Federal Long Term Care Insurance Second Satellite Broadcast Transcript

Kay Coles James: Hello. I'm Kay James, Director of U.S. Office of Personnel Management. It's a pleasure to welcome you to OPM's second satellite broadcast on the new Federal Long Term Care Insurance Program. These broadcasts are part of our ongoing effort to educate all of the Federal Family about long term care insurance.

Our first broadcast in March focused on the nature of long term care itself. Contrary to popular belief, it's not only an issue for the elderly. More than 40% of those who need long term care are under the age of 65. The types of care required can vary, including assisted living facilities and in home care. Because traditional health insurance does not pay for most long term care expenses, the cost can and often does result in financial devastation for American families.

That's why I want to encourage you to have a plan for meeting those potentially devastating expenses. Today's broadcast focuses on a promising option to pay for these expenses--long term care insurance. Think for a moment about the other types of insurance many of us have. We buy homeowners insurance, although frankly most of us will probably never have major damage from a house fire, hurricane or tornado. We buy car insurance although most will never experience more than a minor fender bender and shopping cart dings. Regardless, we all recognize the potential hazards and as responsible, accountable adults, we prepare accordingly for the unforeseen accidents that may lie ahead. At the same time, statistically, there's a much higher probability that you and I will need long term care at some point in our lives. And the consequences of not being prepared can be dire.

For many of you, long term care insurance may be a new idea and you may wonder whether it's something you really need. As consumers of insurance products, you need to inform yourselves of potential options that are available to you. Long term care insurance will not relieve you of your responsibility to family but it is an important tool for limiting the financial risk to your family's future income, savings and assets.

Our panel of experts will help you evaluate whether long term care insurance is right for you; what you should look for in long term care insurance policies; how much insurance coverage you should buy; and how the new Federal Long Term Care Insurance Program can meet your needs.

I personally believe that this is a very good program. So good, in fact, that I already signed up, becoming the first charter member when our early enrollment period opened in March. There are many reasons why I decided to purchase coverage under the Federal Long Term Care Insurance Program:

I am familiar with the market and this is a good value.
It's sponsored by a partnership of known and trusted insurers, John Hancock and MetLife.
The Federal Long Term Care Insurance Program provides flexibility and choice--each of you can personally tailor your individual plan and decide what coverage is best for you.

But the most important reason I signed up comes down to family. I told my children that I was going to put my insurance certificate in their Christmas stocking because it benefits them as much as my husband and me. Through this act of personal responsibility I'm reducing a potential future burden on them and their families. Long term care insurance gives my family security and peace of mind.

I sincerely believe that as you learn more about the Federal Long Term Care Insurance Program you will share my enthusiasm about the opportunity to participate. I'm confident that this innovative program will become the largest employer-based long term care insurance plan in the nation. 20 million members of our Federal Family are eligible to apply, including Federal and Postal employees and annuitants and members and retirees of our uniformed services. And of course, all of their qualified relatives.

I've told you why I decided to apply, now let's hear from some other people about how long term care insurance has helped them to plan for their future.

Senator John Breaux (D-LA): Insurance for long term care gives you the knowledge that when you reach that point in your life when you need the care that it will be there. That someone, some group of people providing the services that you are going to need will be there for you. It's a good investment and one that I think all Americans should consider very seriously.

Sally Schloss: One of the features of long term care insurance is that it gives me choices. And it means that I won't be a burden and my husband won't be a burden to our kids. And we won't go through the same kind of anxiety and decision making process that we as a family had to go through in regard to my own mother.

Suzanne LaFond: You work a lifetime to accumulate a little nest egg, some of them are bigger than others. And mine was fairly little. And I thought, you know, in less than a year that thing could just evaporate.

Bob Goldstraw: We can't predict potential disability or injury to ourselves. We're not necessarily talking about somebody about the age of the 90 it could be 40 or 45 or 50. How many people have half a million dollars in the bank to cover this kind of need of home care, nursing home, this kind of thing? So I think to not have it is really pretty foolish. I personally would feel nervous without it, really.

David Lawrence: I think the way our mind set is today, long term care means care for elderly.

Kathleen Lawrence: Nursing home.

David Lawrence: Nursing homes, yeah. We don't -- my mom worked for 35 years with the hospital and she would come home all the time with, oh, I admitted the poor soul today had a motorcycle accident, he's paralyzed from the waist down. We don't think of that as young people. We think that our lives are going to just -- wake up tomorrow and going to be as we are today. And that's not necessarily so.

Leslie Hegamaster: I am 49 years old. I am single and I feel that it's really -- my responsibility to make certain that my continued well being in any circumstance is taken care of. I think that as you go through life, I think it's very important that you look to the people you care about for emotional support, not financial support.

Doris Werwie: I'm a single parent, and I'm expecting the cost of long term care is going to get much more expensive as I get older. And I don't want my daughter to have to spend all of her inheritance on me, I'd like her to have some of that. So it's a way of my managing my wealth in a good way.

Jennifer Williams: In my view, long term care will be at home as much as possible, in a professional nursing home situation if necessary. But in any case, I'm probably going to need some help physically and I'll probably need help financially. So long term care insurance seems like a logical choice.

Jack Curley: We needed long term care insurance because of the family history. We faced life threatening illnesses already ourselves, even at this age. And it's a no-brainer for us.

Senator Charles Grassley (R-IA): You think of long term care as just being nursing home care. But quite frankly, when you buy insurance it can be very flexible. It can be for family caregiving. It can be for home health care. It can be for assisted living outside of your home. In another environment short of a nursing home. So it gives a great deal of options to you so that you can have as much independence and higher quality of life as you go through the process of making a decision of going to a nursing home. Quite frankly, I've never met one person in my life that ever said, I'm just dying to get into a nursing home. Well, some people don't have a choice. Long term care insurance gives you a choice.

Doris McMillon, Moderator: Hello, I'm Doris McMillon. Welcome to the second in our series of three broadcasts designed to help inform you about long term care insurance. Our goal today is to provide still more information, to help you feel confident and comfortable in deciding whether you need long term care insurance coverage, and if so, what types and amounts of coverage are best for you.

As we learned in our last broadcast, traditional health insurance programs such as FEHB, TRICARE, TRICARE For Life and Medicare do not cover most types of long term care. Moreover, with the extended life expectancies of folks today, the potential need for long term care has increased dramatically. Because long term care is one of the largest uninsured financial risks facing Americans today, OPM wants to be sure you are well prepared to face this challenge should the need arise.

Today, our distinguished panelists are going to provide insight into such questions as, who should or should not purchase long term care insurance? What should I look for in a long term care insurance policy? How much coverage should I buy? And how does the Federal Long Term Care Insurance Program fit into all this?

And now I'd like to turn to our panel of experts for today's session. It is my pleasure to introduce to you, first, Ms. Priscilla Thayer Brandon, Editor, Kiplinger's Retirement Report. Priscilla has been covering investing, taxes, health care and estate planning for those 50 and older for Kiplinger's retirement report since 1995. She has been studying and writing about personal financial issues since joining the firm in 1971. We're very delighted to have you with us today.

Priscilla Brandon: Thank you.

Doris McMillon: Next we have Susan Polniaszek. Susan is the Senior Policy Analyst at the American Association of Homes and Services for the Aging. She earned her masters of public health at the University of Michigan and has nearly 30 years of experience in health care. She has analyzed Medicare, Medicaid, Medigap insurance and long term care insurance and has written four books and numerous articles on health care and long term care financing. Susan, welcome.

Susan Polniaszek: Thank you.

Doris McMillon: Then we have Mr. Ric Edelman of Edelman Financial Services. Ric is a best-selling author, holds four professional designations, hosts two award-winning radio and television shows, writes a syndicated column, publishes his own newsletter and offers a financial education website at ricedelman.com. He also has received both an honorary doctorate from Rowan University and two U.S. patents. We are very pleased to have you with us, Ric.

Ric Edelman: Thank you, Doris.

Doris McMillon: And finally allow me to introduce returning panelist Frank Titus. Frank is Assistant Director for Long Term Care in the U.S. Office of Personnel Management. He has been working on the government's retirement and insurance programs for 30 years and is currently directing an office devoted to implementing OPM's newest and largest benefit program, the Federal Long Term Care Insurance Program. Frank, welcome back.

Frank Titus: Thanks, it's good to be back.

Doris McMillon: To all of my panelists, a warm welcome to you for being with us today. Now, let's begin today's discussion with Priscilla. Priscilla, you're going to address one of the trickier questions before us today, who needs long term care insurance?

Priscilla Brandon: Thanks, Doris, almost every adult needs to consider long term care insurance at the right time, and here's why: health insurance is intended to help you obtain the care and service you need to fully recuperate from an accident or sickness. If you go to visit the doctor because you have bronchitis your health insurance will help cover the costs of the visit and pay for your antibiotics. Long term care insurance, on the other hand, is designed to pay for care pays for the cost of ordinary activities of daily living such as bathing and dressing. It can also help if you have an accident, a stroke or you develop some kind of disease like multiple sclerosis and you need help and supervision in managing your care.

Doris McMillon: Now let's say with long term care insurance you're basically protecting yourself from a financial disaster, correct?

Priscilla Brandon: That's right. Long term care insurance really is designed to protect you from the catastrophic costs of care not covered by ordinary health insurance. These are the kinds of costs that really can wipe out your savings.

Doris McMillon: Let's talk about Medicaid in relation to long term care.

Priscilla Brandon: Some people believe that the federal government pays for long term care. And it is true that if you spend your savings on care and you may qualify for a federal-state program -- welfare program called Medicaid. And for older people, Medicaid does pay for nursing home care but qualifying for Medicaid really takes away a lot of choice. Most people would like to have choice. You don't choose your nursing home, you don't choose care at home. You can't choose to move into that attractive assisted living facility in your neighborhood.

Doris McMillon: What do you need to be concerned about before you buy long term care insurance?

