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Protecting Your Parents

By Rich Arzaga, CFP®

A conversation with mom and dad about personal and financial matters is not easy for many families. But as parents get older, especially those in their 70s and 80s, we found with our clients that many parents appreciate the assistance of adult children. If this might be the case for you, the next question becomes, what type of support should you consider offering.

Estate Planning Documents

In general, fifty percent (50%) of all families do not have an estate plan. If you are receiving this message, you (and likely your friends and family) probably have complicated enough assets to qualify for needing an estate plan. Further, of the approximate fifty percent (50%) who do have an estate plan, about one-half of those plans are outdated or incorrect, and may likely cause challenges when executing. In short, there is a seventy-five percent (75%) chance your parents’ estate plan is out-of-sorts. Maintaining proper estate planning done is table stakes. You can help by encouraging parents, aunts, and uncles to visit an estate planning attorney. If you need a recommendation, we’re happy to offer you a few names to consider.

Identity Protection

Older Americans are subject to identity theft and could use your help. Consider the following:

  • Credit freeze. Credit bureaus offer this service. Creating a freeze is no charge. The cost for “Lifting” a freeze for specific credit inquiries is nominal – about $10 per service. My family has employed a credit freeze since this option became available in 2003-2004 and has gladly paid for the Lifts as needed. The credit freeze has been our family’s best approach to help prevent credit fraud. It gives me peace of mind that I have control of legitimate credit queries and new accounts.
  • Credit Reports. Review your parent’s credit reports with them to make sure all reported creditors are correct, and to update any other personal information. More importantly, resolve listings of creditors that are incorrect, and consider closing credit that is no longer needed.
  • Personal Information. Drivers licenses, State Identification Cards, Passports, and Social Security Cards. Consider securing in one place items that not regularly used. And ask to make copies for your records, then scan and secure these copies with an encrypted electronic service. For our clients, we offer an electronic vault called WealthVision that features encryption standards that exceed those of many banks. If you don’t work with us, ask your advisor if they offer a similar service.

Telemarketers

  • If not already set up, consider caller-ID for your parent’s home phone. Encourage your parents to let all calls they don’t recognize go to voice mail. This small idea should significantly reduce the risk of telephone scams. This same principal should apply to their cell phones.
  • Add a call blocking tool to the home phone. I don’t know of any service that is full-proof, but having something is a step in the right direction. I’m not entirely delighted with ours, so I if you come across one you have had success with, please let me know.
  • Your parents need to know the difference between someone they call and someone who call them. If they make the call, they know who that other person is. A person calling them with an emergency should be viewed as suspicious. If this happens, encourage your parents to call you or other family members to confirm or for help. Assure them that asking for a number to call back and waiting to confirm is prudent and safer for all family members. If the incoming caller insists and will not leave their name and number, then ask your parents to encourage them to call 911. And tell your parents about the call my mother-in-law received from a kid who started the call with “Grandma?” My mother-in-law filled in the blank and responded by using my daughter’s name, asking if this was her. Fortunately, she knew my daughter’s voice well enough to hang up. Very upsetting for everyone, but it could have been worse.

Technology

  • Cell phones, laptops, iPads. Check them all for updates and patches.
  • Passwords. Consider strengthening passwords and using a password manager to help your parents manage this. If a password manager becomes problematic (they often duplicate entries and cause confusion), using a password that is a combination of things in their life might be the solution. Example: first house address numbers + second home street name + current home city abbreviation + children’s birth years + the number of grandchildren or pets minus the number of previous marriages!
  • Social media. Ask your parents to list for you their various social media accounts and passwords. This idea becomes especially useful as they get too old or unable to use.

Be their advocate. This can include adding yourself to

  • conversations with vendors solving problems.
  • discussions with caregivers. Make sure to take notes.
  • visits with financial advisors. Our most rewarding meeting is with older clients who include their adult children. The synergy can be more productive than a meeting with the parents alone.
  • Ask to be listed as a contingent contact on financial accounts. This option is relatively new and required by financial institutions to be offered. Take advantage of it.

If there is any part of this you would like to explore, feel free to contact Cornerstone Wealth Management at 925-824-2880. We are happy to help if we can.

#ElderCare

#EstatePlanning

#HealthCare

#PersonalAdvice

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How Medigap Choices Are Changing

Plan F is fading away, and Plan G may become the most selected option.

