have money to pay for care at home or even adult day care or assisted-living facilities. So less than 20% in a nursing home.
Doris McMillon: Okay. Thank you so much for your call. I have a fax here. Jean from seattle says, "isn't most long-term care provided in the nursing home? Gail?
Gail Hunt: Uh, no, and I mentioned this. 80% of the care that's provided is provided by family and friends, not in a nursing home, and as Phyllis just said, 80% of that care is provided in some other setting. Home- and community-based setting is what we would call that -- either in the home or maybe in assisted-living. So a relatively small percentage of long-term care -- actually, it is a small percentage -- is provided in a nursing home. Some people do go into nursing homes for short-term recovery and then go out again, but what I'd like to say is we do have options like assisted living. Perhaps 10 years ago, people went to nursing homes because there wasn't this other alternative, and that's one of the nice things now. There are ranges of choices with long term care insurance policies, and while they're expensive, the assisted-living facilities, they're more home-like, and people do have a level of independence there while still being protected.
Doris McMillon: I have another fax. This one says, "my spouse is disabled "and attends adult day care while I work. "is he eligible for long term care insurance or is it too late?" Phyllis?
Phyllis Shelton: Well, I think I want to reiterate what Frank was saying. The family members outside of the spouse will certainly have to go through complete underwriting just like they would through any insurance policy. Spouses will have lighter underwriting. However, it's not going to be guaranteed issue. Frank, if you want to repeat or reiterate a little bit what you were saying.
Frank Titus: This would be a spouse, but there would be still some underwriting. For our abbreviated underwriting, I think we have seven questions. For spouses, there are about two additional questions. Now, whether a disabled spouse would pass that underwriting is really a function of the disability, and those underwriting documents will be available on the web on the 25th, and basically, you should be able to tell, because if you're able to answer "no" to all of the questions, then you're insurable. If you answer "yes" to some of the questions, then you may not be insurable or you may only be eligible for an alternative product.
Doris McMillon: Okay. Let's take another telephone call. We have walterboro, south carolina, on the line. Please go ahead. Thanks for calling.
Caller: Hi, this is donna, and I'm a federal employee. I have an adult child that is paralyzed that lives in the home with us. We are his primary caregivers. Am I excluded for applying for any benefits for him because this is a pre-existing condition?
Doris McMillon: Phyllis? Or Frank? Phyllis?
Frank Titus: Well, by "adult," I assume that you mean more than 18, which is the age specified in our law. But unfortunately, it's unlikely that an adult child with the condition that you described would pass the underwriting. The underwriting for adult children is full underwriting with many medical questions. Based on your description of the condition, I'd say it's likely that your child would not qualify for the insurance, but again, as I mentioned to an earlier caller, the good news is that if you purchase a policy, there will be assistance and discounts available to you as the caregiver.
Doris McMillon: All right, thank you. Thank you, donna, for your call. Let's go to nashville, Tennessee. Please, go ahead, nashville.
Caller: Yes, my question is will there be an annual open-season enrollment period for long-term care as there is currently for the federal employees health benefit program?
Frank Titus: No. Long-term care, by its nature, is long-term, and you're signing up, basically, with Long Term Care Partners, which is the company that John Hancock and MetLife created to administer this program and exclusively administer this program. And we expect to have a very long-term relationship with Long Term Care Partners. This is not like health insurance, so you'll sign up, and you'll sign up, basically, for life until you go into a claim status. We may have an open season downstream for people who don't sign up during the open season in july, but anyone will be able to sign up after that if they go through full underwriting. The abbreviated underwriting is available for employees only during the open season.
Phyllis Shelton: Can I add to that? Having worked in long term care insurance myself for about 12 years, I just want to say that the federal family is so fortunate to have this opportunity. You've got the light underwriting, very simple underwriting for the employee, the employee spouse, and you're going to have very reasonable premiums compared to what's on the marketplace. So as soon as you all can get it, I would encourage you to do it. It is a wonderful thing that the government is doing.
Doris McMillon: We have Washington, D.C., on the line. Please go ahead.
Caller: Yes, my question has to do with the premiums. Would they be non-taxable like the current federal employees health benefit plan premium?
Frank Titus: No. Section 125 of the internal revenue code specifically addresses long term care insurance premiums and says that they are not subject to premium conversion or to use of flexible-spending accounts. So unfortunately, under current law, your long term care premiums are paid for completely by after-tax dollars. The only exception is those of you who are unfortunate enough to have incurred more than 7.5% of your adjusted gross income in medical expenses. The long term care insurance premiums count toward that 7.5%, and if you exceed it, they become deductible. The other good news is there is a move afoot in congress to make long term care premiums an above-the-line deductible item.
Doris McMillon: Let's take another call. Buffalo, new york, you're on the line.
Caller: I just have a question. How does long term care insurance benefit a home caregiver? Say my husband was covered and he gets injured and I'm taking care of him at home. What kind of -- how do the benefits kick in? Do I get paid or does it just help pay for someone to come in or how does that work?
Phyllis Shelton: Thank you, new york. It helps you because you get some sleep. That's a real quick answer. Just think, not any of us can provide 24-hour-a-day care, and if you had this policy, it could pay for someone to come in and help you maybe 8, 10, 12 hours a day, depending on how much benefit you buy, which means that's the number of hours where you get to keep your sanity. It's not set up to just give you a check, but it will pay for the caregivers. You might get them from a home-health agency, licensed professionals, but the point is, you're getting help, and it's not totally on your shoulders. Frank, does early enrollment lock in the current age for rate determination?
Frank Titus: Yes, it does. Your age will be determined on the date that the application is received by Long Term Care Partners, but this is not, in and of itself, a reason to rush toward the early-enrollment opportunity. It's more important to be well-informed about the product and to make an informed decision than to save a few dollars a month by enrolling early for a product that you're not well-acquainted with.
Doris McMillon: All right, thank you. We only have about a minute or so left. Gail, what is the average length of a stay in a nursing-home facility?
Gail Hunt: The average length is about two, two and half years that somebody stays in a nursing home.
Doris McMillon: And "long-term" is a relative term. What is long, and what programs other than insurances cover lesser-term care?
Phyllis Shelton: I might speak to that a little bit. With the insurance policies today, you're expected to need help at least 90 days. That's sort of like the cutting point that it turns into long-term care, okay? So anything beyond that, you're taken care of.
Doris McMillon: All right, thank you so much. Can you believe it? We have just about run out of time for this broadcast, but you will have plenty of opportunities to learn more about the Federal Long Term Care Insurance Program in the months ahead. I'd like to thank all of my panelists, and I thank you, our viewing audience, for joining us today. If you have any further questions about the federal long term care program, please visit us at our website at www.opm.gov/insure/archive/ltc. Or if you'd like to register for a free bulletin series on long-term care, please give us a call at 1-800-582-3337. I'm Doris McMillon. Thank you so much for joining us, and have a great day.