In this issue:
Hancock Finds Lingering Confusion about LTC Planning
Most U.S. adults think long term care is much cheaper than it is, and they expect Medicare to cover a far larger share of the LTC tab than it actually does.
About 80% of U.S. adults seem to understand that the average chance of an individual age 65 or older needing long term care is more than 40%, but 70% said they think the average cost of nursing home care is $30,000 per year, according to researchers at John Hancock Life Insurance Company, Boston, a unit of Manulife Financial Corp., Toronto.
The actual national average cost is about $70,000 per year, the researchers report.
Similarly, about 40% of survey participants said they think Medicare covers the cost of nursing home care for people with Alzheimer’s disease.
Medicare does not cover the cost of nursing home care for people with Alzheimer’s disease, the Hancock researchers note.
The researchers drew the statistics from results from a recent survey of 959 U.S. residents ages 21 to 75.
Hancock commissioned the survey to support a private LTC insurance consumer education campaign.
“Long term care can be a very, very tough thing to think about,” said Laura Moore, president of John Hancock Long Term Care, today at a press conference in Washington. “It’s more comfortable not to think about it, and, unfortunately, that’s what most consumers are doing.”
Medicare and Medicaid “do help many, but most of us should realize that we ourselves will most probably have to pay for the long term care services we may need,” Moore said.
Millions of baby boomers are caring for their parents or other relatives, but a declining birth rate means that, when the boomers themselves are older, “many who need care will not have children to fall back on,” said Mathew Greenwald, a Washington-based senior issues analyst.
Source: Washington Bureau -- NU Online News Service, Oct. 23, 2007
Minorities feel mistreated and disrespected by the health care system
A substantial portion of ethnic minority groups view their health care situations differently, and often more negatively, than whites, according to a new study published in Health Affairs.
Racial and ethnic minorities feel that they are treated with disrespect because of their race or English proficiency, and they are less likely than whites to give positive ratings on the quality of the medical care they receive, the study indicates.
The survey of 4,157 randomly selected U.S. adults compared perceptions of health care among 14 racial and ethnic groups to those of whites. The researchers discovered a large amount of diversity among smaller subgroups; therefore, aggregating them may mask some important differences. For example, Cuban Americans are socio-economically closer to non-Hispanic whites than they are to Puerto Ricans or Mexicans. In addition, U.S.-born African Americans have worse health outcomes than African Americans born outside of the United States, the study finds.
U.S.-born African Americans and Native Americans give the health care system significantly lower ratings than whites. Four groups are more likely than whites to give the system higher ratings: Cuban Americans, Filipino Americans, Vietnamese Americans and African Americans born in Africa.
In addition, several racial and ethnic groups feel they receive poor-quality care because of how they speak English and because of an inability to pay.
Further analysis of problems, such as communication and cultural differences and residential segregations, is needed if all the factors underlying disparities are to be fully understood, the researchers concluded.
To address these issues, some employers provide translated benefits information, health coaches and online resources to help workers navigate the health care system.
Source: Employee Benefit News, October 23, 2007
Vulnerable elderly receive poor care
A study performed by researchers at the University of California, Los Angeles, found that vulnerable elderly Americans are receiving less than stellar Medicare and Medicaid health care.
The study, which defines vulnerable elderly as those at risk of death or declining functionality, measured the quality of 43 specific care standards for around 100,000 California elderly residents living in community homes with an average age of 81, according to reports.
Findings indicate that these patients received only 65 percent of recommended diagnostic tests for myriad conditions, including heart disease and diabetes
This number clearly demonstrates a need for improvement, according to the study’s authors. As a case in point, a mere 42 percent of patients diagnosed with diabetes received blood sugar tests or eye exams over the course of the yearlong study, according to findings.
Source: ProWEB Wire (Industry News), October 22, 2007
Innovative medical PPO locks in renewal rate to help control rising medical costs
Despite recent predictions that health benefit costs are headed back up again, brokers and advisers who represent small and midsize clients actually have reason to rejoice.