Soon, the most popular Medigap policy will no longer be sold. Seniors will lose the chance to buy Plan F in 2020 as well as the less popular Plan C.1,2

These policies cover Medicare’s Part B deductible, which is currently $183. A new federal law prevents the sale of any Medigap policies that cover this deductible once the 2020s begin.2

Be assured, if you already have Plan F (or Plan C) coverage, you can stick with it after 2020. You just cannot buy a new Plan F (or C) policy after that date.2

What does this mean if you are considering a Plan F policy? The short answer is that if you want to buy Plan F coverage, you have until the end of 2019 to do so. That said, you could be better off with Plan G in the next decade, barring a big jump in Medigap premiums.1,2

Why do people like Plan F? It is basically a “Cadillac plan”: it lets you see any doctor or hospital that accepts Medicare patients, and the upfront cost is the total cost. With Plan F, you are not surprised by subsequent requests to pay a deductible, a copayment, or coinsurance.1

How does Plan G differ from Plan F? While both plans provide similar coverage, the major differences are about dollars and cents. Plan G asks you for the $183 Part B deductible; Plan F does not. Premiums also differ notably. Coming into the fourth quarter of 2018, monthly payments on a Plan F policy averaged $185.96. Average monthly premiums on a Plan G policy? Just $155.70.1,2

Plan G appears to be gaining popularity. CSG Actuarial, a firm that provides data to insurance companies, reports that 37% of new Medigap enrollees are choosing Plan G (although 53% still choose Plan F).1

What will happen to Plan F and Plan G premiums in the 2020s is hard to say. Plan F premiums may jump because the supply of 65-year-olds buying Plan F will be abruptly cut, leaving an older and less healthy population to cover. Plan G premiums could rise also because a Medigap plan must accept new enrollees by the terms of Medicare regardless of how healthy or ill they may be. The current $183 Plan G deductible might significantly increase as well.1

Do you think you might switch out of one Medigap policy to another? That move may be harder to make once 2020 rolls around. If it has been more than six months since you enrolled in Medicare Part B and you want to switch Medigap plans or supplement traditional Medicare with one, some Medigap insurers in certain states may exercise their right to charge you more in view of pre-existing health conditions and even turn you down. It is possible that states may intervene and pass new regulations to prevent this in the coming years.1,2

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.Citations.

1 – reuters.com/article/us-column-marksjarvis-medigap/medicare-supplement-plans-are-changing-what-you-need-to-know-idUSKCN1LZ18F [9/19/18]
2 – kiplinger.com/article/retirement/T039-C001-S001-two-medigap-plans-to-be-phased-out.html [8/10/18]

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Role of tending to family members typically falls to women

65 percent of older adults rely on family and friends for long-term care needs”

As parents reach their golden years, many need their adult children’s help for daily living or for simple tasks like rides to doctor’s appointments and going to the grocery store or more intense care such as dressing, bathing and administering medication.

According to the Family Caregiver Alliance, 65 percent of older adults rely on family and friends for long-term care needs with 30 percent supplementing family care with paid providers. These informal providers give nearly $500 billion in valued services. A majority of the time — an estimated 66 percent — the caretaking tasks fall to women who give at least 20 hours of unpaid care on average while also balancing their own families and working outside the home.

When folks are giving so much of themselves to others, caregivers often suffer burnout from physical, mental and emotional exhaustion, including anxiety, stress and depression. “You have to make sure that you are not overextending yourself,” said Tammy Bresnahan, AARP’s associate state director for advocacy. “… That is why we recommend that you find breathing exercises and/or yoga or try to carve out a little bit of time for yourself so you are not all consumed.”

She suggests siblings may want to split up duties if possible, such as one takes the parent to doctor’s appointments while the other does home visits.

Elizabeth Weglein, CEO of the Elizabeth Cooney Care Network, believes it is important for caregivers to take time for themselves.

“If you are able to take care of yourself, you can take better care of someone else,” she said. “Most caregivers put themselves at the bottom row and take care of themselves last. Their health deteriorates fairly quickly. So really the mantra should be always take care of yourself.”

The advice is similar to the scenario you hear before an airplane flight from attendants who instruct caregivers, in the case of an emergency, to put on their oxygen masks first before helping their loved ones.

“Caregivers don’t always realize it when they are in the midst of it,” Weglein said. “They need to be taking care of themselves, getting time off. Even just going to the grocery store alone or going to get their hair done or seeing a friend and having lunch. Just having some downtime to talk. The value of that break is so high.”

One of the biggest needs for caregivers is respite care. Some caregivers need to attend out-of-town funerals or important events. Others need to have surgery or be in a medical facility for a short time.

Maryland is one of 16 states that utilizes a federal grant to provide emergency respite care services within 72 hours, allotting families $225 a year for services. Beginning in fall 2017, the Elizabeth Cooney Care Network serves as administrator.

