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News Items, by Subject

Long-term care

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[Official Guidance] Text of Rev. Proc. 2012-41, Inflation-Adjusted Non-Retirement Items for 2013, Including Medical Savings Accounts and Eligible Long-Term Care Premiums (PDF)
"For taxable years beginning in 2013, the term 'high deductible health plan' as defined in Section 220(c)(2)(A) means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,150 and not more than $3,200, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,300." (Internal Revenue Service)
What Happens When Benefits Come with a Bigger Price Tag?
"CalPERS counts about 150,000 state and local government workers in its long-term care insurance program, which pays for nursing and convalescent home stays.... Now CalPERS' staff has recommended a whopping rate hike of up to 85 percent and a lower-benefit, lower-cost alternative care plan." (Sacramento Bee)
Long-Term Care Insurance Research Brief
"This Research Brief describes the long-term care insurance industry; in particular, it covers who buys the product, how much it costs, what the market looks like, and foreign experience." (Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services)
Is This the End of Group Long Term Care?
"Leading insurance carriers have withdrawn from the group long-term care insurance market, prompting employers to think twice about implementing new programs -- are we witnessing the death throes of worksite LTC?" (Employee Benefit Advisor; free registration required)
CalPERS Must Offer Same-Sex Couples Long-Term Care
"[A federal district judge in the Northern District of California], ruling in a state workers' lawsuit, said a federal statute outlawing gay marriage is unconstitutional to the extent that it bars same-sex spouses and domestic partners from enrolling in [the California Public Employees' Retirement System] Plan. The legislative record of the Defense of Marriage Act, which bars federal benefits to same-sex couples, shows evidence of anti-gay bias, and the act violates gay and lesbian couples'constitutional right to equal protection of the law, [the ruling states]. (Dragovich v. U.S. Treasury Department, 4:10-01564, N.D. Calif.)" (Bloomberg)
Should You Purchase Long-Term Care Insurance?
"Buying a long-term-care insurance policy can be a way of making sure your future physical needs will be met. Policies designed in partnership with state governments also give individuals and their families a way to protect savings in the event of burdensome care costs that stretch on for years. Critics, however, say insurers are using scare tactics to sell their products, which come with a hefty price. For most people, these critics say, long-term-care policies are either unnecessary or cost more than their benefits are worth. They believe that a great many people would be better off essentially self-insuring or relying on government-funded programs." (The Wall Street Journal)
Long-Term Care Insurance: Who Needs It?
"Out of more than 313 million Americans, only about 8 million have any such protection, according to the American Association for Long-Term Care Insurance. The low participation rate largely reflects the high cost of long-term-care insurance.... Experts say the insurance can be a huge help, especially for people without children and relatively small retirement savings. But it's far from a perfect solution to all problems. For example, a policy typically covers three years of care, but many people live long beyond that cap. And the new policies are being written with more restrictions to limit insurers' risks." (NPR)
Nearly Half of Soon-to-Be-Retired, High-Net-Worth Americans 'Terrified' of Health Care Costs in Retirement
"While 45 percent expect health care to be their biggest expense throughout retirement, when asked to estimate how much they anticipate spending each year on health care, they said, on average, $5,621. This represents a drastic underestimation based on a 2010 study that estimates out-of-pocket health care expenses for a 65-year-old couple retiring today and living for 20 years to range from $250,000 to $430,000. That could mean as much as $10,750 a year per person in out-of-pocket health care expenses." (Nationwide Financial)
Combining Life Insurance with Long-Term Care Insurance as an Employee Benefit