Priscilla Brandon: Well, of course long term compare insurance is an important way for most of us to secure the care that we need. But one of the most important things is to make sure that you can afford to pay the premiums now and in the future. And I know that this is something that Ric will be addressing the affordability issue later on.

Doris McMillon: Perhaps you can give us some examples of situations where long term care insurance could fit into people's lives. For example, what about the person who just gets his first real job?

Priscilla Brandon: For a young person just starting out, their primary goals and priorities are going to be investing in a career. That means going to night school, doing whatever they need to do to make sure that they have a successful career and earn the kind of money that they would like. They also need to start a systematic savings program, because nothing is going to take the place of saving now for your retirement in the future.

Doris McMillon: Let's say that -- I guess you could say that owning long-term care insurance isn't a bad idea?

Priscilla Brandon: Owning -- buying a long term care insurance policy is worth considering as soon as you have a secure job and a comfortable income. The younger you are, the lower your monthly premiums. So, for example, if you're in your 20s, the cost is -- monthly cost would be approximately what you might spend on a date or taking a couple of friends to a movie and pizza.

Doris McMillon: Think parents would pick up the tab?

Priscilla Brandon: Some parents might want to consider picking up a policy for your young adults and then as soon as they're in a stable job they might consider the kids would pick up the premiums at that point.

Doris McMillon: Now, a person's needs and priorities are going to change, especially after they marry. What is your advice for that situation?

Priscilla Brandon: At this stage it's really important to make sure that you have enough disability insurance, health insurance, life insurance in case an illness or accident takes you out of the workforce. It's also time to start that serious retirement savings program, if you haven't already done so.

Doris McMillon: And marriage, with marriage comes families. Where does this put long term care in the pecking order of the financial situation?

Priscilla Brandon: Well, young families have a lot of financial responsibilities and a lot of financial needs. Obviously the things have I've already mentioned or important but most young couples would start looking at saving for a home of their own. When the child arrives, of course, then they start thinking about saving for college. But if you have a stay-at-home spouse, you might take a look at long term care insurance to protect that spouse from -- and yourself from catastrophic accident or illness.

Doris McMillon: What about the people near or into their 50's, they have savings, where does long term care insurance fit in for them?

Priscilla Brandon: Definitely in your 40's and 50's it's time to learn about long term care insurance. And plan to buy it. If you haven't done so by the time you reach your mid 50's, shake a leg, it's time to do it. I think in their 50's I think a lot of people think, well, the kids are off on their own and now I'm going to really chunk money into retirement savings. And I think they can look at long term care insurance as a way to protect the nest egg they have already built and to make sure that if something happened they would continue their retirement savings.

Doris McMillon: Now, what about those who are really close to retirement. Is it too late for them to consider long term care insurance?

Priscilla Brandon: Definitely not. I think it's really late 50's all the way to 65 is really prime time for buying long term care insurance. Obviously the premiums continue to go up a little bit but still very affordable for most people. And the big thing is you have to be in fairly good health.

Doris McMillon: I did not shake a leg when I was 55 now I'm 70 and I need some long term care insurance, is it too late?

Priscilla Brandon: It's definitely not too late. It's more expensive. But if you're in fairly good health, you probably can get quite a good policy. And if you find the policy that you like and it's a little bit steep, you might consider having your kids chip in. They might be quite willing to do so. I'd like to end with a couple of points. I wanted to say that I think a good way of thinking about long term care insurance is think of it as a way to pay for the care you need when and where you need it. Also, once you really need long term care insurance, you can't buy it.

Doris McMillon: That would be unfortunate. Thanks. So, in effect long term care insurance can benefit people at all stages of adult life from the young to the old. For catastrophic accidents or simply to manage the effects of old age. And it is best to start early, of course. But it seems that it's not too late to benefit from long term care insurance at any stage of life. So thanks again, Priscilla.

Now the next panelist we'll hear from is Susan Polniaszek. Susan is going to help us understand what to look for in a long term care policy. The nuts and bolts and features to consider when selecting your policy. Susan, welcome. What are the some of the most important features to consider?

Susan Polniaszek: Thanks, Doris, I'm glad you asked that. The most important feature to look for is the company itself. You want to find a company that is a financially secure and reliable company. If you don't, the promises and benefits may not be there when you need them.

Doris McMillon: What else?

Susan Polniaszek: The second most important feature is flexibility in the policy. There is no "one size fits all" what is right for you may not be right for someone else. Therefore you want to buy policy that is going to be meet your needs. Considering your health status, your financial resources, your family situation, longevity in your family, all sorts of things; and you need to have something that fits your needs.

Doris McMillon: You said you also need a policy that provides coverage for --

Susan Polniaszek: You need to make sure that the coverage is going to be there when you need it. For instance, you want to make sure that the long term care that the policy will cover, if you have a physical impairment, that you are unable to do the activities of daily living. Such as the bathing, the walking and the dressing. You also need it in case you have a cognitive impairment, from dementia, most common one being Alzheimer's.

Doris McMillon: Now, fitting our individual needs I know is important. So out can people buy the right amount of insurance, in other words, how much insurance is enough?

Susan Polniaszek: There are four components of the amount of insurance to buy. The first one you look at is the benefit amount. You want to buy a policy that will pay for the most expensive long term care service, that is nursing home. You probably have some income, but your income and policy should cover the daily rate of nursing home that is in your area, that you would want to go to.

The next component is inflation option. Because you're buying this today, and you're not going to need it for 10, 20, maybe 30 or 40 years from now, you want to make sure that the benefit amount will keep pace with inflation. And there are three kinds of inflation. It's important to understand the difference between compound inflation and simple inflation. Compounded is what you want. Not the simple inflation. The other option is to buy additional benefit amount later in life. That option looks good when you're younger. But it can be very quickly more expensive in the long run. Again, you really need to crunch the numbers and pick what is right for you.

Now, once you have the benefit amount and the inflation factor, you then pick the benefit time period, length of time. When do you that, what you're looking for is something that's affordable. You can go from two years, three years, four years, five years, lifetime. Now, everyone knows someone who stayed a long time in a nursing home or long time needing long term care. But you have to be very careful buying that lifetime policy. Because it can be very expensive. And again you want to make sure that policy is affordable today as well as into the future.

Doris McMillon: Now, I think one of the key questions for me is the deductible or the elimination period.

Susan Polniaszek: Well, that's the amount of time that you pay for your long term care before the policy starts paying. And it should be, if you have enough funds you can have a lower premium if you get the the 90 day or 100 day elimination period or deductible period. Same thing like any insurance.

Doris McMillon: Of course the next question is, what are the basic services that a long term care insurance policy should cover?

Susan Polniaszek: Well, you want to make sure that the policy covers the full continuum of care. We all know about nursing homes. I said that's probably the most important because it is the most expensive continuum of care. You want to be sure that the policy covers nursing home, because it's such a catastrophic expense and that's what you really -- the insurance is there to protect you for. You also might want to have the policy cover assisted living. Now, there is no one definition for assisted living and every state has their own definition. Therefore, you want to make sure that the policy has a broad definition for assisted living. Assisted living really provides the personal care, the help with activities of daily living, supervision if you have cognitive impairments and you want to make sure that those services can be provided either by staff of the assisted living facility or in some cases bring in an outside home healthcare agency.

Doris McMillon: And speaking of the word "home," what about care at home?

Susan Polniaszek: Well, most people would prefer to have care at home. There's no doubt about it. And you have to understand all the different options there are in care. It's not just home care, but home and community care. Home health is the skilled care. That's an R.N., therapist, et cetera. But Medicare pays for that. But they only pay for it if you have intermittent needs. It does not pay for it if you need 24 hour a day nursing care. Nor does it pay if you need daily care on a continual basis.

Doris McMillon: Home care?

Susan Polniaszek: Well, home care is kind of the supportive services, the personal care given by aides. Again, activities of daily living, helping with the supervision if you're cognitively impaired. It also can help out with some of the supportive services, chore services, light housekeeping, preparing meals, et cetera.

Doris McMillon: Modification?

Susan Polniaszek: Well, modifications are important, if you want to stay at home, you may need to do some modifications to your home. Ramps, grab bars, things like that so you can stay at home.

Doris McMillon: What about adult daycare?

Susan Polniaszek: Adult daycare is a program where you go, you live at home but during the daytime you go to a place where they can provide social services as well as healthcare needs.

Doris McMillon: If you're single?

Susan Polniaszek: If you're single -- home care can be less expensive than nursing home or assisted living. If you have a caregiver you can use home care. But if you are a single person it's very difficult to be able to totally utilize the home care benefit.

Doris McMillon: Are there any other features we should know about?

Susan Polniaszek: There are variety of features, we could spend all day talking about different features. Two that you might see in policies is a care or case management. And this is not a gate keeper, this is not someone -- something preventing you from getting care. It's to help you to figure out what kind of care is available and where to get it. Another feature that some policies have is what they call preferred providers. They will have a list of providers. That can be somewhat restrictive, you have to be careful with that.

Doris McMillon: Great information, Susan, thank you so much. That's for people needing to zero in on exactly what they should be looking for as they consider long term care insurance. Now that we know more about what to look for in long term care insurance, Ric Edelman is going to discuss with us how much coverage we should by, Ric, welcome. How much coverage should we buy?

Ric Edelman: It's probably the most dicey of all questions because you can buy a contract with as little as $50 of daily benefit all the way up to $300 or more in daily benefits. Obviously the more coverage you buy the more expensive it is. So we take all Americans and put them into three broad groups: the rich, poor and the rest of us. And most of us fall into that "rest of us" category. The rich don't have to worry about it--they can afford the care. The poor don't have to worry because they're covered by Medicaid, the federal health plan for the poor. They're not really of tremendous conversation here either. It's the rest of us, the middle class, the Americans who are working and accumulating enough money for retirement. They're the ones that face the risk of spending what is a national average of about $4,000 a month if you really do need the full care.