“The individuals who have utilized (the grant) were very thankful,” Weglein said. “They really did not have any resources to turn if it had not been for the grant. …The good part is it doesn’t have a lot of strings. There is no economic requirement. They just have to have a need. It is supporting respite care which means it is helping the primary caregiver.”

Weglein believes the grant is unique because it can be triggered so quickly and families may call themselves.

“In Maryland, there are a lot of gatekeepers where you have to call this entity, get prequalified and then call,” Weglein said. “This particular grant was really designed to be very free and accessible that a family caregiver could just call Elizabeth Cooney 24 hours a day, trigger the grant and then services would be rendered within a 72-hour period for the total of $225. We’ve been very creative with that $225 to create support systems that really maximize the need for that individual.”

The Maryland Healthy Families Working Act, which took effect in February, also helps caregivers. The bill, vetoed by Gov. Larry Hogan but overridden by the Maryland General Assembly, requires employers with 15 or more employees to provide paid sick/safe leave for up to five days. Before the act, some fields, such as retail and food service, had no paid sick/safe leave.

“There is some fear from some businesses that it is going to hurt the business,” Weglein said. “… My perspective on how we treat our employees and also how we treat our clients (is) you support your team. The stronger and happier and healthier your team is, the stronger your company is.”

Weglein notes the better we understand taking care of our own families, especially with the aging population, the better we will be as a society in the state.

“Overall, financially, if we keep and take care of our citizens, it is really a matter of keeping our economic base strong so people don’t move to Delaware,” Weglein said. “They don’t move to Florida or North Carolina. They don’t look and seek other pathways to get care.”

This Article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual.

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How Much Do You Really Know About Long-Term Care?

Separating some eldercare facts from some eldercare myths.

How much does eldercare cost, and how do you arrange it when it is needed? The average person might have difficulty answering those two questions, for the answers are not widely known. For clarification, here are some facts to dispel some myths.

True or false: Medicare will pay for your mom or dad’s nursing home care.

FALSE, because Medicare is not long-term care insurance.1

Part A of Medicare will pay the bill for up to 20 days of skilled nursing facility care – but after that, you or your parents may have to pay some costs out-of-pocket. After 100 days, Medicare will not pay a penny of nursing home costs – it will all have to be paid out-of-pocket, unless the patient can somehow go without skilled nursing care for 60 days or 30 days including a 3-day hospital stay. In those instances, Medicare’s “clock” resets.2

True or false: a semi-private room in a nursing home costs about $35,000 a year.

FALSE. According to Genworth Financial’s most recent Cost of Care Survey, the median cost is now $85,775. A semi-private room in an assisted living facility has a median annual cost of $45,000 annually. A home health aide? $49,192 yearly. Even if you just need someone to help mom or dad with eating, bathing, or getting dressed, the median hourly expense is not cheap: non-medical home aides, according to Genworth, run about $21 per hour, which at 10 hours a week means nearly $11,000 a year.3,4

True or false: about 40% of today’s 65-year-olds will eventually need long-term care.

FALSE. The Department of Health and Human Services estimates that close to 70% will. About a third of 65-year-olds may never need such care, but one-fifth are projected to require it for more than five years.5

True or false: the earlier you buy long-term care insurance, the less expensive it is.

TRUE. As with life insurance, younger policyholders pay lower premiums. Premiums climb notably for those who wait until their mid-sixties to buy coverage. The American Association for Long-Term Care Insurance’s 2018 price index notes that a 60-year-old couple will pay an average of $3,490 a year for a policy with an initial daily benefit of $150 for up to three years and a 90-day elimination period. A 65-year-old couple pays an average of $4,675 annually for the same coverage. This is a 34% difference.6

True or false: Medicaid can pay nursing home costs.

TRUE. The question is, do you really want that to happen? While Medicaid rules vary per state, in most instances a person may only qualify for Medicaid if they have no more than $2,000 in “countable” assets ($3,000 for a couple). Countable assets include bank accounts, equity investments, certificates of deposit, rental or vacation homes, investment real estate, and even second cars owned by a household (assets held within certain trusts may be exempt). A homeowner can even be disqualified from Medicaid for having too much home equity. A primary residence, a primary motor vehicle, personal property and household items, burial funds of less than $1,500, and tiny life insurance policies with face value of less than $1,500 are not countable. So yes, at the brink of poverty, Medicaid may end up paying long-term care expenses.4,7

Sadly, many Americans seem to think that the government will ride to the rescue when they or their loved ones need nursing home care or assisted living. Two-thirds of people polled in another Genworth Financial survey about eldercare held this expectation.4

In reality, government programs do not help the average household pay for any sustained eldercare expenses. The financial responsibility largely falls on you.