"One of the more interesting plan designs presents the worker with an affordable product, which is a combination of term and universal life insurance. The life-insurance benefit drops to one-third of the original face value when the retired employee reaches age 70, but the LTC rider remains at the original amount. Employees can tap into the LTC payment -- if they've lost the ability to perform two or more activities of daily living -- at the rate of 4 percent a month, for up to 25 months." (Human Resource Executive Online)
[Opinion] Text of Comments from American Academy of Actuaries on LTC Reform Options (PDF)
"[These comments are] in response to the National Conference of Insurance Legislators' ... request for information on strategies to reduce costs related to LTC coverage. The task force that developed this response includes actuaries with a broad spectrum of expertise in LTC financing and Medicaid -- actuaries who understand and can explain the advantages and disadvantages of various approaches to LTC, including providing an analysis of the Community Living Assistance Services and Supports (CLASS) Act." (American Academy of Actuaries)
Premiums Climb for Long-Term Care Insurance
"The long-term care insurance market is struggling, and some companies are dropping out of selling the insurance to individuals. Others are raising premiums, but nobody is raising them as high as John Hancock, where some long-term care premiums in other states are jumping as high 90 percent. The actuarial numbers used to create these plans years ago turned out to be wrong." (Star-Telegram)
Long-Term Care Insurance Policy Costs Rising
"Insurance companies have been making major adjustments because the claims on long-term health care policies have exceeded their predictions[.] The reason: People are living longer and developing long-term illnesses[.]" (USA TODAY)
Six Keys to Long-Term Care Coverage
"Some 70 percent of people over 65 will require long-term care services -- including assisted living, nursing home or home care -- during their lifetime.... Costs, on average, range from $4,000 to $8,000 per month. For consumers who can't afford to self-insure against big costs like that, there are few alternatives. Medicare doesn't cover such expenses, and individuals with more than $2,000 in assets can't qualify for Medicaid assistance. Here are some tips on how to buy a long-term care policy or make the most of an existing one[.]" (Reuters)
Cost of Long-Term Care Insurance Keeps Rising
"The American Association for Long-Term Care Insurance says its yearly analysis of popular policies offered by 10 big insurers finds that prices for such policies have risen by as much as 17 percent from a year ago." (The New York Times; free registration required)
Long-Term Care Coverage for Employees Continues to Decline as More Insurers Exit Market
"The HighRoads survey found that more than 90% of the employers who offer LTC do so as an additional benefit to their employees. The remainder is equally divided between offering LTC as part of their overall health care strategy and being required by union contracts to offer this benefit." (HighRoads)
Connecticut Considers LTC Insurance Deduction Bill
"If implemented as written, the deduction would take effect on passage and apply to taxable years starting on or after Jan. 1, 2012. The bill would allow a state resident to deduct 'any amount paid during the taxable year for the premium on a long-term care insurance policy,' according to the bill text." (LifeHealthPro)
Arizona Lawmakers Consider Long-Term Care Savings Account Bill
"One section of the bill would let an Arizona taxpayer deduct long-term care insurance (LTCI) premiums from the amount of income subject to state income taxes. Another section would let a taxpayer deduct contributions to an LTC savings account from state taxable income. An LTC account administrator would have a fiduciary duty to the taxpayer and would be responsible for making sure the account assets were spent on LTC expenses." (LifeHealthPro)
[Opinion] Defend Freedom: Repeal CLASS
"CLASS was a fiscal time bomb. It's clear the program's main initial function was to pump up Obamacare's financing, since it would have collected premiums for five years before paying out a penny in benefits. As a result, the Congressional Budget Office estimated that it would reduce budget deficits by $81 billion over the next decade." (Galen Institute)
House Votes to Kill CLASS Program, LTCI Provision of Affordable Care Act
"The U.S. House of Representatives voted 267 to 159 [on Wednesday Feb. 1] to repeal the CLASS Program, a stagnating program that was a crucial component of the Affordable Care Act. . . . The bill's chances in the Senate, controlled by Democrats, [are] far less certain." (LifeHealthPro)
