In-Network Senior Health Insurance
When a good friend of mine asked where she could get information about health insurance for her elderly mother who lived out of state, I told her to try the Internet.
He informed me a week later, in despair: “I’m giving up, I’m too confused.” He had taken on a daunting project with his widowed mother, living in another state. As an only child, and after the sudden death of his father, it was up to him to take care of his mother.
In this world of technology, the family unit often lives in different geographic areas and family members are often quite involved with their own lives, careers, and families. Also, when both parents are alive, often one or both parents are quite independent and do not require much help. As time goes by things of course change and sometimes they change very suddenly. There may be a crisis regarding the health care needs of one or both elderly parents.
With our baby boomers facing this problem in ever-increasing numbers, and with the information superhighway in full bloom, there is a clear need for planning.
Protecting your parents’ assets and health is a huge and daunting undertaking, requiring an enormous amount of education and practical application. Our seniors face many diverse responsibilities as they turn 65. To name just a few: estate planning, taxes, Medicare, social security, wills, insurance, and various other legal and financial matters. All of these different areas require the expertise of accountants, attorneys, estate planners, insurance agents, real estate brokers, financial advisors, and others.
The Internet is a good starting point for most people to find resources for questions and solutions to their problems. However, there is no substitute for sound, intelligent advice from an expert.
Twenty years ago, senior insurance was sold by “senior insurance specialists,” with just a handful of companies in each state. Most of the programs were Medi-gap or Medicare supplemental policies, which covered expenses not covered by Medicare, including medical and hospital deductibles, durable medical devices, and unapproved Medicare costs. Ironically, these specialists did not sell many nursing care policies, even though Medicare paid a national average of less than 2% of these expenses. With the advent of “financial and estate planning” and the entry of more insurance companies into this market, a broader and more diversified line of products became available to agents, brokers, planners, and seniors.
Part of this new diversification was the “home health care plan”, sold alone and in conjunction with senior health insurance products. The appeal of the “home health care policy” was that a senior could stay home and still receive custodial and medical benefits, allowing them to recover in the comfort of their own home.
This was the answer to a big problem. The last place an elderly person wanted to go was a “retirement home”, or “rest home”, or, God forbid, the “rest home”. It seemed that older people could now rely on this new innovation without worrying about having to move from their familiar surroundings in the event of a health problem.
As with most things, “if it’s too good to be true”… Home health care policy is no exception. The problem is that there is not enough coverage for a long illness or recovery time. The fact is, the new trend is toward an all-in-one facility, allowing for a variety of levels of care in one place. In other words, a senior could start with little or no concern for health care in a less expensive, self-contained area, and then move on to an assisted living or nursing facility, all within the same complex.
A “nursing home” requires a nurse on the premises 24 hours a day, assisted living is only eight hours. The advantages of this are financial. The patient or older adult is only charged according to the level of care required during the time they remain admitted to that facility. Another benefit is that it relieves a lot of planning because care is provided as needed. Medical care is available to all residents regardless of their current health status.
Some people are offered a lifetime package, which covers your care for the rest of your life, regardless of your current age. It also allows for social outlets to an otherwise somewhat isolated group. Online shopping services have become big business. It is definitely here to stay and many insurance policies are purchased through internet quotes and online applications.
There are literally hundreds of thousands of insurance agents and brokers advertising on the Internet. Most of them will provide instant online quotes and even applications for prospective policyholders. I strongly discourage a layman from buying insurance this way. A little knowledge can be dangerous.
The federal government has mandated all states through legislation, standardized senior health insurance policy guidelines, which are governed and regulated by each state insurance department.
There are plans for almost every level of health. Some are designed and priced for a less healthy individual. Others are for a person with minimal health problems. . The whole concept of insurance is to provide protection for “unanticipated” illness or injury, especially catastrophic expenses, that would devastate a person’s net worth. The more small expenses a person is willing or able to pay (self-insurance), the lower the rate. I recommend this strategy when evaluating your insurance options.
Another consideration when reviewing various insurance plans is to look at the company itself. How long has the company been selling this type of insurance? Do they have many complaints filed with the local insurance department? Are the rates stable? Do you pay claims on time? Service? Most agents talk about the rating. These grades are as follows: A+, A, A-, B+, B, B-, C+, C, C-, or “no grade.”
Don’t be fooled by qualifying alone. It is good to have a high rating, but it is much better to have a company that has longevity, stability, innovation, service and experience. The problem is that some companies enter a market and quickly leave without explanation. This does not give security to the insured.
The most important consideration should be a review of the profit and loss ratio of that product. This will establish stability and longevity in the market. An insurance company with moderate profit in a particular line of business will remain in that market. On the other hand, a losing company will make changes and possibly even withdraw. This information is not normally available to Internet users.
Before entering into an insurance contract, the older person, family and other advisers must be realistic and a careful assessment of the whole picture must be considered. Consideration should be given to the age, health of the older person, financial resources, personality and attitude of the older person, and most importantly, the wishes of the older person.
Early planning is important, as qualification becomes increasingly difficult as an applicant’s health worsens. The senior healthcare market is complex. I will offer a few words of advice to try to alleviate possible pitfalls.
* Choose a knowledgeable, experienced and service-oriented agent or broker to assist you in your decision-making process. The professional can offer invaluable information, but don’t be afraid to ask lots of questions and even get a second opinion.
*Don’t wait until your parent or loved one is sick or injured. Plan ahead and take the time to cover all the options.
* Choose an insurance company with experience. A company that has been in business for a significant time and has maintained a balance of fees and benefits and strong risk selection with moderate rate increases over time is your best bet.
*The plan must be flexible, with a wide range of options and selections of benefits for the insured. There should be no tricks or complicated language for coverage. An unbelievably low rate is a red flag of trouble ahead.
* Don’t rush or be rushed by an overly pushy salesperson.
This policy will not be cheap and should be read and reviewed to clearly understand the content. This is one of the advantages of the Internet. You are allowed to read indefinitely before acting.
A long-term care program, with or without insurance coverage, will only work if the senior is involved in the care selection process. If you have any questions about accreditation of a facility, please call the “Continuing Care Accreditation Commission” at 202-783-7286.