A little planning now could make a big difference in the years to come. Call or email an insurance professional today to learn more about ways to pay for long-term care and to discuss your options. You may want to find a way to address this concern, as it could seriously threaten your net worth and your retirement savings.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – medicare.gov/coverage/long-term-care.html [6/5/18]
2 – medicare.gov/coverage/long-term-care.html [6/5/18]
3 – fool.com/retirement/2018/05/24/the-1-retirement-expense-were-still-not-preparing.aspx [5/24/18]
4 – forbes.com/sites/nextavenue/2017/09/26/the-staggering-prices-of-long-term-care-2017/ [9/26/17]
5 – longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html [10/10/17]
6 – fool.com/retirement/2018/02/02/your-2018-guide-to-long-term-care-insurance.aspx [2/2/18]
7 – longtermcare.acl.gov/medicare-medicaid-more/medicaid/medicaid-eligibility/financial-requirements-assets.html [10/10/17]

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Long-Term-Care Insurance Isn’t Dead. It’s Now an Estate-Planning Tool

Last year, after finishing with college tuition for their three children, Jessica Galligan Goldsmith and her husband, James, treated themselves to something she had long wanted: long-term-care insurance.

It hasn’t been cheap. The couple, both lawyers in their mid-50s, will shell out more than $320,000 between them over a decade. For that, they will be able to tap into benefits topping $1 million apiece by the time they are in their 80s, the age when many Americans suffer from dementia or other illnesses that require full-time care.

Plus, the policies pay out death benefits if long-term care isn’t ultimately needed, and most provide 10% to 20% of the original death benefit even if the long-term-care proceeds are fully tapped.

Such policies that combine long-term-care coverage with a potential life-insurance benefit are called “hybrids,” and they are reshaping the long-term-care niche of the U.S. insurance industry just as it had appeared headed for obsolescence, financial advisers say. The Goldsmiths were among 260,000 purchasers last year nationwide of these hybrids, according to industry-funded research firm LIMRA, far outpacing the 66,000 traditional long-term-care policies sold in 2017.

When long-term-care insurance took off in the 1990s, insurers aimed for the broad middle class of America. The pitch was that policies would save ordinary families from entirely draining their savings, leaning on children or enrolling in the federal-state Medicaid program for the poor. (Medicare pays for nursing-home stays only in limited circumstances.)

Now, many insurers are finding their best sales opportunity with wealthy Americans. Many of these people may be able to afford costly care later in their lives, but they are buying the contracts to protect large estates, advisers say. ​​

Ms. Goldsmith wanted long-term-care coverage partly because her legal specialty is trusts and estates and she has seen families whose seven-figure investment portfolios were devastated by years of care for spouses.

“What felt like a good nest egg” can be hit by “astronomical expenses,” says Ms. Goldsmith, of Westchester County outside New York City. Their policies are from a unit of Nationwide Mutual Insurance Co.

According to federal-government projections, about a quarter of Americans turning 65 between 2015 and 2019 will need up to two years of long-term care. Twelve percent will need two to five years, and 14% will need more than five years. At $15 an hour, around-the-clock aides run $131,400 a year, while private rooms in nursing homes top $100,000 in many places.

Hybrids can cost even more than traditional standalone products because they typically include extra features. There is wide variation across the hybrid category and the type the Goldsmiths bought (known as “asset-based long-term-care”) includes a particularly valuable feature: a guarantee that premium rates won’t increase.

Traditional long-term care policies fell from favor in the mid-2000s after many insurers obtained approval from state regulators for steep rate increases—some totaling more than 100%—due to serious pricing errors. In May, Massachusetts Mutual Life Insurance Co. began applying for average increases of about 77% that would apply to about 54,000 of its 72,000 LTC policyholders. Until this move, MassMutual hadn’t previously asked longtime policyholders to kick in more to better cover expected payouts.

Affluent buyers also can afford to pay for their hybrid policies within 10 years, as many insurers require. However at least one big carrier, Lincoln National Corp. , has begun allowing people in their 40s and early 50s to spread payments over more years, provided they fully pay by age 65.

Besides the death benefit—which is as much as $432,000 on a combined basis for the Goldsmiths—hybrids also include a “return of premium” feature. This allows buyers to recoup much of their money if they want out of the transaction, albeit without interest.