Judge Says Same-Sex Health-Coverage Ban Biased
"A federal judge signaled Thursday that she's likely to strike down a federal law that denies long-term health coverage to the same-sex domestic partners of state employees in California, saying it appears to be based on prejudice against gays and lesbians." (The San Francisco Chronicle)
Five Reasons to Offer LTC Insurance in 2012
"According to EM-Power Services, a provider of long-term care insurance and employee benefits services, LTCI is an important benefit that should be offered by employers in 2012, especially as the U.S. is expected to face rapid growth among the age 65 and older population." (BenefitsPro)
The Calculating Required Before Buying a Long-Term Care Policy
"The question of whether to get long-term care insurance bedevils consumers and their advisers. Unlike medical insurance, it is intended primarily to cover people who need assistance with so-called activities of daily living . . . ." (The Henry J. Kaiser Family Foundation)
Should You Buy Long-Term Care Insurance? Maybe Not
"Medicaid is no bargain. Still, why buy insurance for something you can get for 'free' from the government? And that helps explain why the report from the Society of Actuaries suggests that those with savings of less than $250,000 may not want to buy private insurance, while those with assets exceeding $2 million may not need to." (Forbes)
Cost of Long-Term Care Requires Additional Financial Planning
"According to Northwestern Mutual's 'Cost of Long-Term Care Study,' while the costs vary widely based on location and type of care, the study shows that the national average daily rate for a single occupancy, private nursing home room is $246.06 per day, or almost $90,000 for one year of care." (PLANSPONSOR.COM)
Six Considerations When Shopping for LTC Insurance
"Here are six basic factors for you and your employees to consider about LTC coverage: 1. The elimination period. . . . 2. The benefit period. . . . 3. Inflation riders. . . . 4. Shared benefits. . . . 5. Premiums. . . . 6. Financial stability of the insurance carrier." (Employee Benefit News)
Six Basic Considerations for Employees When Shopping for LTC Insurance
"[The first basic factor] to consider about LTC coverage: 1. The elimination period. This is the time between the beginning of a claim and when the policyholder is actually eligible to receive benefits. Most policies require some period of paying for care out of the insured's assets. The longer the elimination period, the lower the premium. Rather than a 30-day elimination period, consider a 60-, 90-, or even 180-day period." (Employee Benefit News)
Shelving of CLASS Act Presents Opportunities and Challenges for Employers and Employees
"[T]he CLASS Act was an incredible catalyst for the long term care discussion in the workplace. It's gotten it onto the radar screen for benefit managers. Now that we have clarity that they're not implementing it, it sends a clear message to Americans and to benefits managers that the responsibly is on us: The federal government is not going to provide an option, so we better take personal responsibility.'" (Employee Benefit News)
House Committee Votes to Repeal CLASS Act
"While some Democrats have argued for restructuring the Community Living Assistance Services and Supports Act (CLASS) and the White House opposes repealing the program, Republicans insist on scrapping it in its entirety, saying the law would be a long-term drag on the federal budget." (The Washington Times)
[Opinion] Video: How Can We Address Long-Term Care without CLASS?
"Richard Johnson talks us through ways [CLASS] could be revitalized, new policies that could boost participation in the private market, and public-private options that could help achieve higher rates of coverage." (Urban Institute)
Comments to to HHS on Implications of GINA Application to Long-Term Care (PDF)
A joint work group comprised of members of the SOA Long-Term Section Council and the Academy's Federal Long-Term Care Task Force submitted a letter to HHS Secretary Sebelius regarding the department's extension of the Genetic Information Nondiscrimination Act (GINA) to long-term care insurance in proposed regulations. (American Academy of Actuaries)
Long-Term Care Costs: What's Next?
"What can those who were likely to benefit from the CLASS Act do now to pay for their current or anticipated long-term-care needs? How can the country deliver and finance long-term-care for its rapidly aging population? What role will providers play as Medicare and Medicaid payments are cut?" (MarketWatch)
What Happened to The CLASS Act?