Groups with 51 to 150 employees can now sign up for a unique and comprehensive two-year medical PPO that locks in a single-digit medical premium renewal rate. As a result, they can avoid the time, stress, hassle and expense of shopping a new plan next year, as well as ensure that their employees enjoy coverage continuity and peace of mind.
The Guardian Life Insurance Company of America designed its Guardian Premium ProtectSM product with this market in mind. The program, which builds in an enhanced employee cost-sharing feature, sets the amount premiums can rise in the second year to 0 ("retained rate"), 6% or 9%. Prescription drug benefit and vision discount also are available in most markets, along with an array of wellness resources.
The plan is now available in the New York and Chicago metropolitan areas, New Jersey, Maryland, Virginia and Washington D.C., for plans sold with effective dates beginning October 1. In addition, Dual Choice plans give employers the flexibility of being able to offer their employees a choice between a high and low cost-sharing plan.
Rate hikes in the forecast
Tim Bireley, Guardian's vice president, group medical, says it removes the guesswork from the health care budgeting process and makes those expenses predictable at a time when they continue to significantly outpace inflation. He adds that "producers can help relieve their client's anxieties about unpredictable and out-of-control health plan renewal rates by offering the rate at the point of sale."
Brokers and advisers that offer this option will look downright heroic considering the market volatility that's likely in store for their clients. A look at expert predictions can leave plan holders not knowing just what to expect:
- The Kaiser Family Foundation found that the 6.1% average health care premium increase in 2007 was the smallest in eight years, research from several leading employee benefit consulting firms suggest a move upward in 2008.
- Hewitt Associates predicted the biggest average increase — 8.7% for next year.
- Towers Perrin is forecasting 7% higher costs based on a survey of 300 large firms, which means the rate hike could be even higher down market.
- Preliminary findings from Mercer's annual survey of roughly 3,000 employers, which is due out by the end of the year, point to a 6.7% rise in health benefit costs in 2008 - a number that could climb to 9% on average if no plan design changes are made. The results included responses from 1,557 employers.
Guardian is able to allay any fears about the uncertainty of rising health care costs beyond 2008 by guaranteeing an increase of 6% or 9% — or none at all — in the second year of a two-year plan. To achieve these guaranteed single digit renewal increases, member cost sharing is higher in the second year. Employee co-payments could increase by up to $15 and deductibles anywhere from $50 to $1,000 for in-network hospital stays, and $500 to $1,000 for out-of-network care.
An investment in people
The effort doesn't end there. Guardian will continue to work closely with brokers and advisers on health care cost containment solutions following the initial two-year period by offering a variety of medical packages to meet clients' unique needs. In effect, the new plan offers small and midsize employers an opportunity to apply any premium savings toward creating a healthier workplace, ultimately boosting morale and making their businesses more productive.
At the end of the day, employers would much rather focus on running their business than researching, evaluating and negotiating a new health care plan every year. Further, health plan members would prefer to avoid having to evaluate and select different doctors in new networks during the length of the contract or become familiar with another carrier's claim and review procedures, or administrative processes.
"This continuity not only eliminates one of the most labor-intensive and stressful tasks that smaller organizations face but also a major source of employee benefit complaints," according to Bireley. "Our solution offers more than just a health plan. It also serves as the cornerstone of an ongoing relationship and commitment to market innovation."
The Guardian Premium Protect SM product coincides with Guardian's 50th anniversary of providing benefits to more than 120,000 employers, as well as 6 million employees and their dependents. The insurer has marked this milestone by issuing a series of educational surveys and reports to help employees, employers and benefit decision makers better understand how they can jumpstart their financial lives, improve recruitment, retention and employee satisfaction by maximizing the use and power of their workplace coverage.
Source: Employee Benefit News, October 27, 2007
Workers not seeing the bigger health care picture
New research indicates that the majority of American workers don’t understand key health insurance terms, which could cause them to make poor plan selections and severely underestimate the cost of health care in retirement.