“We call these ‘live, die, change your mind’ policies,” says Natalie Karp, the Goldsmiths’ agent and co-founder of Karp Loshak LTC Insurance Solutions, a brokerage in Roslyn, N.Y.

About a dozen insurers still offer traditional long-term-care policies that typically lack those features. They charge more and provide shorter benefit periods than they did in the past. But Tim Cope, a financial adviser in South Burlington, Vt., for insurance brokerage NFP, says the good news is that “policies continue to pay for much-needed care, and changes in their policy design, pricing and underwriting are an effort to minimize premium increases on recently issued and new policies.”

Many advisers favor standalone and hybrid offerings of three of the nation’s largest and financially strongest insurers: MassMutual, New York Life Insurance Co. and Northwestern Mutual Life Insurance Co.

Ms. Goldsmith says she was attracted to the Nationwide hybrid because it doesn’t require submission of receipts to obtain the long-term-care proceeds. Benefits are payable in cash when a physician certifies a severe cognitive impairment or inability to perform basic activities, such as bathing, eating and dressing. Payments are capped at specified monthly amounts. For the Goldsmiths, the monthly benefit starts at $9,000 per spouse and grows with an inflation adjustment to more than $15,000 in their 80s.

“Receipts are very hard for older people to deal with, especially when stressed by caring for a disabled spouse or being disabled themselves,” Ms. Goldsmith says.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. It contains references to individuals or entities that are not affiliated with Cornerstone Wealth Management, Inc. or LPL Financial.
All illustrations are hypothetical and are not representative of any specific investment.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.
If you need more information or would like personal advice you should consult an insurance professional.

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Life Insurance Products with Long-Term Care Riders

Are they worthwhile alternatives to traditional LTC policies?

The price of long-term care insurance has really gone up. If you are a baby boomer and you have kept your eye on it for a few years, chances are you have noticed this. Last year, the American Association for Long-Term Care Insurance (AALTCI) noted that a 60-year-old couple would pay an average of $3,490 a year in premiums for a standalone LTC policy.1

Changing demographics and low interest rates have prompted major insurance carriers to stop offering standalone LTC coverage. As Forbes recently noted, about 750,000 consumers purchased long-term care policies in 2002; just 89,000 bought an LTC policy in 2016. The demand for the coverage remains, however – and in response, insurers have introduced new options.2

Recently, hybrid LTC products have outsold traditional LTC policies. Some insurers now offer “cash rich” whole life insurance policies with an option to add long-term care benefits. Other insurance products feature similar riders.2

As these insurance products are doing “double duty” (i.e., one policy or product offering the potential for two kinds of coverage), their premiums are costlier than that of a standalone LTC policy. On the other hand, you can get what you want from one insurance product rather than having to pay for two.3

Hybrid LTC policies provide a death benefit, a percentage of which will go to your heirs. If you end up not needing long-term care, you will still be able to justify the premiums you paid. You can also often add a rider to adjust the LTC benefits of the policy in view of inflation.4,5

The basics of securing LTC coverage applies to these policies. The earlier in life you arrange the coverage – and the healthier you are – the lower the premiums will likely be. If you are not healthy enough to qualify for a standalone LTC insurance policy, you still might qualify for a hybrid policy – sometimes no medical exam by a nurse is necessary.1,3

Hybrid policies have critics as well as fans. Their detractors point out the characteristic that puts off potential policyholders the most: lump sums are commonly required to fund them. An up-front payment in the range of $75,000-$100,000 is typical.4

Funding the whole policy with one huge premium payment has both an upside and a downside. You will not contend with potential premium increases over time, as owners of stock LTC policies often do. (Many retirees wish they could lock in the monthly or quarterly premiums on their traditional LTC policies.) On the other hand, the return on the insurance product may be locked into interest rates lower than you would prefer.4

Since the focus of a hybrid LTC policy is on long-term care coverage, the death benefit may be relatively small compared with that of a pure life insurance policy. Also, the premiums paid on hybrid policies are not tax deductible; premiums paid on conventional LTC policies are.4,5

Another reality is that many seniors have little or no need to buy life insurance. Their heirs will not face inheritance taxes, since their estates will not exceed estate tax thresholds. Moreover, their adult children may be financially stable. Providing a lump sum to these heirs is a nice financial gesture, but the opportunity cost of paying life insurance premiums may be significant.