"Program on Retirement Policy Director Richard Johnson walks us through CLASS's aims and design, why greater access to long-term care is needed, and where the program ran into problems." (Urban Institute)
[Guidance Overview] Milliman's Monthly Benefit News and Developments, November 2011 (PDF)
Highlights of recent legislative activity; regulatory round-up. (Milliman)
The 2011 MetLife Market Long-Term Care Costs' Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs (PDF)
"This market survey, conducted in conjunction with LifePlans, Inc., contains daily private-pay rates for private and semi-private rooms in licensed nursing homes, monthly base rates for assisted living communities, hourly rates for home health aides from licensed agencies and agency-provided homemaker companion services, and daily rates for adult day services across the United States." (Metropolitan Life Insurance Company)
[Opinion] The CLASS Act, Part of the Health Reform Bill, Quietly Abandoned
"This abandonment of what Obama saw as an ultimately unworkable program leaves open the question of just how the nation will pay for the long-term care needs of some 20 million Americans." (The Century Foundation)
IRS Announces Key Benefit Plan Limits for 2012 (PDF)
"The IRS has issued . . . the retirement plan limits for 2012, and [the] 2012 limits for qualified transportation fringe benefits, adoption assistance programs, long-term care products, and medical savings accounts." (Buck Consultants, LLC)
[Opinion] Four Ways to Fix Long-Term Care
"'If you got bunch of real long-term care wonks in a room, we could figure something out,' says Duke University's Donald Taylor, a health care economist. I spent most of yesterday talking to those wonks, and here are four solutions they came up with . . . ." (The Washington Post; free registration required)
[Opinion] Behind the Class Act, a Numbers Game
"The primary stumbling block, as Class critics have pointed out since it was enacted as part of the Affordable Care Act, was the potential for so-called adverse selection -- the chance that too many people needing benefits (because they were already sick or disabled or soon would be) would enroll without enough younger, healthier people joining up, paying premiums and balancing the risk." (The New York Times; free registration required)
HHS Suspends CLASS Program Indefinitely
"In suspending the CLASS program, HHS cited actuarial and solvency impediments as the reason why they had 'not identified a way to make CLASS work at this time.'" (Faegre & Benson LLP)
[Opinion] CLASS Long-Term Care Insurance Is Dead, but What Comes Next?
"Where do we go from here? Most independent analysts recognize that the model most likely to succeed for long-term care insurance is a system of universal coverage." (The Henry J. Kaiser Family Foundation)
Obama Administration Pulls Plug On CLASS, the Long-Term Care Program
"After looking at a variety of options, the Obama administration determined the CLASS Act program could not simultaneously meet three important criteria: be self-sustaining, financially sound for 75 years and affordable to consumers." (The Henry J. Kaiser Family Foundation)
What Factors Affect the Future of Class: The Community Living Assistance Services and Supports Act
"[HHS] has promised to release in mid-October a detailed analysis of what can be done to shore up the program's financial structure, based on a review of legal and actuarial reports." (The Henry J. Kaiser Family Foundation)
Lawmakers Raise Doubts about CLASS Act's Future
"The Repeal CLASS Working Group is comprised of Republican leadership in both the House and Senate charged with overseeing implementation of the new health care law. In mid-September, the group released a report apparently detailing the insolvency of the CLASS Act." (Wolters Kluwer Law & Business / CCH)
Some Optimism for CLASS Act's Future; Anticipation Mounts Regarding Essential Benefits Report
"News outlets report on these health law implementation topics, including news that some advocates say the Obama administration's upcoming release of an analysis of the CLASS program is a positive sign. Meanwhile, the Institute of Medicine is expected to unveil its recommendations for medical coverage standards next week." (The Henry J. Kaiser Family Foundation)
Analyzing the Health Law's Tax Credits and the Class Act's Future
"This round-up of health law implementation news also includes a report that the comment period for state health exchanges has been extended and news that Catholic organizations have stepped-up their opposition to the measure's requirement that contraceptive services be covered." (The Henry J. Kaiser Family Foundation)
Insuring Long Term Care in the U.S.