Doris McMillon: Now, once we understand the economic factors that are involved in the decision making process, how do we go about determining what our specific needs are?

Ric Edelman: Well, you need to look at what cost is in your area. Because it varies widely all across the country. In urban areas, major metropolitan cities the cost is going to be very different than in rural areas. So take a look in your local community and find out, just make phone calls to the local nursing home community, talk to local healthcare agencies and ask them, what is the average daily cost of care in this area. It can vary widely --it can be be $120 a day, it can be $300 a day. Depending on where you're living, what kind of care that you might need.

Doris McMillon: To clarify then, what becomes critical is exactly how much coverage is needed and how much is affordable at an individual's particular economic level.

Ric Edelman: And that's the key. Because it's easy to say we want you to have $150 worth of daily benefit, and we want you to have that for a six-year period of time. That is easy to say. The problem is that that costs x amount of money. You might not be able to afford that. Okay, if you can't afford that should you ratchet down the amount of money per day or reduce the number of years that you have coverage? You can save money either way, but at reduced benefit. So you've got to look at a combination of what you can afford versus what you need in the context of the family's total situation. We're primarily concerned with the spouse as much as the institutionalized patient.

Doris McMillon: Great. And we want to thank Ric for giving us all some perspective and the specific rules to best follow to balance our future needs with our ability to provide for them. And now that brings me to a really big question that's probably on the minds of everybody watching this program. What do you think about the role the federal government's plan can play in the lives of its workers, do you think it's a good idea? Or not such a good idea, Ric?

Ric Edelman: Yes. Without question, the new federal program is much needed benefit that I'm really excited to see in the marketplace. It's raising aware ness to a degree that we didn't have before. And the product that the government has put together in conjunction with the private sector is very, very good. And without question, you definitely need to be considering it as you shop around for long term care. Don't assume that the federal program is the only one to look at. Also don't assume that it's not any good because it's coming from the government, how good can it be. Absolutely, it is very competitive for a lot of folks, the best choice.

Doris McMillon: Thanks a lot, Ric, for those frank comments. I think that is the kind of input our viewers need to hear. Now I'd like to turn to our final panelist, Frank Titus who is going to give us overview of how the Federal Long Term Care Insurance Program works, who can apply, and how we can help anyone who is interested in becoming involved with the program. So, Frank, it sounds like long term care insurance is something that many of us really ought to be thinking about. Tell us who is eligible to apply for the Federal Long Term Care Insurance Program?

Frank Titus: Well, Priscilla did a great job of taking us through the stages of life and talking about who ought to be thinking about long term care. And our eligible population is very large. We've got a graphic up that shows the eligible population. We think that total number of individuals eligible is about 20 million. Now, most of our viewers today are active federal workers and members of the uniformed services. I would like to encourage them to really reach out and contact the parents and parents-in-law who are eligible and also be alert to the fact that adult children are eligible. I was in a conversation with a lady named Truda the other day, she had no clue she was eligible for the program. Turns out that she is the adult child of a woman who was married to a deceased federal retiree, so she was eligible. Had no clue she was eligible.

Doris McMillon: When can the federal family apply?

Frank Titus: Well, we had an early enrollment period which basically ended today. And our regular open season will begin July 1 and end December 31. We're doing sort of a new thing during the open season. No one is going to age during that period.

Doris McMillon: That's right.

Frank Titus: No one at all. Everybody is going to be considered the age they were on July 1 no matter when they sign up during the open season, so folks can take their time, can attend one of the thousands of workplace meetings we're going to be having. But it's important to remember that if you're one of the more than 800,000 people who have signed up for our newsletter, you still need to request an application. So at the end of the show we'll be showing toll free numbers, giving information about how to do that.

Doris McMillon: Have those pens and paper ready. We've heard today about what people shopping for long term care insurance should look for. What does the Federal Long Term Care Insurance Program have to offer?

Frank Titus: You know, Susan said the most important thing was to look at the companies that are providing the insurance. And I think she's right. And that's why OPM went through a very competitive process, a very rigorous process and selected two of the strongest insurance companies in the United States, John Hancock and MetLife, who came together and formed a jointly owned company, Long Term Care Partners, to offer this product. These are top-notch companies and we're just very glad that we partnered with them and they're helping us roll out this program.

Doris McMillon: I know we've heard from several of our panelists, is that it's critical to be able to afford the coverage that you purchase for years to come. How does Federal Long Term Care Insurance Program address that?

Frank Titus: Well, Susan said there's no such thing as one size fits all. And that certainly true and certainly recognized in the design of our program. You can choose a prepackaged plan and we've put together four different packages for people to look at during the open enrollment period. Or you can customize a plan. You can have a facilities only plan or a comprehensive plan and we have a very, very wide range of benefit options. If you want to customize your own plan, you can start with the benefit as low as $50 a day or go up and $25 increments all the way up to $300 a day. If you have choices in terms of the kind of inflation protection you want. You have choices in terms of three-year policy, a five-year policy or unlimited benefit period. As Susan pointed out I think Ric did too, you can also influence the affordability by choosing between a 30-day or a 90-day waiting period.

Doris McMillon: We've heard some of the factors people should consider in deciding how much coverage to buy. Can the Federal Long Term Care Insurance Program offer assistance to people with trying to figure all this out?

Frank Titus: Sure. Both Ric and Susan talked about finding out what the cost of care is in your area and I think Ric mentioned you can call a couple of nursing homes. You may not be planning on retiring where you live today and work. So what we have is we have an 800 number you can call. We have websites and we have people who can identify the cost of care, both assisted living and nursing home care in the area that you're interested in. And we have that website on the screen. And you just click on a state and pick a city and it will show you the cost of nursing home and assisted living care.

Doris McMillon: Great. Thanks a lot. I'd like to know if there's anything else that you would like people to know?

Frank Titus: Well, we have information numbers for folks to call. We will have a new website that will be introduced later in June. June 25 it's scheduled to come up. And stay tuned. Subscribe to our newsletter and be alert for the meetings that we'll be having across the country.

Doris McMillon: Okay. Thank you very much. We've learned a lot today, from what to look for to how to pay and whether or not to purchase to what the Federal Long Term Care Insurance Program has to offer. A lot of really good information.

But now this is the moment that you all have been waiting for, your turn to ask the questions.

I do have some questions that have already come in. Ron called in from St. Louis, or actually e-mailed in, and he says, you know, I don't have any heirs and I really don't care about preserving my assets to pass along to someone else. Why would I need long term care insurance? Who would like to take that?

Ric Edelman: I'll give two answers. First, potentially Ron, you don't need any long term care insurance if you have enough assets to pay for the care if and when you eventually need it. But I'll take it a step further. If you don't have any heirs or leave your money to, who is going to get it? Have you thought about giving it to charity? If so, go to the charities now, I'm willing to bet that they will buy the long term care insurance on your behalf out of their pocket in exchange for you leaving your assets to them. So even though you might not have any direct heirs there is the community and local charities to think about.

Doris McMillon: Anybody else like to comment on that? Ron, you can send it to me!

We have another question. John has e-mailed us from Phoenix. If I buy long term care insurance when I'm younger, the premiums will be lower. But I'll be paying them longer, so wouldn't I save money by waiting to buy? Susan?

Susan Polniaszek: Because I crunched the numbers. You will find if you look at the policies and what they cost and you crunch through the numbers today saying you're buying at age 40, 45, and you've got maybe $500-$600 a year you are going to pay for that longer. If you wait until you're 65 or 75 that same policy could be thousands of dollars and ultimately, although you pay for a short period of time, it will be more expensive. So once you have saved enough money and you are at the right stage, buy it when you're younger so that you're going to save money in the long run.

Priscilla Brandon: And that also protects you in case you have something completely unexpected happen to you fairly soon. Most people expect to live until their 80's before they need help. Sometimes it doesn't work out that way.

Doris McMillon: I think as we saw in the video that opened in our program, one couple was talking about the fact that they had someone who had been in a motorcycle accident, so I guess we all want to think we're eternal.

We have another question that comes to us, it says, if for some reason the company experiences financial difficulty, as has occurred with insurance companies from time to time, what assurance is there that obligations to me will be met under the Federal Long Term Care Insurance Program? Frank?

Frank Titus: Well, there are a couple. One thing is that we structured the program so all of the income, all of the assets associated with our program are held completely separately and apart from the company's other assets and they're not available to meet any obligations other than those associated with our program. Now, should a company go out of business, what we would do is of course our assets would be conserved and we'd have a recompetition and we'd select a new carrier. The new carrier would assume the assets and would take over the policy hopefully that process would be essentially transparent to our policy holders. The benefits would be the same, hopefully the premiums would be the same and it would just be a program being brought to you by a different set of insurers.

Ric Edelman: There's no real way to answer it with absolute certainty, but I can tell that you the steps that Frank and his team have taken at OPM make that risk as low as humanly possible. And I don't believe that the risk is one that should stop you from buying long term care insurance.

Doris McMillon: Absolutely. Let's take a telephone call we have Cecile calling from Florida. Go ahead with your question.

Caller: Yes, I'd like to know if you pick your characteristics and benefits that you would like during the first open season and then decide a year or two later that you'd like to change something will you have that opportunity?

Doris McMillon: Frank?

Frank Titus: Yes. We do have policy upgrades and downgrades available. Policy upgrades depending on what it is you want may require you to undergo another round of underwriting to make sure that you remain insurable. Policy downgrades would not require underwriting.

Doris McMillon: Thank you for your question. We have Pat calling from Alabama. She says, I already have a long term care insurance policy, but now I'm not sure it's enough. Should I buy another policy? If so, should I keep my old one? Ric?