Life insurance can play a crucial role in estate planning, however – and if a policy manages to combine life insurance and long-term care coverage feature, it may prove useful in multiple ways.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – fool.com/retirement/2018/02/02/your-2018-guide-to-long-term-care-insurance.aspx [2/2/18]
2 – forbes.com/sites/howardgleckman/2017/09/08/the-traditional-long-term-care-insurance-market-crumbles/ [9/8/17]
3 – tinyurl.com/y94mm59c [3/16/18]
4 – consumerreports.org/long-term-care-insurance/long-term-care-insurance-gets-a-makeover/ [8/31/17]
5 – tinyurl.com/y7gbhr7u [10/9/17]

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For the Elderly Who Are Lonely, Robots Offer Companionship

Ironic that the people who might use high tech the least are the folks who can greatly benefit from it. Below is a recent article that moves the classic discussion of elder care into a hard-to-solve area: Engagement.

For the Elderly Who Are Lonely, Robots Offer Companionship

Researchers are testing whether digital assistants can help older people stay healthy

Courtesy of ‘Robots and Chatbots Look After the Elderly.’

Twice a day a little robot in Rayfield Byrd’s living room lights up and asks him a very personal question: “Have you taken your medication?” For the past few weeks, Mr. Byrd, a 67-year-old retired transit worker who lives alone in Oakland, Calif., has been able to proudly answer “yes.”

The portable robot’s name is Mabu, and at the recommendation of his health-care provider, she now lives with Mr. Byrd to help monitor his irregular heartbeat. She checks in on him two or three times a day to make sure he weighs himself, takes his medication and exercises regularly—and relays information back to his health team.

“She’s my little blue-eyed girlfriend,” he says. “She keeps me on my toes.”

Avoiding the ER

With the senior-citizen population expected to nearly double to 88 million by 2050 and some nursing programs stretched thin, researchers and elder-care centers are exploring the potential of digital companions, in robot or chatbot form, to help the elderly. Digital assistants like Mabu and others are being developed to do everything from monitor chronic health conditions to encourage patients to stay active and engaged—with the overall goal being to find ways to meet the needs of a growing elderly population without overburdening the health system.

While the idea of bringing automation to elder care has been discussed for years, recent technological advances in natural-language processing have moved it closer to reality, says Dor Skuler, the founder of the firm behind ElliQ, a robot that encourages the elderly to stay active and connected to loved ones. Before such advances, people had to speak to digital assistants in specific formulaic commands, making the technology difficult and frustrating to use, especially for seniors.

Already, digital assistants have allowed some health systems to cut back on nurse home visits and prevent unnecessary trips to the emergency room.

Element Care , an elder-care program in Boston, last year began dispatching digital avatars, instead of nurses, to help some patients manage their chronic conditions at home. The technology, from Care.coach Corp. , uses an animal avatar on a tablet to remind patients to take their medications and follow their treatment plans. About 70% of what is spoken by the avatar is written out by human specialists working behind the scenes, says Care.coach Chief Executive Victor Wang, while the other 30% is generated via artificial intelligence.

Kendra Seavey, Element Care’s clinical administrative manager, estimates that the center has saved $150,000 in emergency-room costs by assigning Care.coach avatars to patients who make the most frequent hospital trips. Sometimes, the avatars guide patients through breathing exercises to calm them down; other times, just giving patients an ear to talk to prevents them from calling 911.

“We have individuals who just get anxious and want to go to the hospital or are lonely and want to go to the hospital,” she says. “There’s no need for them to go there.”

Alleviating loneliness

Indeed, loneliness is one of the key problems researchers and companies are trying to solve with digital companions. Loneliness is a significant predictor of poor health, and it is widespread, affecting more than one-third of older adults in the U.S., according to a 2010 AARP study.

“Robots that help people connect with and maintain their relationships with others are becoming increasingly important,” says Timothy Bickmore, a professor at Northeastern University who is developing a digital assistant to help the elderly navigate the final stages of life.

While older people aren’t usually early adopters of new technologies, seniors who lack companionship tend to be receptive to having automated friends, says Maja Mataric, a professor of computer science and neuroscience at the University of Southern California. “In many cases their friends have died, no one cares to spend time with them, and the grandkids think they smell funny,” she says. “So when they actually have someone or something that’s interested in them, they are willing to explore it.”

Ms. Mataric, who has studied using robots to improve the attention spans of dementia patients, says robots give patients the illusion of having a physical companion, and the elderly often interact with them in surprising ways, such as by petting them and asking how they are feeling.

Programming robots and chatbots to act as friends is simpler than it might seem, developers say. ElliQ, now in beta testing, turns to face users when they are talking, to show attentiveness, and bounces with excitement when a message arrives from a loved one. Mabu, from Catalia Health Inc., uses eye contact to show it is listening to users.