"Long-term care expenditures constitute one of the largest uninsured financial risks facing the elderly in the United States. This paper provides an overview of the economic and policy issues surrounding insuring long-term care expenditure risk. Through this lens we also discuss the likely impact of recent long-term care public policy initiatives at both the state and federal level." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
CLASS Act's Future is in Doubth
"The health law's long-term care program, which has faced concerns about its fiscal sustainability, appears at risk following reports that the HHS office overseeing it faces a key staff reduction." (Kaiser Health News)
CLASS is Adjourned; Long-Term Care Federal Program on Hold
Administration officials have decided to postpone implementation of the CLASS voluntary long-term care program ('Community Living Assistance Services and Supports') created under the recent federal healthcare reform legislation. Concerns have been raised about its cost. (Associated Press via Forbes)
[Guidance Overview] Payments to Caregivers Are Deductible as Qualified Long-Term Care Expenses
"The most important thing for employers and administrators to remember about the tax court's decision is what it does not say. Specifically, although qualified long-term care services can be deductible on an individual's tax return, health FSAs cannot reimburse them on a tax-free basis. Similarly, most HRAs may not reimburse qualified long-term care services. . . . In contrast, HSAs can reimburse long-term care services tax-free." (Thomson Reuters/EBIA)
[Guidance Overview] IRS Interim Guidance on Federal Income Tax Treatment of Annuity and Life Insurance Contracts with Long-Term Care Insurance Feature (PDF)
"The Notice requests public comment on several questions 'to assist in the development of further guidance' concerning the taxation of combination products." (Sutherland Asbill & Brennan LLP)
GAO Report on Long-Term Care Insurance: Carrier Interest in Federal Program, Changes to Its Actuarial Assumptions, and OPM Oversight
"In this report, GAO describes (1) factors affecting carriers' interest in FLTCIP, (2) how the actuarial assumptions used to set FLTCIP premiums have changed since the program's inception, and (3) OPM's oversight of actuarial assumptions and experience and program communications." (U.S. Government Accountability Office)
Gang Of Six Deficit Plan: Executive Summary
"The plan uses a two-step legislative process: (1) an initial bill that makes immediate cuts; and (2) a process for a second bill to enact comprehensive reform and put our nation on a stable fiscal path." (Gang of Six via Henry J. Kaiser Family Foundation)
AARP Study Finds Toll on Family Caregivers Is 'Huge'
"Modern medicine now allows people to manage chronic conditions for decades. But the AARP study finds increasingly complicated procedures are routinely expected of family caregivers." (AARP)
[Guidance Overview] Tax Court Allows Deduction for Payment to Long-Term Caregivers
"Amounts paid for qualified long-term-care services are deductible as medical expenses under section 213(d)(1). Qualified long-term-care services include personal care services required by a chronically ill individual and provided pursuant to a plan of care prescribed by a licensed physician (IRC ? 7702B(c)(1))." (American Institute of Certified Public Accountants)
[Guidance Overview] CLASS Program Scheduled to Begin Operation in Fall of 2012
"Secretary Sebelius has also stated that HHS wants to make sure the Program is appealing to employers and their employees. Why? Because one of its key components is a mandate for HHS and the Department of Treasury to develop procedures under which you can automatically enroll your employees, allowing them to pay the required premium through payroll deduction." (Miller, Johnson, Snell & Cummiskey P.L.C.)
Average Long-term Health Care Claim $159,000 This Year: Analysis
"The average annual claim cost per bed, which has hovered around $1,400 for the past five years, is projected to increase to $1,430 this year." (Business Insurance)
Health Care Reform's 'Class Act' Needs Employer Support to Be Viable
"[A] way to potential success here is through automatic enrollment: getting those employers who do sign on to put every employee in the government [LTC] plan and let individuals opt out later if they so choose." (The New York Times; free registration required)
[Guidance Overview] CLASS Program FAQs from HHS (PDF)
"HHS recently released FAQs relating to the CLASS program, a long-term care program established by PPACA. The FAQs address, in very general terms, who will be eligible to enroll in and receive benefits under the program, what benefits the program may or must offer, and the employer's role in the program." (Buck Consultants)
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