Although 61% of employees considered their understanding of health insurance terminology to be very good, only 15% of workers actually had a very strong understanding of key terms, according to new research published this week by Fidelity Investments. About 56% did not know what a health savings account is, and 50% could not define a flexible spending account or a health reimbursement account. Another 13% did not know what a copayment is.
When asked to identify the three most important factors in choosing health insurance, 39% of employees cited premiums amounts, followed by copayment amounts and the ability to access specific doctors (tied at 29%) and deductible amounts and prescription drug coverage (tied at 20%).
About 74% of workers who didn’t have access to a consumer-driven health plan expressed no interest in it. The employees who were interested in a CDHP (24%) were less likely to be satisfied with their health plans and more likely to be younger and with a high level of education.
“It’s a bit of a contradiction to hear workers say that premiums are the most important factor in choosing a plan, yet they express little interest in CDHPs,” remarks Patrick Goepel, president of HR services for Fidelity Investments.
To educate workers on health care, Goepel advises employers to communicate early and often using a multi-media approach (an intranet scheme, Webcasts, etc.) and focus groups. Employers should promote healthy food choices and other fitness and wellness activities in the workplace, he adds.
Fidelity’s survey also found that most insured workers (68%) have not tried to calculate their expected health care costs in retirement. When asked to estimate how much a typical couple retiring today at age 65 would need to cover out-of-pocket health care costs in retirement, the median answer given was $100,000, far less than Fidelity’s estimated $215,000.
“The individual has to think about the lifetime of their health choices and the impact far beyond the current year and their careers,” says Goepel. “So often today, they’re looking at the copay or the monthly premiums, and that’s a year-by-year approach. They need to start looking at the bigger picture."
Source: Employee Benefit News, October 18, 2007
Single women gain assertiveness in voicing benefits needs
For Johanna Diaz, having enough time in her schedule to spend with her dog is very important to her.
Diaz is a 31 year-old account executive with PR Solutions, a public relations firm based in Washington, D.C. She's single and lives on her own, with the exception of her pug.
Having a family is not in her immediate future plans.
She is a new homeowner in the trendy Adams Morgan neighborhood of Washington, D.C. and likes to get home at a reasonable hour to make sure the dog isn't doing any damage to her new investment.
So for Diaz, working for an employer that allows for schedule flexibility is important.
"If I'm looking at potential employers, and one offers a flexible work environment where you could bring your dog in sometimes, that would definitely make a difference," she says.
Incidentally, PR Solutions loves it when Diaz brings her dog to company outings.
Unfortunately, the building has stipulations against pets on the grounds, which apparently is the nationwide norm.
According to the Society for Human Resource Management's 2007 Benefits Survey, just 6% of companies allow pets at work.
Outside of being pet-friendly, PR solutions provides a flexible work atmosphere where telecommuting is accepted.
Such flexibility is a blessing to Diaz, who used to work 14-hour shifts on a consistent basis for the State Department - clearly not ideal for the sole caregiver to a dog.
"I think it's important for employers to remember that everybody has lives outside of the office, and that they should try to accommodate as many of them as they can," says Diaz.
"There's still a long way to go toward everyone establishing a good work-life balance, but I think we're moving in the right direction."
Asserting themselves on work-life
Deven McGraw, 43, chief operating officer of the National Partnership for Women & Families, a nonprofit based in Washington, D.C., thinks single women in particular get overlooked sometimes when it comes to work-life benefits.
However, rather than blame the employer, she believes it's up to the employee to assert herself and make sure she's getting the same access to benefits as her colleagues.
"Single women often don't do a good enough job at asserting a need for personal time," comments McGraw.
According to Ellen Galinsky, president of the Families & Work Institute, there has been a lot of discussion about resentment in the workplace between single women and women with families regarding work-life.
"Although we don't have statistics on it, there has been a lot of talk," she says. "But I think the most progressive companies would understand that everyone needs time away from work and that it shouldn't necessarily be given to one group versus the other."