“It isn’t actually very hard to project empathy,” Ms. Mataric says. “Empathy is what you do, not what you feel.”

Most of today’s socially assistive technology also is designed to be cuddly and cute, defying the stiff and scary stereotype associated with robots in the past. Paro, a speechless lap-sized robot from Japan’s National Institute of Advanced Industrial Science and Technology, looks like a baby seal and is used much like a live therapy animal to soothe patients. Paro, which displays emotional reactions to touch and sound, became a certified medical device in the U.S. in 2009 and has sold roughly 5,000 units world-wide, primarily in Japanese elderly facilities.

Toy maker Hasbro Inc. and researchers at Brown University, meanwhile, have said they would use a $1 million grant from the National Science Foundation to add artificial intelligence to Hasbro’s robotic companions, which resemble cats and dogs, so that they can help the elderly with everyday tasks such as locating lost objects, in addition to providing comfort.

Real people

But even as technological advancements make empathy and companionship easier to simulate, those in the field say digital companions aren’t meant to replace the human touch.

Care.coach’s Mr. Wang says human specialists will remain an important part of his product because building a long-term supportive relationship with a patient requires an actual person.

Real people also are going to be needed to perform the harder, and dirtier, tasks associated with elder care—at least for the foreseeable future, experts say. “We aren’t developing robots who can toilet the elderly anytime soon,” says Ms. Mataric.

This article was prepared by a third party for information purposes only. LPL Tracking # 1-737700

 

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Losing Your financial nest egg is linked to shorter life expectancy

One benefit of creating a financial plan is that the process puts into perspective the importance of collecting singles and doubles in a portfolio rather than swinging for the fences.

The following article is courtesy of the Wall Street Journal. Please forward to anyone you know who is going through a life or financial transition.

Many people lost their life savings in the last recession.

New research on the health damage done.

Is it worse to suddenly lose your financial nest egg or never to have saved any money at all? This question concerns many of us: A quarter of Americans watched much or all of their life savings evaporate during the last recession, while nearly half of U.S. families have nothing put aside for retirement, according to the Economic Policy Institute and federal data.

Either way, there’s no happy answer. Both scenarios can increase our risk of dying within the next 20 years by more than 50%, a recent study shows.

We’ve long known that a financial shock causes immediate distress. Suit-clad men leaping from buildings were dismal hallmarks of the Great Depression, and soon after a major recession began in 2007, there were notable spikes in clinical depression, substance abuse and suicides.

But what about the effects of such a shock over a more extended period? “Does the stress of losing one’s wealth also create a long-term risk?” asked Lindsay Pool, a Northwestern University epidemiologist and the lead author of the new study. Published last month in the Journal of the American Medical Association, her research investigated how losing one’s life savings in the short term might curtail one’s lifespan in the long term.

​To find out, the researchers analyzed how participants in the federally funded Health and Retirement Study fared over a 20-year period. When the study began, researchers selected a nationally representative group of people in their 50s and asked these roughly 8,700 men and women detailed questions about their daily habits, health and financial situation.

Every two years, from 1994 until 2014, the federal study’s investigators called each subject looking for any change in their status and especially for a signal event: the disappearance of 75% or more of a person’s assets during the previous two years. “The reason we look at 75% or more is that we’re looking for a sudden loss, one that’s high enough to be shocking. People are nearing retirement, and all of a sudden their wealth is gone,” said Dr. Pool.

The results showed how profoundly financial loss can damage us. Exactly how this happens at the physiological level is still being worked out, but we already know that stress unleashes hormones that constrict our blood vessels and make our hearts beat faster—thus increasing blood pressure and possibly spurring a future cardiovascular event. Coping with ongoing pressures we cannot control has also been linked to a shorter lifespan.

Loss of control was front and center for the 26% of those in the survey who had endured a wealth shock. They were 50% more likely to have died during the period of the study, compared with participants whose savings remained intact. The researchers statistically controlled for other causes of mortality, such as ill health, job loss, insurance loss and marital breakdown.

Interestingly, women were more likely to have experienced a wealth shock than men, but they were not more likely to die as a result. They were, in short, more financially vulnerable but more resilient physiologically.

The study can’t explain why losing your life savings can kill you, only that it does. But one of the researchers’ findings is clear: At 50%, the mortality risk of those who had lost their nest eggs was lower than for those who never accumulated much for retirement at all; those people were 67% more likely to die than savers. It may be cold comfort, but it seems that it’s better to have saved and lost than never to have saved at all.

This article was prepared by a third party for information purposes only. It is not intended to provide specific advice or recommendations for any individual. LPL tracking # 1-736613

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Why Medicare Should Be Part of Your Retirement Planning

The premiums and coverages vary, and you must realize the differences.