Ric Edelman: Maybe. In many cases we find folks that have bought policies many years ago, five years ago, ten years ago and the costs of long term care have grown in the interim and maybe the policy you bought then isn't enough for what you need today. So what you should do is go back to the agent who gave you the policy in the first place and have them compare what you currently own to what you should own if you were starting from scratch today. And then determine if you should either add on a second policy or replace the first one with a brand new second policy and be sure to include a comparison of the federal program now available. Because it might very well be the best deal for you. Keep in mind you're older now, which means the inherent cost will be higher. So keeping the existing one and adding on might prove to be the best approach.

Doris McMillon: Let's take another call, Joyce is calling from Michigan.

Caller: Hi. I'm calling regarding asset protection. My concern is, if you were to have a long term policy for the five-year period and you were to begin receiving the care and outlive your five years--you are in a nursing home and it's past your time. Must you then begin using your own assets to keep your care in effect in that particular nursing home? Or prior to the five years can you assign your assets to your family members and then use Medicaid to continue your care there?

Doris McMillon: All right. Priscilla?

Priscilla Brandon: In most cases would you begin spending down your assets. There are a few states that have programs that you could use, they're called partnership programs where you might be -- if you purchase it long term care policy of a certain size, you can protect your assets once you have spent-- used up your policy benefits. But in most cases you would begin to spend down. I really don't know exactly what your situation would be in your state as far as Medicaid is concerned. Perhaps one of the other panelists know a little bit more about Medicaid.

Doris McMillon: Susan?

Susan Polniaszek: I personally do not believe that we -- that should you transfer your assets to other people in order to be eligible for Medicaid. I think that is wrong. But there are laws that you have to consider. There is a federal law governing transfers--you'd have to consider that. But for the most part if you've got a five-year plan, long term care, the vast majority of people are going to have their long term care coverage totally covered by that five years. There will be some that certainly some people will stay very long in a long term care situation in which case your assets would be used to pay for the care after that five years are up.

Doris McMillon: All right. Thank you very much. Let's take another question. We have Jane calling from Des Moines, Iowa, thank you for calling.

Caller: -- --

Doris McMillon: Jane, we'll take your question.

Okay. I'll go to another fax here. This question is from Carmen in Michigan. Will individuals who elect long term care during the early enrollment period be locked into those premiums or are the premiums subject to change in the fall and in the future? Frank?

Frank Titus: Well, if you bought during the early enrollment period, which I did, then you may have benefited from getting a slightly reduced premium if you have a birthday, as I do, that falls between the end of the early enrollment period and July 1, when all the birthdays get frozen. Now that premium is basically designed to be level for life, assuming you bought the built-in inflation protection. During the open season that begins in July, if you want to modify your coverage, you're free to do that and pick any of the options that become newly available during the open season, which includes, for example, an unlimited benefit. Now if you do make a choice and choose a richer benefit, you will be paying a higher premium. But that premium will be based on your age when you acquired your original policy. Not your age on July 1, should that be different.

Doris McMillon: We have Christina on the line from Portland, Oregon, please go ahead, thanks for calling.

Caller: Hi, you're welcome. If I enroll in a policy and -- okay, if I enroll in a policy, what kind of help is available for my relatives? Like I know that if my parents didn't pass underwriting-- I remember that they were talking about it before saying that there was some kind of benefit that we could as enrollees ourselves help our parents? What is available out there and --

Doris McMillon: You mean in the long term care insurance?

Caller: Correct.

Frank Titus: Well, one of the points that Susan made, I know Priscilla has had experience with this personally is care coordination. Care coordination is an important part of the federal program. And it's available not only to you as a policy holder, but because you purchased a policy it's available to your qualified relatives, such as your parents. And so that program is available to counsel you and them and help make arrangements for care. Including accessing preferred providers that Susan referenced. And accessing other providers that provide discounts. And perhaps, Priscilla, you'd like to share with us the experience that you had.

Priscilla Brandon: Yes. My mother had a long term care insurance policy which I was helping pay the premiums on. And one of the -- when she developed early signs of Alzheimer's disease and one of the huge benefits that I discovered was that when I called the agent he said, well, you know that you can call in a geriatric care manager to assess your mother and also they were incredibly helpful in suggesting where, what kind of assisted living facilities would be appropriate for her needs, what kind of person she was and that also suited my needs, which were very important because I felt that being able to see my mother every day was almost as important as anything.

Doris McMillon: Thank you very much for your call. I have a fax here, W. Rankin, says, how about guidelines, some formulas, assuming local nursing home costs $125 per day how do we decide how much we should plan on providing from savings, income, how long should the policy pay, et cetera.

Ric Edelman: Assuming you're married, I would -- if you're looking at the cost of care of $125 a day, I would get a policy that pays 100% of that. Keep in mind that if you need the care, let's say that you're in a nursing home needing care, your spouse, the community spouse is still living at home with the full expenses of the household. The mortgage and food and car and clothes and travel and insurance and all the other expenses. And that is what makes long term care costs so devastating for the family. Picture you're retired you're your lifestyle as it is. All of a sudden you have an extra $4,000 a month not tax deductible that the family has to deal with. So have 100% of the costs covered. There's no reason not to. Only if you can't afford that should you begin the notion of ratcheting down the amount of coverage simply because of affordability.

Doris McMillon: Susan, did you want to --

Susan Polniaszek: You're absolutely right. If you're in a couple situation, you really need the full cost covered because you do need your income for the spouse living in the community. If you are a single person, however, then you say, okay, I have $50 a day that I could use my income to pay for long- term care and that $50 plus the insurance would then pay the $125. So would you need $75 of benefit. You have to consider both. But again in the couple situation you really need to have the -- should have the full coverage.

Doris McMillon: Okay. We have Bronna on the line from Bethesda, please go ahead.

Caller: My question is, if you choose the option to increase your coverage later rather than the built-in inflation protection, number one, do you have to go through underwriting again if you decide to increase your coverage? And is there a limit to how many times you can increase your coverage?

Frank Titus: I'll take that one. What you are talking about is what we call the future purchase option. And under that option basically every other year you'll be getting a notice from Long Term Care Partners that tell you that the -- that the medical CPI has gone up by seven or ten percent, what have you. And your $100 a day benefit that you purchased originally is going to increase to $110 a day. And your premium is also going to increase. Now that happens -- that happens automatically unless you say no. And that will happen as I've said every other year. Now, if you say no three times, then two things happen. One, is they will stop asking. Two, if later you decide you want an increase then you will have to undergo underwriting to prove that you're still insurable.

Doris McMillon: Go ahead.

Ric Edelman: This is really critical. I think that's why we're all so hot on this. Number one, if you are going to go with the future option, never say no. As Frank is saying, if you say no too many times they stop offering it to you. Number two, if you're going to never say no, then don't do that in the first place. Take the inflation benefit in the beginning. In the long run it's the cheaper way to go and will be best assuring that you have the coverage that you really need.

Susan Polniaszek: That additional amount is actually you're being charged at your new attained age. So if you bought it original policy at 45 eventually you want that extra $20 a day, that is going to -- you're now 65 you're going to be basing the pay at the 65 year age rate. That is why in the long run that option is the more expensive one.

Priscilla Brandon: I absolutely agree. I also had a personal experience in that my mother insisted on taking this and then because she had cognitive impairment, she forgot to take the additions. And so when she did trigger her policy, I discovered that there was no inflation protection.

Doris McMillon: Well, here is a quick question. I wanted an answer to this question. What happens to your money if you die before needing the service? Is the money just gone or do you get any back? You won't get it back but what happens?

Frank Titus: This is an insurance policy and you don't get your money back in the same way that you don't get your money back if your house doesn't burn down.

Ric Edelman: In other words, go start a fire if you want to get the bigger bang for the buck.

Frank Titus: So you shouldn't feel bad if you never need long term care insurance, and you shouldn't feel bad if your house doesn't burn down.

Doris McMillon: Amen to that. Let's take a telephone call we have the Glenn on the line calling from DC. Glenn?

Caller: Is there a list of preexisting conditions that will disapprove you for any kind of long term care insurance?

Frank Titus: Glenn, I can't tell whether you're an active employee or retired. For active employees there is abbreviated underwriting, there are seven questions. So long as you answer no to all of those questions you will be insurable. If you answer yes to any of the first three questions, you'll be offered a service policy but not insurance. For the fourth through the seventh question, if you answer yes to any of those, you will be offered a nonstandard policy.

If you're retired or in one of the groups other than active worker or member of the uniformed services, then you undergo full underwriting with 22 questions and there again if you are answering yes to a bunch of questions, chances are you're in trouble in terms of getting the insurance.

Priscilla Brandon: Having said that, I think some companies have different underwriting and some companies are more rejecting, if you will, for certain conditions than others. So I think that anyone who is shopping, this is a good opportunity for us to say that if anyone is shopping for long term care insurance, certainly worth talking to other major issuers and particularly before you apply for any policy, find out what are the things that would get you rejected. Because you don't want to apply and then get rejected.

Ric Edelman: Don't assume that you're not insurable.

Susan Polniaszek: But you have to -- most of the other companies that are not in the federal program you have to go through a strict underwriting. Which means that not only do you have to answer questions, many times we want to contact your doctor and they will contact your doctor and get copy of your medical history just to find out, did you have arthritis. All sorts of things, and you'll find that some people are not insurable when they appear to be healthy otherwise. So the underwriting is an important feature of a policy.

Doris McMillon: We have about a minute left for this last question. And panelists, can I buy long-term care insurance for my parents?

Frank Titus: If you're an active worker, yes, you can. But you cannot do it, they have to apply in their own right and then what you can do is you can pay for it with a payroll deduction. But each individual who applies for insurance under the federal program completes his or other own application. The payment arrangements can be different. Children can pay for their parents' policies.

Doris McMillon: I'm sorry to say that we're out of time for this broadcast. There will be many more opportunities to learn about the Federal Long Term Care Insurance Program in the weeks ahead. Thanks to all of our panelists today, our callers and all of you watching this presentation. And if you still have questions, feel free to visit the website (www.ltcfeds.com) anytime. Thank you for joining us and make it a great day!