It would benefit employers, therefore, if they heed single women's reasonable requests for schedule flexibility.
"There are a lot of things employers can offer to sweeten the pot for their single women, like gym discounts, financial planning services, eldercare [benefits], schedule flexibility and time off for volunteering," remarks Teresa Hopke, director of work-life strategies at RSM McGladrey, a business and tax consulting firm based in Minneapolis.
Core benefits even more vital
However, it's not only the work-life perks that appeal to single women.
Hopke says that, based on conversations she's had with single women, the most important benefit they value is a 401(k) plan "because they realize they have no one else to fall back on but themselves."
Consistent with most Americans, health care benefits also are of premium importance to single women. "I value health care based largely just on the conversations I hear about how many people are without it nowadays," says Diaz. "I feel lucky to have it."
Other traditional benefits play a large role. Vision benefits are covered for McGraw, and for that she is grateful. According to SHRM, 79% of employers surveyed offered vision insurance to their employees.
"Law school ruined my eyesight," McGraw says. "Eye checkups for glasses are essential, as is dental - keeping my teeth is very important. Women in general tend to use their health benefits because we get annual checkups, and most women go to the doctor once a year."
The National Partnership for Women & Families also provides flexible spending accounts to employees where pretax money can be spent on cold medicine, multivitamins and other health items. As long as employees hold on to their receipts and the expenses are health care-related, the items are covered.
To McGraw, benefits are a vital part of her employment, despite the fact she has no other dependants relying on her.
"There's nothing that's lacking in my benefit package," she says. "By making a choice to work for a nonprofit, like I did, you're forgoing a greater salary than you could have made in the private sector, but there's a reason behind the choice I made. If I were in a different personal situation and needed to take care of someone else, I might make different choices or go somewhere where I have to maximize my income."
Benefits wanted
Lesley Lopez, 23, works for broadcast station EuroVision on a contract basis and doesn't have access to benefits. She's actively searching for an employer that can provide her a good benefits package.
"I've always realized the value of preventative health care," says Lopez, who graduated from the University of California at San Diego in 2005 and moved to Washington, D.C., shortly thereafter. "If I get sick, I want to make sure it's just a cold and not anything more serious, and I can't go to the doctor and do that right now.
"Hopefully my next job will have benefits, especially health care and vision."
When Lopez was in college, her benefits were covered by school insurance and her parent's policy. This is the first time in her life without her own dentist.
Currently working to be successful as an entrepreneur, she plans to shop the individual insurance market for health care coverage, but hopes to find an employer soon that offers comprehensive benefits.
"I definitely have a greater appreciation for benefits now that I have none," Lopez comments.
Source: Employee Benefit News, October 1, 2007
Boomers ask 'how much is enough?' as they near retirement
Darlene Duchene, 48, has always been a saver. The Edgewater resident's frugality has paid off with $500,000 in a 401(k) account she started at age 22 and has $75,000 invested in stocks. After decades of saving, she and her husband Robert were hoping to retire in about 10 years.
But with unexpected medical expenses, outstanding mortgage payments and their 16-year-old daughter Gabrielle's desire to attend Johns Hopkins University, the couple is no longer sure. "That's nothing for what I'm going to need to live," said Mrs. Duchene, a senior-level employee with Verizon. "I'm going to live another 50 years."
And they're not alone.
As the nation's baby boomers move into their 60s and nearly 80 million Americans become eligible for Social Security over the next two decades, Mrs. Duchene and others close to retirement age are suddenly facing questions about how to make money last.
And a single 401(k) retirement account and Social Security benefits won't do the trick. Those headed for retirement must have a strategy to realize their financial goals, but it's something many have neglected to do, said Greg Ostrowski, vice president of investments for The Scarborough Group Inc., a financial planning and portfolio management company in Annapolis.
"It goes back almost to complacency," he said. "When the markets are doing well, people think 'I don't have to do a thing.' They are not thinking in terms of 'do I have a plan in place?'… The vast majority of people out there have never planned the income for their retirement." Poor planning can come back to haunt people who suddenly realize money they've accumulated over time isn't enough.