Medicare takes a little time to understand. As you approach age 65, familiarize yourself with its coverage options and their costs and limitations.

Certain features of Medicare can affect health care costs and coverage. Some retirees may do okay with original Medicare (Parts A and B), others might find it lacking and decide to supplement original Medicare with Part C, Part D, or Medigap coverage. In some cases, that may mean paying more for senior health care per month than you initially figured.

How much do Medicare Part A and Part B cost, and what do they cover? Part A is usually free; Part B is not. Part A is hospital insurance and covers up to 100 days of hospital care, home health care, nursing home care, and hospice care. Part B covers doctor visits, outpatient procedures, and lab work. You pay for Part B with monthly premiums, and your Part B premium is based on your income. In 2018, the basic monthly Part B premium is $134; higher-earning Medicare recipients pay more per month. You also typically shoulder 20% of Part B costs after paying the yearly deductible, which is $183 in 2018.1

The copays and deductibles linked to original Medicare can take a bite out of retirement income. In addition, original Medicare does not cover dental, vision, or hearing care, or prescription medicines, or health care services outside the U.S. It pays for no more than 100 consecutive days of skilled nursing home care. These out-of-pocket costs may lead you to look for supplemental Medicare coverage and to plan other ways of paying for long-term care.1,2

Medigap policies help Medicare recipients with some of these copays and deductibles. Sold by private companies, these health care policies will pay a share of certain out-of-pocket medical costs (i.e., costs greater than what original Medicare covers for you). You must have original Medicare coverage in place to purchase one. The Medigap policies being sold today do not offer prescription drug coverage. A monthly premium on a Medigap policy for a 65-year-old man may run from $150-250, so keep that cost range in mind if you are considering Medigap coverage.2,3

In 2020, the two most popular kinds of Medigap plans – Medigap C and Medigap F – will vanish. These plans pay the Medicare Part B deductible, and Medigap policies of that type are being phased out due to the Medicare Access and CHIP Reauthorization Act. Come 2019, you will no longer be able to enroll in them.4

Part D plans cover some (certainly not all) prescription drug expenses. Monthly premiums are averaging $33.50 this year for these standalone plans, which are offered by private insurers. Part D plans currently have yearly deductibles of less than $500.2,5

Some people choose a Part C (Medicare Advantage) plan over original Medicare. These plans, offered by private insurers and approved by Medicare, combine Part A, Part B, and usually Part D coverage and often some vision, dental, and hearing benefits. You pay an additional, minor monthly premium besides your standard Medicare premium for Part C coverage. Some Medicare Advantage plans are health maintenance organizations (HMOs); others, preferred provider organizations (PPOs).6

If you want a Part C plan, should you select an HMO or PPO? About two-thirds of Part C plan enrollees choose HMOs. There is a cost difference. In 2017, the average HMO monthly premium was $29. The average regional PPO monthly premium was $35, while the mean premium for a local PPO was $62.6

HMO plans usually restrict you to doctors within the plan network. If you are a snowbird who travels frequently, you may be out of the Part C plan’s network area for weeks or months and risk paying out-of-network medical expenses from your savings. With PPO plans, you can see out-of-network providers and see specialists without referrals from primary care physicians.6

Now, what if you retire before age 65? COBRA aside, you are looking at either arranging private health insurance coverage or going uninsured until you become eligible for Medicare. You must also factor this possible cost into your retirement planning. The earliest possible date you can arrange Medicare coverage is the first day of the month in which your birthday occurs.5

Medicare planning is integral to your retirement planning. Should you try original Medicare for a while? Should you enroll in a Part C HMO with the goal of keeping your overall out-of-pocket health care expenses lower? There is also the matter of eldercare and the potential need for interim coverage (which will not be cheap) if you retire prior to 65. Discuss these matters with the financial professional you know and trust in your next conversation.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html [5/21/18]
2 – cnbc.com/2018/05/03/medicare-doesnt-cover-everything-heres-how-to-avoid-surprises.html [5/3/18]
3 – medicare.gov/supplement-other-insurance/medigap/whats-medigap.html [5/21/18]
4 – fool.com/retirement/2018/02/05/heads-up-the-most-popular-medigap-plans-are-disapp.aspx [2/5/18]
5 – money.usnews.com/money/retirement/medicare/articles/your-guide-to-medicare-coverage [5/2/18]
6 – cnbc.com/2017/10/18/heres-how-to-snag-the-best-medicare-advantage-plan.html [10/18/17]