	OPM Home > Insurance > LTCI Home > Satellite Broadcasts > Second Broadcast Transcript
	U. S. Office of Personnel Management Federal Long Term Care Insurance Program Second Satellite Broadcast Transcript
	Kay Coles James: Hello. I'm Kay James, Director of U.S. Office of Personnel Management. It's a pleasure to welcome you to OPM's second satellite broadcast on the new Federal Long Term Care Insurance Program. These broadcasts are part of our ongoing effort to educate all of the Federal Family about long term care insurance. Our first broadcast in March focused on the nature of long term care itself. Contrary to popular belief, it's not only an issue for the elderly. More than 40% of those who need long term care are under the age of 65. The types of care required can vary, including assisted living facilities and in home care. Because traditional health insurance does not pay for most long term care expenses, the cost can and often does result in financial devastation for American families. That's why I want to encourage you to have a plan for meeting those potentially devastating expenses. Today's broadcast focuses on a promising option to pay for these expenses--long term care insurance. Think for a moment about the other types of insurance many of us have. We buy homeowners insurance, although frankly most of us will probably never have major damage from a house fire, hurricane or tornado. We buy car insurance although most will never experience more than a minor fender bender and shopping cart dings. Regardless, we all recognize the potential hazards and as responsible, accountable adults, we prepare accordingly for the unforeseen accidents that may lie ahead. At the same time, statistically, there's a much higher probability that you and I will need long term care at some point in our lives. And the consequences of not being prepared can be dire. For many of you, long term care insurance may be a new idea and you may wonder whether it's something you really need. As consumers of insurance products, you need to inform yourselves of potential options that are available to you. Long term care insurance will not relieve you of your responsibility to family but it is an important tool for limiting the financial risk to your family's future income, savings and assets. Our panel of experts will help you evaluate whether long term care insurance is right for you; what you should look for in long term care insurance policies; how much insurance coverage you should buy; and how the new Federal Long Term Care Insurance Program can meet your needs. I personally believe that this is a very good program. So good, in fact, that I already signed up, becoming the first charter member when our early enrollment period opened in March. There are many reasons why I decided to purchase coverage under the Federal Long Term Care Insurance Program: I am familiar with the market and this is a good value. It's sponsored by a partnership of known and trusted insurers, John Hancock and MetLife. The Federal Long Term Care Insurance Program provides flexibility and choice--each of you can personally tailor your individual plan and decide what coverage is best for you. But the most important reason I signed up comes down to family. I told my children that I was going to put my insurance certificate in their Christmas stocking because it benefits them as much as my husband and me. Through this act of personal responsibility I'm reducing a potential future burden on them and their families. Long term care insurance gives my family security and peace of mind. I sincerely believe that as you learn more about the Federal Long Term Care Insurance Program you will share my enthusiasm about the opportunity to participate. I'm confident that this innovative program will become the largest employer-based long term care insurance plan in the nation. 20 million members of our Federal Family are eligible to apply, including Federal and Postal employees and annuitants and members and retirees of our uniformed services. And of course, all of their qualified relatives. I've told you why I decided to apply, now let's hear from some other people about how long term care insurance has helped them to plan for their future. Senator John Breaux (D-LA): Insurance for long term care gives you the knowledge that when you reach that point in your life when you need the care that it will be there. That someone, some group of people providing the services that you are going to need will be there for you. It's a good investment and one that I think all Americans should consider very seriously. Sally Schloss: One of the features of long term care insurance is that it gives me choices. And it means that I won't be a burden and my husband won't be a burden to our kids. And we won't go through the same kind of anxiety and decision making process that we as a family had to go through in regard to my own mother. Suzanne LaFond: You work a lifetime to accumulate a little nest egg, some of them are bigger than others. And mine was fairly little. And I thought, you know, in less than a year that thing could just evaporate. Bob Goldstraw: We can't predict potential disability or injury to ourselves. We're not necessarily talking about somebody about the age of the 90 it could be 40 or 45 or 50. How many people have half a million dollars in the bank to cover this kind of need of home care, nursing home, this kind of thing? So I think to not have it is really pretty foolish. I personally would feel nervous without it, really. David Lawrence: I think the way our mind set is today, long term care means care for elderly. Kathleen Lawrence: Nursing home. David Lawrence: Nursing homes, yeah. We don't -- my mom worked for 35 years with the hospital and she would come home all the time with, oh, I admitted the poor soul today had a motorcycle accident, he's paralyzed from the waist down. We don't think of that as young people. We think that our lives are going to just -- wake up tomorrow and going to be as we are today. And that's not necessarily so. Leslie Hegamaster: I am 49 years old. I am single and I feel that it's really -- my responsibility to make certain that my continued well being in any circumstance is taken care of. I think that as you go through life, I think it's very important that you look to the people you care about for emotional support, not financial support. Doris Werwie: I'm a single parent, and I'm expecting the cost of long term care is going to get much more expensive as I get older. And I don't want my daughter to have to spend all of her inheritance on me, I'd like her to have some of that. So it's a way of my managing my wealth in a good way. Jennifer Williams: In my view, long term care will be at home as much as possible, in a professional nursing home situation if necessary. But in any case, I'm probably going to need some help physically and I'll probably need help financially. So long term care insurance seems like a logical choice. Jack Curley: We needed long term care insurance because of the family history. We faced life threatening illnesses already ourselves, even at this age. And it's a no-brainer for us. Senator Charles Grassley (R-IA): You think of long term care as just being nursing home care. But quite frankly, when you buy insurance it can be very flexible. It can be for family caregiving. It can be for home health care. It can be for assisted living outside of your home. In another environment short of a nursing home. So it gives a great deal of options to you so that you can have as much independence and higher quality of life as you go through the process of making a decision of going to a nursing home. Quite frankly, I've never met one person in my life that ever said, I'm just dying to get into a nursing home. Well, some people don't have a choice. Long term care insurance gives you a choice. Doris McMillon, Moderator: Hello, I'm Doris McMillon. Welcome to the second in our series of three broadcasts designed to help inform you about long term care insurance. Our goal today is to provide still more information, to help you feel confident and comfortable in deciding whether you need long term care insurance coverage, and if so, what types and amounts of coverage are best for you. As we learned in our last broadcast, traditional health insurance programs such as FEHB, TRICARE, TRICARE For Life and Medicare do not cover most types of long term care. Moreover, with the extended life expectancies of folks today, the potential need for long term care has increased dramatically. Because long term care is one of the largest uninsured financial risks facing Americans today, OPM wants to be sure you are well prepared to face this challenge should the need arise. Today, our distinguished panelists are going to provide insight into such questions as, who should or should not purchase long term care insurance? What should I look for in a long term care insurance policy? How much coverage should I buy? And how does the Federal Long Term Care Insurance Program fit into all this? And now I'd like to turn to our panel of experts for today's session. It is my pleasure to introduce to you, first, Ms. Priscilla Thayer Brandon, Editor, Kiplinger's Retirement Report. Priscilla has been covering investing, taxes, health care and estate planning for those 50 and older for Kiplinger's retirement report since 1995. She has been studying and writing about personal financial issues since joining the firm in 1971. We're very delighted to have you with us today. Priscilla Brandon: Thank you. Doris McMillon: Next we have Susan Polniaszek. Susan is the Senior Policy Analyst at the American Association of Homes and Services for the Aging. She earned her masters of public health at the University of Michigan and has nearly 30 years of experience in health care. She has analyzed Medicare, Medicaid, Medigap insurance and long term care insurance and has written four books and numerous articles on health care and long term care financing. Susan, welcome. Susan Polniaszek: Thank you. Doris McMillon: Then we have Mr. Ric Edelman of Edelman Financial Services. Ric is a best-selling author, holds four professional designations, hosts two award-winning radio and television shows, writes a syndicated column, publishes his own newsletter and offers a financial education website at ricedelman.com. He also has received both an honorary doctorate from Rowan University and two U.S. patents. We are very pleased to have you with us, Ric. Ric Edelman: Thank you, Doris. Doris McMillon: And finally allow me to introduce returning panelist Frank Titus. Frank is Assistant Director for Long Term Care in the U.S. Office of Personnel Management. He has been working on the government's retirement and insurance programs for 30 years and is currently directing an office devoted to implementing OPM's newest and largest benefit program, the Federal Long Term Care Insurance Program. Frank, welcome back. Frank Titus: Thanks, it's good to be back. Doris McMillon: To all of my panelists, a warm welcome to you for being with us today. Now, let's begin today's discussion with Priscilla. Priscilla, you're going to address one of the trickier questions before us today, who needs long term care insurance? Priscilla Brandon: Thanks, Doris, almost every adult needs to consider long term care insurance at the right time, and here's why: health insurance is intended to help you obtain the care and service you need to fully recuperate from an accident or sickness. If you go to visit the doctor because you have bronchitis your health insurance will help cover the costs of the visit and pay for your antibiotics. Long term care insurance, on the other hand, is designed to pay for care pays for the cost of ordinary activities of daily living such as bathing and dressing. It can also help if you have an accident, a stroke or you develop some kind of disease like multiple sclerosis and you need help and supervision in managing your care. Doris McMillon: Now let's say with long term care insurance you're basically protecting yourself from a financial disaster, correct? Priscilla Brandon: That's right. Long term care insurance really is designed to protect you from the catastrophic costs of care not covered by ordinary health insurance. These are the kinds of costs that really can wipe out your savings. Doris McMillon: Let's talk about Medicaid in relation to long term care. Priscilla Brandon: Some people believe that the federal government pays for long term care. And it is true that if you spend your savings on care and you may qualify for a federal-state program -- welfare program called Medicaid. And for older people, Medicaid does pay for nursing home care but qualifying for Medicaid really takes away a lot of choice. Most people would like to have choice. You don't choose your nursing home, you don't choose care at home. You can't choose to move into that attractive assisted living facility in your neighborhood. Doris McMillon: What do you need to be concerned about before you buy long term care insurance? Priscilla Brandon: Well, of course long term compare insurance is an important way for most of us to secure the care that we need. But one of