"There was a time when $1 million seemed like a lot of money," said Scott Iodice, managing partner for Northwestern Mutual Financial Network, which has offices on Admiral Cochrane Drive. "It's no longer as much as you thought."
Mr. Iodice, whose company assists clients with balanced portfolios based on the associated risk, said those who haven't saved enough consider downsizing their homes, moving to areas where the cost of living is lower and working a few more years so their assets can grow. "Every year that you stay working is two years - one year of growth, one year less income taken out," he said.
Mike Steranka, chief executive officer of Retirement Planning Services Inc. in Crofton, added that many people don't realize they are "sitting on lazy assets, assets that are under performing." "A lot of it is just how they are taught," he said. "We are not taught to be financial planners."
John Blamphin, a certified financial planner who works in the Severna Park office of Retirement Strategies of Maryland LLC, said another problem occurs when retirees overestimate the amount of money they can withdraw each year. Take a person who has a portfolio consisting of 80 percent stocks and 20 percent bonds. If they took out 7 percent of the portfolio balance each year for 20 years, "the success rate of not running out of money is only 56 percent," said Mr. Blamphin who calculated these figures based on the Monte Carlo decision method.
Mr. Ostrowski, who helps Mrs. Duchene with her finances, said there are many things people can do to enjoy their golden years. He said those close to retirement age should have a portfolio with at least 40 to 50 percent of their money invested in bonds and cash with the rest invested in domestic and foreign stocks.
"The U.S. isn't the only player anymore," he said. "India, China, you have to have exposure."
Baby boomers must start paying down credit card debt and transferring money out of low-interest bank accounts while taking time to prioritize about what's important to them, he said. Mr. Ostrowski said a number of clients have taken on new jobs so they don't have to take money out of the "nest egg right away."
The Duchenes may not retire as soon as they thought. But with Mr. Duchene's best friend dying last year, the couple wants to live life to the fullest. So they are planning to splurge on a 25-foot Parker powerboat, something Mr. Duchene has been eyeing for a while.
"A lot of our friends are dying and we don't think we're old," Mrs. Duchene said. "It's been a dream of his."
Source: Capital Online, October 25, 2007
Wellness programs increase in popularity
Employers are increasingly encouraging workers to adopt healthier lifestyles, and, considering rising health care costs, its no surprise that a growing number of Americans are embracing wellness programs in the workplace.
The 2007 EBRI Health Confidence Survey finds that 83 percent of Americans say a wellness program would help them develop a healthier lifestyle, 82 percent have a positive view of the programs and 76 percent feel that employers who offer such programs are showing concern for their workers.
Meanwhile, findings indicate that reduced health care costs are a big motivator for participation in wellness programs, as 70 percent of Americans say they would likely participate in an incentive program if it reduced their health insurance premium by 5 percent, and 77 percent if it reduced their premium by 10 percent.
Source: ProWEB Wire (Industry News), October 25, 2007
Report criticizes of US Medicare drug plan costs
U.S. taxpayers and Medicare patients could have saved almost $15 billion in 2007 if private health insurers had cut expenses for prescription drug coverage and negotiated bigger discounts, a report from Democratic staff of a House of Representatives panel said on Monday. The Medicare prescription drug benefits offered by private insurers operate with "high administrative costs, sales expenses and profits," the report said.
Staff for Democrats on the House Oversight and Government Reform Committee, chaired by California Rep. Henry Waxman, based their conclusions on proprietary cost and pricing data obtained from 12 insurers that provide drug coverage to more than 18 million Medicare patients. "Use of private insurers to deliver Medicare drug coverage is driving up costs and producing only limited savings on drug prices," the report said.
Republican staff issued their own report saying Democrats distorted the facts and the program was popular among seniors.
Aetna Inc, UnitedHealth Group, Humana and other companies offer drug plans through Medicare, the federal health coverage for the elderly and disabled.