the most important things is to make sure that you can afford to pay the premiums now and in the future. And I know that this is something that Ric will be addressing the affordability issue later on. Doris McMillon: Perhaps you can give us some examples of situations where long term care insurance could fit into people's lives. For example, what about the person who just gets his first real job? Priscilla Brandon: For a young person just starting out, their primary goals and priorities are going to be investing in a career. That means going to night school, doing whatever they need to do to make sure that they have a successful career and earn the kind of money that they would like. They also need to start a systematic savings program, because nothing is going to take the place of saving now for your retirement in the future. Doris McMillon: Let's say that -- I guess you could say that owning long-term care insurance isn't a bad idea? Priscilla Brandon: Owning -- buying a long term care insurance policy is worth considering as soon as you have a secure job and a comfortable income. The younger you are, the lower your monthly premiums. So, for example, if you're in your 20s, the cost is -- monthly cost would be approximately what you might spend on a date or taking a couple of friends to a movie and pizza. Doris McMillon: Think parents would pick up the tab? Priscilla Brandon: Some parents might want to consider picking up a policy for your young adults and then as soon as they're in a stable job they might consider the kids would pick up the premiums at that point. Doris McMillon: Now, a person's needs and priorities are going to change, especially after they marry. What is your advice for that situation? Priscilla Brandon: At this stage it's really important to make sure that you have enough disability insurance, health insurance, life insurance in case an illness or accident takes you out of the workforce. It's also time to start that serious retirement savings program, if you haven't already done so. Doris McMillon: And marriage, with marriage comes families. Where does this put long term care in the pecking order of the financial situation? Priscilla Brandon: Well, young families have a lot of financial responsibilities and a lot of financial needs. Obviously the things have I've already mentioned or important but most young couples would start looking at saving for a home of their own. When the child arrives, of course, then they start thinking about saving for college. But if you have a stay-at-home spouse, you might take a look at long term care insurance to protect that spouse from -- and yourself from catastrophic accident or illness. Doris McMillon: What about the people near or into their 50's, they have savings, where does long term care insurance fit in for them? Priscilla Brandon: Definitely in your 40's and 50's it's time to learn about long term care insurance. And plan to buy it. If you haven't done so by the time you reach your mid 50's, shake a leg, it's time to do it. I think in their 50's I think a lot of people think, well, the kids are off on their own and now I'm going to really chunk money into retirement savings. And I think they can look at long term care insurance as a way to protect the nest egg they have already built and to make sure that if something happened they would continue their retirement savings. Doris McMillon: Now, what about those who are really close to retirement. Is it too late for them to consider long term care insurance? Priscilla Brandon: Definitely not. I think it's really late 50's all the way to 65 is really prime time for buying long term care insurance. Obviously the premiums continue to go up a little bit but still very affordable for most people. And the big thing is you have to be in fairly good health. Doris McMillon: I did not shake a leg when I was 55 now I'm 70 and I need some long term care insurance, is it too late? Priscilla Brandon: It's definitely not too late. It's more expensive. But if you're in fairly good health, you probably can get quite a good policy. And if you find the policy that you like and it's a little bit steep, you might consider having your kids chip in. They might be quite willing to do so. I'd like to end with a couple of points. I wanted to say that I think a good way of thinking about long term care insurance is think of it as a way to pay for the care you need when and where you need it. Also, once you really need long term care insurance, you can't buy it. Doris McMillon: That would be unfortunate. Thanks. So, in effect long term care insurance can benefit people at all stages of adult life from the young to the old. For catastrophic accidents or simply to manage the effects of old age. And it is best to start early, of course. But it seems that it's not too late to benefit from long term care insurance at any stage of life. So thanks again, Priscilla. Now the next panelist we'll hear from is Susan Polniaszek. Susan is going to help us understand what to look for in a long term care policy. The nuts and bolts and features to consider when selecting your policy. Susan, welcome. What are the some of the most important features to consider? Susan Polniaszek: Thanks, Doris, I'm glad you asked that. The most important feature to look for is the company itself. You want to find a company that is a financially secure and reliable company. If you don't, the promises and benefits may not be there when you need them. Doris McMillon: What else? Susan Polniaszek: The second most important feature is flexibility in the policy. There is no "one size fits all" what is right for you may not be right for someone else. Therefore you want to buy policy that is going to be meet your needs. Considering your health status, your financial resources, your family situation, longevity in your family, all sorts of things; and you need to have something that fits your needs. Doris McMillon: You said you also need a policy that provides coverage for -- Susan Polniaszek: You need to make sure that the coverage is going to be there when you need it. For instance, you want to make sure that the long term care that the policy will cover, if you have a physical impairment, that you are unable to do the activities of daily living. Such as the bathing, the walking and the dressing. You also need it in case you have a cognitive impairment, from dementia, most common one being Alzheimer's. Doris McMillon: Now, fitting our individual needs I know is important. So out can people buy the right amount of insurance, in other words, how much insurance is enough? Susan Polniaszek: There are four components of the amount of insurance to buy. The first one you look at is the benefit amount. You want to buy a policy that will pay for the most expensive long term care service, that is nursing home. You probably have some income, but your income and policy should cover the daily rate of nursing home that is in your area, that you would want to go to. The next component is inflation option. Because you're buying this today, and you're not going to need it for 10, 20, maybe 30 or 40 years from now, you want to make sure that the benefit amount will keep pace with inflation. And there are three kinds of inflation. It's important to understand the difference between compound inflation and simple inflation. Compounded is what you want. Not the simple inflation. The other option is to buy additional benefit amount later in life. That option looks good when you're younger. But it can be very quickly more expensive in the long run. Again, you really need to crunch the numbers and pick what is right for you. Now, once you have the benefit amount and the inflation factor, you then pick the benefit time period, length of time. When do you that, what you're looking for is something that's affordable. You can go from two years, three years, four years, five years, lifetime. Now, everyone knows someone who stayed a long time in a nursing home or long time needing long term care. But you have to be very careful buying that lifetime policy. Because it can be very expensive. And again you want to make sure that policy is affordable today as well as into the future. Doris McMillon: Now, I think one of the key questions for me is the deductible or the elimination period. Susan Polniaszek: Well, that's the amount of time that you pay for your long term care before the policy starts paying. And it should be, if you have enough funds you can have a lower premium if you get the the 90 day or 100 day elimination period or deductible period. Same thing like any insurance. Doris McMillon: Of course the next question is, what are the basic services that a long term care insurance policy should cover? Susan Polniaszek: Well, you want to make sure that the policy covers the full continuum of care. We all know about nursing homes. I said that's probably the most important because it is the most expensive continuum of care. You want to be sure that the policy covers nursing home, because it's such a catastrophic expense and that's what you really -- the insurance is there to protect you for. You also might want to have the policy cover assisted living. Now, there is no one definition for assisted living and every state has their own definition. Therefore, you want to make sure that the policy has a broad definition for assisted living. Assisted living really provides the personal care, the help with activities of daily living, supervision if you have cognitive impairments and you want to make sure that those services can be provided either by staff of the assisted living facility or in some cases bring in an outside home healthcare agency. Doris McMillon: And speaking of the word "home," what about care at home? Susan Polniaszek: Well, most people would prefer to have care at home. There's no doubt about it. And you have to understand all the different options there are in care. It's not just home care, but home and community care. Home health is the skilled care. That's an R.N., therapist, et cetera. But Medicare pays for that. But they only pay for it if you have intermittent needs. It does not pay for it if you need 24 hour a day nursing care. Nor does it pay if you need daily care on a continual basis. Doris McMillon: Home care? Susan Polniaszek: Well, home care is kind of the supportive services, the personal care given by aides. Again, activities of daily living, helping with the supervision if you're cognitively impaired. It also can help out with some of the supportive services, chore services, light housekeeping, preparing meals, et cetera. Doris McMillon: Modification? Susan Polniaszek: Well, modifications are important, if you want to stay at home, you may need to do some modifications to your home. Ramps, grab bars, things like that so you can stay at home. Doris McMillon: What about adult daycare? Susan Polniaszek: Adult daycare is a program where you go, you live at home but during the daytime you go to a place where they can provide social services as well as healthcare needs. Doris McMillon: If you're single? Susan Polniaszek: If you're single -- home care can be less expensive than nursing home or assisted living. If you have a caregiver you can use home care. But if you are a single person it's very difficult to be able to totally utilize the home care benefit. Doris McMillon: Are there any other features we should know about? Susan Polniaszek: There are variety of features, we could spend all day talking about different features. Two that you might see in policies is a care or case management. And this is not a gate keeper, this is not someone -- something preventing you from getting care. It's to help you to figure out what kind of care is available and where to get it. Another feature that some policies have is what they call preferred providers. They will have a list of providers. That can be somewhat restrictive, you have to be careful with that. Doris McMillon: Great information, Susan, thank you so much. That's for people needing to zero in on exactly what they should be looking for as they consider long term care insurance. Now that we know more about what to look for in long term care insurance, Ric Edelman is going to discuss with us how much coverage we should by, Ric, welcome. How much coverage should we buy? Ric Edelman: It's probably the most dicey of all questions because you can buy a contract with as little as $50 of daily benefit all the way up to $300 or more in daily benefits. Obviously the more coverage you buy the more expensive it is. So we take all Americans and put them into three broad groups: the rich, poor and the rest of us. And most of us fall into that "rest of us" category. The rich don't have to worry about it--they can afford the care. The poor don't have to worry because they're covered by Medicaid, the federal health plan for the poor. They're not really of tremendous conversation here either. It's the rest of us, the middle class, the Americans who are working and accumulating enough money for retirement. They're the ones that face the risk of spending what is a national average of about $4,000 a month if you really do need the full care. Doris McMillon: Now, once we understand