Karen Ignagni, president of America's Health Insurance Plans, said the drug coverage had cost taxpayers and patients less than originally projected and offered more benefits.
Source: Reuters, October 15, 2007
CIGNA short-term DI programs help workforce
Individuals covered by CIGNA's integrated medical and disability programs who have taken a short-term disability leave are more likely to return to work, according to newly released research by CIGNA.
Findings represent improvement in return-to-work rates for these claimants of at least five percent and up to 37 percent, as compared to their counterparts in non-integrated, disability-only plans, according to CIGNA.
CIGNA has extended the discounts it offers to employers who purchase both medical and disability programs from CIGNA. The discounts include savings on both disability and health care coverage when these programs are purchased together, the company says.
CIGNA's analysis demonstrates that employees with disability claims make up only a small percentage (5 percent) of the total employee population yet represent 37 percent of total employee medical costs.
Meanwhile, 80 percent of employees with disability claims also fall into the top 20 percent of health care spenders. This highlights the need to assist employees with disabilities, or potential disabilities, as a means to contain health care costs, CIGNA says.
Finally, more than 80 percent of employees included in the analysis who were disabled had chronic and/or lifestyle-related conditions, according to findings.
Source: ProWEB Wire (Industry News), October 15, 2007
Exercise Corner: Shape up for ski season
Remember how out of shape you were last ski season? How after a couple runs on your board or sticks your legs were on fire at the bottom of the hill?
Well, don’t let history repeat itself. Some ski resorts open in less than two months, so now is the time to start getting in shape.
Whether you snowboard or ski downhill or cross-country, these pre-season exercises will improve endurance, strengthen the legs and enhance balance:
*Cycling -- This is a great endurance exercise that builds cardiovascular fitness and strengthens the quads, glutes and hamstrings. While the weather is still good, get out your bike and start putting on some miles. At the gym, hit the stationary cycling machines.
*Jumps -- Place a foot-long piece of masking tape on the floor. Then stand on one foot and hop across the tape, back and forth, for 30 seconds. Switch feet and repeat. Finish up with both feet locked together and hop from side to side for 1 minute.
*Skiing, at the gym -- Cardio machines that mimic the moves of cross-country or downhill skiing are great to train on because they move like you do in the snow.
*Isometrics -- For strength and balance, pull up an imaginary chair and sit against the wall. Start by standing with your back to the wall. Then slide down until your knees are in line with your hips. Keep your shoulders back against the wall. Hold for 1 to 3 minutes.
Doing these exercises in addition to your regular workout program will enable you to take longer runs, keeping good form all the while. That means fewer aches and pains the next day – and more winter fun!
Source: The Fit List, October 30, 2007
Recipe Corner: Apple Dumplings
Dough:
2 cups flour
1 Tbs. baking powder dash of salt
3 Tbs. sugar
1/3 cup oil
2/3 cup milk
Filling:
2 cups green apples, peeled and sliced
sugar
cinnamon
egg wash:
1 egg
Syrup:
1 cup water
1/2 cup sugar
2 tablespoons butter
1/2 teaspoon cinnamon
5 hot cinnamon candies (optional)
Mix all dough ingredients together to form a soft dough. Roll out on floured pastry board to a thickness of 1/2 inch. Cut into 5 or 6 inch squares.
In a small bowl lightly coat cut apples with sugar. Place them on top of biscuit dough and sprinkle cinnamon on top.
In a small bowl, beat egg. Using a pastry brush, wet edges with egg and fold it over the apple, pinch and flute them to look well, and encase the apple completely. Brush the tops with egg and sprinkle with sugar.
Place on cookie sheet and bake at 425° for 25 minutes, then reduce heat to 350° for 30 minutes. Pour sauce over each dumpling at serving time.
Syrup directions:
Using all ingredients, bring to a boil on the stove and cook a couple of minutes. Add cinnamon candies and cook just until candy melts over low heat.
Source: Allrecipes.com