the economic factors that are involved in the decision making process, how do we go about determining what our specific needs are? Ric Edelman: Well, you need to look at what cost is in your area. Because it varies widely all across the country. In urban areas, major metropolitan cities the cost is going to be very different than in rural areas. So take a look in your local community and find out, just make phone calls to the local nursing home community, talk to local healthcare agencies and ask them, what is the average daily cost of care in this area. It can vary widely --it can be be $120 a day, it can be $300 a day. Depending on where you're living, what kind of care that you might need. Doris McMillon: To clarify then, what becomes critical is exactly how much coverage is needed and how much is affordable at an individual's particular economic level. Ric Edelman: And that's the key. Because it's easy to say we want you to have $150 worth of daily benefit, and we want you to have that for a six-year period of time. That is easy to say. The problem is that that costs x amount of money. You might not be able to afford that. Okay, if you can't afford that should you ratchet down the amount of money per day or reduce the number of years that you have coverage? You can save money either way, but at reduced benefit. So you've got to look at a combination of what you can afford versus what you need in the context of the family's total situation. We're primarily concerned with the spouse as much as the institutionalized patient. Doris McMillon: Great. And we want to thank Ric for giving us all some perspective and the specific rules to best follow to balance our future needs with our ability to provide for them. And now that brings me to a really big question that's probably on the minds of everybody watching this program. What do you think about the role the federal government's plan can play in the lives of its workers, do you think it's a good idea? Or not such a good idea, Ric? Ric Edelman: Yes. Without question, the new federal program is much needed benefit that I'm really excited to see in the marketplace. It's raising aware ness to a degree that we didn't have before. And the product that the government has put together in conjunction with the private sector is very, very good. And without question, you definitely need to be considering it as you shop around for long term care. Don't assume that the federal program is the only one to look at. Also don't assume that it's not any good because it's coming from the government, how good can it be. Absolutely, it is very competitive for a lot of folks, the best choice. Doris McMillon: Thanks a lot, Ric, for those frank comments. I think that is the kind of input our viewers need to hear. Now I'd like to turn to our final panelist, Frank Titus who is going to give us overview of how the Federal Long Term Care Insurance Program works, who can apply, and how we can help anyone who is interested in becoming involved with the program. So, Frank, it sounds like long term care insurance is something that many of us really ought to be thinking about. Tell us who is eligible to apply for the Federal Long Term Care Insurance Program? Frank Titus: Well, Priscilla did a great job of taking us through the stages of life and talking about who ought to be thinking about long term care. And our eligible population is very large. We've got a graphic up that shows the eligible population. We think that total number of individuals eligible is about 20 million. Now, most of our viewers today are active federal workers and members of the uniformed services. I would like to encourage them to really reach out and contact the parents and parents-in-law who are eligible and also be alert to the fact that adult children are eligible. I was in a conversation with a lady named Truda the other day, she had no clue she was eligible for the program. Turns out that she is the adult child of a woman who was married to a deceased federal retiree, so she was eligible. Had no clue she was eligible. Doris McMillon: When can the federal family apply? Frank Titus: Well, we had an early enrollment period which basically ended today. And our regular open season will begin July 1 and end December 31. We're doing sort of a new thing during the open season. No one is going to age during that period. Doris McMillon: That's right. Frank Titus: No one at all. Everybody is going to be considered the age they were on July 1 no matter when they sign up during the open season, so folks can take their time, can attend one of the thousands of workplace meetings we're going to be having. But it's important to remember that if you're one of the more than 800,000 people who have signed up for our newsletter, you still need to request an application. So at the end of the show we'll be showing toll free numbers, giving information about how to do that. Doris McMillon: Have those pens and paper ready. We've heard today about what people shopping for long term care insurance should look for. What does the Federal Long Term Care Insurance Program have to offer? Frank Titus: You know, Susan said the most important thing was to look at the companies that are providing the insurance. And I think she's right. And that's why OPM went through a very competitive process, a very rigorous process and selected two of the strongest insurance companies in the United States, John Hancock and MetLife, who came together and formed a jointly owned company, Long Term Care Partners, to offer this product. These are top-notch companies and we're just very glad that we partnered with them and they're helping us roll out this program. Doris McMillon: I know we've heard from several of our panelists, is that it's critical to be able to afford the coverage that you purchase for years to come. How does Federal Long Term Care Insurance Program address that? Frank Titus: Well, Susan said there's no such thing as one size fits all. And that certainly true and certainly recognized in the design of our program. You can choose a prepackaged plan and we've put together four different packages for people to look at during the open enrollment period. Or you can customize a plan. You can have a facilities only plan or a comprehensive plan and we have a very, very wide range of benefit options. If you want to customize your own plan, you can start with the benefit as low as $50 a day or go up and $25 increments all the way up to $300 a day. If you have choices in terms of the kind of inflation protection you want. You have choices in terms of three-year policy, a five-year policy or unlimited benefit period. As Susan pointed out I think Ric did too, you can also influence the affordability by choosing between a 30-day or a 90-day waiting period. Doris McMillon: We've heard some of the factors people should consider in deciding how much coverage to buy. Can the Federal Long Term Care Insurance Program offer assistance to people with trying to figure all this out? Frank Titus: Sure. Both Ric and Susan talked about finding out what the cost of care is in your area and I think Ric mentioned you can call a couple of nursing homes. You may not be planning on retiring where you live today and work. So what we have is we have an 800 number you can call. We have websites and we have people who can identify the cost of care, both assisted living and nursing home care in the area that you're interested in. And we have that website on the screen. And you just click on a state and pick a city and it will show you the cost of nursing home and assisted living care. Doris McMillon: Great. Thanks a lot. I'd like to know if there's anything else that you would like people to know? Frank Titus: Well, we have information numbers for folks to call. We will have a new website that will be introduced later in June. June 25 it's scheduled to come up. And stay tuned. Subscribe to our newsletter and be alert for the meetings that we'll be having across the country. Doris McMillon: Okay. Thank you very much. We've learned a lot today, from what to look for to how to pay and whether or not to purchase to what the Federal Long Term Care Insurance Program has to offer. A lot of really good information. But now this is the moment that you all have been waiting for, your turn to ask the questions. I do have some questions that have already come in. Ron called in from St. Louis, or actually e-mailed in, and he says, you know, I don't have any heirs and I really don't care about preserving my assets to pass along to someone else. Why would I need long term care insurance? Who would like to take that? Ric Edelman: I'll give two answers. First, potentially Ron, you don't need any long term care insurance if you have enough assets to pay for the care if and when you eventually need it. But I'll take it a step further. If you don't have any heirs or leave your money to, who is going to get it? Have you thought about giving it to charity? If so, go to the charities now, I'm willing to bet that they will buy the long term care insurance on your behalf out of their pocket in exchange for you leaving your assets to them. So even though you might not have any direct heirs there is the community and local charities to think about. Doris McMillon: Anybody else like to comment on that? Ron, you can send it to me! We have another question. John has e-mailed us from Phoenix. If I buy long term care insurance when I'm younger, the premiums will be lower. But I'll be paying them longer, so wouldn't I save money by waiting to buy? Susan? Susan Polniaszek: Because I crunched the numbers. You will find if you look at the policies and what they cost and you crunch through the numbers today saying you're buying at age 40, 45, and you've got maybe $500-$600 a year you are going to pay for that longer. If you wait until you're 65 or 75 that same policy could be thousands of dollars and ultimately, although you pay for a short period of time, it will be more expensive. So once you have saved enough money and you are at the right stage, buy it when you're younger so that you're going to save money in the long run. Priscilla Brandon: And that also protects you in case you have something completely unexpected happen to you fairly soon. Most people expect to live until their 80's before they need help. Sometimes it doesn't work out that way. Doris McMillon: I think as we saw in the video that opened in our program, one couple was talking about the fact that they had someone who had been in a motorcycle accident, so I guess we all want to think we're eternal. We have another question that comes to us, it says, if for some reason the company experiences financial difficulty, as has occurred with insurance companies from time to time, what assurance is there that obligations to me will be met under the Federal Long Term Care Insurance Program? Frank? Frank Titus: Well, there are a couple. One thing is that we structured the program so all of the income, all of the assets associated with our program are held completely separately and apart from the company's other assets and they're not available to meet any obligations other than those associated with our program. Now, should a company go out of business, what we would do is of course our assets would be conserved and we'd have a recompetition and we'd select a new carrier. The new carrier would assume the assets and would take over the policy hopefully that process would be essentially transparent to our policy holders. The benefits would be the same, hopefully the premiums would be the same and it would just be a program being brought to you by a different set of insurers. Ric Edelman: There's no real way to answer it with absolute certainty, but I can tell that you the steps that Frank and his team have taken at OPM make that risk as low as humanly possible. And I don't believe that the risk is one that should stop you from buying long term care insurance. Doris McMillon: Absolutely. Let's take a telephone call we have Cecile calling from Florida. Go ahead with your question. Caller: Yes, I'd like to know if you pick your characteristics and benefits that you would like during the first open season and then decide a year or two later that you'd like to change something will you have that opportunity? Doris McMillon: Frank? Frank Titus: Yes. We do have policy upgrades and downgrades available. Policy upgrades depending on what it is you want may require you to undergo another round of underwriting to make sure that you remain insurable. Policy downgrades would not require underwriting. Doris McMillon: Thank you for your question. We have Pat calling from Alabama. She says, I already have a long term care insurance policy, but now I'm not sure it's enough. Should I buy another policy? If so, should I keep my old one? Ric? Ric Edelman: Maybe. In many cases we find folks that have bought policies many years ago, five years ago, ten years ago and the costs of long term care have grown in the interim and maybe the policy you bought then isn't enough for what you need today. So what you should do is go back to the agent who gave you the policy in the first place and have them compare what you currently own to what you should own if you were starting from scratch today. And then determine if you should either add on a second policy or replace the first one with a brand new second policy and be sure to include a comparison of the federal program now available. Because it might very well be the best deal for you. Keep in mind you're older now, which means the inherent cost will be higher. So keeping the existing one and adding on might prove to be the best approach. Doris McMillon: Let's take another call, Joyce is calling from Michigan. Caller: Hi. I'm calling regarding asset protection. My concern is, if you were to have a long term policy for the five-year period and you were to begin receiving the care and outlive your five years--you are in a nursing home and it's past your time. Must you then begin using your own assets to keep your care in effect in that particular nursing home? Or prior to the five years can you assign your assets to your family members and then use Medicaid to continue your care there? Doris McMillon: All right. Priscilla? Priscilla Brandon: In most cases would you begin spending down your assets. There are a few states that have programs that you could use, they're called partnership programs where you might be -- if you purchase it long term care policy of a certain size, you can protect your assets once you have spent-- used up your policy benefits. But in most cases you would begin to spend down. I really don't know exactly what your situation would be in your state as far as Medicaid is concerned. Perhaps one of the other panelists know a little bit more about Medicaid. Doris McMillon: Susan? Susan Polniaszek: I personally do not believe that we -- that should you transfer your assets to other people in order to be eligible for Medicaid. I think that is wrong. But there are laws that you have to consider. There is a federal law governing transfers--you'd have to consider that. But for the most part if you've got a five-year plan, long term care, the vast majority of people are going to have their long term care coverage totally covered by that five years. There will be some that certainly some people will stay very long in a long term care situation in which case your assets would be used to pay for the care after that five years are up. Doris McMillon: All right. Thank you very much. Let's take another question. We have Jane calling from Des Moines, Iowa, thank you for calling. Caller: -- -- Doris McMillon: Jane, we'll take your question. Okay. I'll go to another fax here. This question is from Carmen in Michigan. Will individuals who elect long term care during the early enrollment period be locked into those premiums or are the premiums subject to change in the fall and in the future? Frank? Frank Titus: Well, if you bought during the early enrollment period, which I did, then you may have benefited from getting a slightly reduced premium if you have a birthday, as I do, that falls between the end of the early enrollment period and July 1, when all the birthdays get frozen. Now that premium is basically designed to be level for life, assuming you bought the built-in inflation protection. During the open season that begins in July, if you want to modify your coverage, you're free to do that and pick any of the options that become newly available during the open season, which includes, for example, an unlimited benefit. Now if you do make a choice and choose a richer benefit, you will be paying a higher premium. But that premium will be based on your age when you acquired your original policy. Not your age on July 1, should that be different. Doris McMillon: We have Christina on the line from Portland, Oregon, please go ahead, thanks for calling. Caller: Hi, you're welcome. If I enroll in a policy and -- okay, if I enroll in a policy, what kind of help is available for my relatives? Like I know that if my parents didn't pass underwriting-- I remember that they were talking about it before saying that there was some kind of benefit that we could as enrollees ourselves help our parents? What is available out there and -- Doris McMillon: You mean in the long term care insurance? Caller: Correct. Frank Titus: Well, one of the points that Susan made, I know Priscilla has had experience with this personally is care coordination. Care coordination is an important part of the federal program. And it's available not only to you as a policy holder, but because you purchased a policy it's available to your qualified relatives, such as your parents. And so that program is available to counsel you and them and help make arrangements for care. Including accessing preferred providers that Susan referenced. And accessing other providers that provide discounts. And perhaps, Priscilla, you'd like to share with us the experience that you had. Priscilla Brandon: Yes. My mother had a long term care insurance policy which I was helping pay the premiums on. And one of the -- when she developed early signs of Alzheimer's disease and one of the huge benefits that I discovered was that when I called the agent he said, well, you know that you can call in a geriatric care manager to assess your mother and also they were incredibly helpful in suggesting where, what kind of assisted living facilities would be appropriate for her needs, what kind of person she was and that also suited my needs, which were very important because I felt that being able to see my mother every day was almost as important as anything. Doris McMillon: Thank you very much for your call. I have a fax here, W. Rankin, says, how about guidelines, some formulas, assuming local nursing home costs $125 per day how do we decide how much we should plan on providing from savings, income, how long should the policy pay, et cetera. Ric Edelman: Assuming you're married, I would -- if you're looking at the cost of care of $125 a day, I would get a policy that pays 100% of that. Keep in mind that if you need the care, let's say that you're in a nursing home needing care, your spouse, the community spouse is still living at home with the full expenses of the household. The mortgage and food and car and clothes and travel and insurance and all the other expenses. And that is what makes long term care costs so devastating for the family. Picture you're retired you're your lifestyle as it is. All of a sudden you have an extra $4,000 a month not tax deductible that the family has to deal with. So have 100% of the costs covered. There's no reason not to. Only if you can't afford that should you begin the notion of ratcheting down the amount of coverage simply because of affordability. Doris McMillon: Susan, did you want to -- Susan Polniaszek: You're absolutely right. If you're in a couple situation, you really need the full cost covered because you do need your income for the spouse living in the community. If you are a single person, however, then you say, okay, I have $50 a day that I could use my income to pay for long- term care and that $50 plus the insurance would then pay the $125. So would you need $75 of benefit. You have to consider both. But again in the couple situation you really need to have the -- should have the full coverage. Doris McMillon: Okay. We have Bronna on the line from Bethesda, please go ahead. Caller: My question is, if you choose the option to increase your coverage later rather than the built-in inflation protection, number one, do you have to go through underwriting again if you decide to increase your coverage? And is there a limit to how many times you can increase your coverage? Frank Titus: I'll take that one. What you are talking about is what we call the future purchase option. And under that option basically every other year you'll be getting a notice from Long Term Care Partners that tell you that the -- that the medical CPI has gone up by seven or ten percent, what have you. And your $100 a day benefit that you purchased originally is going to increase to $110 a day. And your premium is also going to increase. Now that happens -- that happens automatically unless you say no. And that will happen as I've said every other year. Now, if you say no three times, then two things happen. One, is they will stop asking. Two, if later you decide you want an increase then you will have to undergo underwriting to prove that you're still insurable. Doris McMillon: Go ahead. Ric Edelman: This is really critical. I think that's why we're all so hot on this. Number one, if you are going to go with the future option, never say no. As Frank is saying, if you say no too many times they stop offering it to you. Number two, if you're going to never say no, then don't do that in the first place. Take the inflation benefit in the beginning. In the long run it's the cheaper way to go and will be best assuring that you have the coverage that you really need. Susan Polniaszek: That additional amount is actually you're being charged at your new attained age. So if you bought it original policy at 45 eventually you want that extra $20 a day, that is going to -- you're now 65 you're going to be basing the pay at the 65 year age rate. That is why in the long run that option is the more expensive one. Priscilla Brandon: I absolutely agree. I also had a personal experience in that my mother insisted on taking this and then because she had cognitive impairment, she forgot to take the additions. And so when she did trigger her policy, I discovered that there was no inflation protection. Doris McMillon: Well, here is a quick question. I wanted an answer to this question. What happens to your money if you die before needing the service? Is the money just gone or do you get any back? You won't get it back but what happens? Frank Titus: This is an insurance policy and you don't get your money back in the same way that you don't get your money back if your house doesn't burn down. Ric Edelman: In other words, go start a fire if you want to get the bigger bang for the buck. Frank Titus: So you shouldn't feel bad if you never need long term care insurance, and you shouldn't feel bad if your house doesn't burn down. Doris McMillon: Amen to that. Let's take a telephone call we have the Glenn on the line calling from DC. Glenn? Caller: Is there a list of preexisting conditions that will disapprove you for any kind of long term care insurance? Frank Titus: Glenn, I can't tell whether you're an active employee or retired. For active employees there is abbreviated underwriting, there are seven questions. So long as you answer no to all of those questions you will be insurable. If you answer yes to any of the first three questions, you'll be offered a service policy but not insurance. For the fourth through the seventh question, if you answer yes to any of those, you will be offered a nonstandard policy. If you're retired or in one of the groups other than active worker or member of the uniformed services, then you undergo full underwriting with 22 questions and there again if you are answering yes to a bunch of questions, chances are you're in trouble in terms of getting the insurance. Priscilla Brandon: Having said that, I think some companies have different underwriting and some companies are more rejecting, if you will, for certain conditions than others. So I think that anyone who is shopping, this is a good opportunity for us to say that if anyone is shopping for long term care insurance, certainly worth talking to other major issuers and particularly before you apply for any policy, find out what are the things that would get you rejected. Because you don't want to apply and then get rejected. Ric Edelman: Don't assume that you're not insurable. Susan Polniaszek: But you have to -- most of the other companies that are not in the federal program you have to go through a strict underwriting. Which means that not only do you have to answer questions, many times we want to contact your doctor and they will contact your doctor and get copy of your medical history just to find out, did you have arthritis. All sorts of things, and you'll find that some people are not insurable when they appear to be healthy otherwise. So the underwriting is an important feature of a policy. Doris McMillon: We have about a minute left for this last question. And panelists, can I buy long-term care insurance for my parents? Frank Titus: If you're an active worker, yes, you can. But you cannot do it, they have to apply in their own right and then what you can do is you can pay for it with a payroll deduction. But each individual who applies for insurance under the federal program completes his or other own application. The payment arrangements can be different. Children can pay for their parents' policies. Doris McMillon: I'm sorry to say that we're out of time for this broadcast. There will be many more opportunities to learn about the Federal Long Term Care Insurance Program in the weeks ahead. Thanks to all of our panelists today, our callers and all of you watching this presentation. And if you still have questions, feel free to visit the website (www.ltcfeds.com) anytime. Thank you for joining us and make it a great day!
	May 15 Broadcast Home Page \| LTCI Broadcasts Home Page \| OPM Web Site Index \| OPM Home Page