The Long Term Care Commission Deadline of September 12 is Rapidly Approaching
Life Care Funding CEO, Chris Orestis joins panel of experts and submits formal Medicaid Life Settlement policy paper to The Congressional Commission on Long-Term Care
The Congressional Long-Term Care Commission will submit final recommendations to the President of the United States and the Congress on September 12th, 2013. Chris Orestis, CEO of Life Care Funding was one of the national experts on Senior Care and Finance to submit a written policy recommendation to the Long Term Care Commission. As part of the official Congressional Record, Life Care Funding’s recommendation lays out for the LTC Commission that life insurance policy owners have the legal right in every state to convert their death benefit through a life settlement into a living benefit that can be used to pay for long term care. Unfortunately too few policy owners understand their rights and will abandon a policy without realizing they have alternative options to use the policy while they are alive. Life Care Funding has been a tireless advocate for Senior Care rights and has developed legislative proposals and delivered legislative testimony before numerous state legislatures, published policy papers and articles, given speeches and seminars across the country, and has been interviewed by the media including the Wall Street Journal, CBS News, Fox News, PBS, Bloomberg, Kiplinger’s and numerous other news and media outlets about consumer rights to use life insurance policies to pay for long term care.
On January 2, 2013 the American Taxpayer Relief Act was signed into law. As part of the law, a 15 member bi-partisan Commission was established to, “…develop a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports for individuals in need of such services and supports, including elderly individuals, individuals with substantial cognitive or functional limitations, other individuals who require assistance to perform activities of daily living, and individuals desiring to plan for future long-term care needs.”
The Long Term Care Commission’s Task
The Long Term Care Commission was given a herculean task and an incredibly short time frame of 6 months to complete its work. As is part of its charge, the Commission must deliver to the Congress by September 12, “a comprehensive and detailed report based on the long-term care plan… [described above]… that contains any recommendations or proposals for legislative or administrative action as the Commission deems appropriate, including proposed legislative language to carry out the recommendations or proposals.”
The Long Term Care Commission is comprised of a panel of experts hand selected by Congressional leadership and the President of the United States. They have held four hearings and accepted policy papers from a cross section of experts in long term care including Life Care Funding CEO, Chris Orestis. In a recent interview, Chris Orestis was asked to predict what the essence of the Congressional Commission on Long Term Care’s recommendations might entail.
“Based on the hearings held so far here are the three key points that will be central in the Commission’s final report”:
- The aging population and longer life expectancies is putting too much pressure on Medicare and Medicaid to sustain. Alternatives forms of funding long term care must be found and/or serious cuts and higher barriers to entry will be necessary.
- Long Term Care insurance has not lived up to expectations. Major companies have quit the market and remaining companies are raising rates and cutting benefits. It is at this point at best a niche market that primarily serves higher net worth individuals who would probably not go onto Medicaid anyway.
- A need for new innovations in the marketplace is essential, and private market solutions to find cost savings and new methods to fund long term care must be sought out and encouraged.
In response to the Long Term Care Commission’s mission and call for the private market to step forward with innovative approaches to help seniors pay for long term care and help tax payers save money, Life Care Funding submitted this recommendation which is currently under consideration by the Congressional Commission on Long Term Care:
Orestis Submits Formal Policy Paper to The Congressional Commission on Long Term Care
Policy Recommendation: The Congresssional Commission on Long-Term Care
Title: Private Market Conversions of Life Insurance Policies into Medicaid Life Settlement Funded Long Term Care Benefit Plans
Author: Chris Orestis, CEO of Life Care Funding LLC
Date: August 25, 013
According to the most recent National Association of Insurance Commissioners (NAIC) Annual Report, there is almost $28 trillion of in-force life insurance policies in the United States. Billions of dollars’ worth of these policies will be abandoned annually by seniors who are navigating a Medicaid spend-down path. Life insurance is a dis-qualifying asset for Medicaid eligibility, and according to a 2007 GAO study 38% of Medicaid applicants they analyzed owned a policy inside the look back period that had to be properly dispositioned (i.e. lapsed or surrendered) to qualify. State regulatory bodies such as the National Council of Insurance Legislators (NCOIL) have passed model disclosure laws to mandate policy owners are made aware of their legal right to convert the use of a life insurance policy death benefit (GRIGSBYv. RUSSELL, 222 U.S. 149 (1911) into a living benefit that can be used to pay for any form of Senior Care service.
In January 2013, Florida State University Center for Economic Forecasting and Analysis released a study analyzing the cost savings of policy conversions to pay for Long Term Care “scored” at $150 million annually. Florida State University Center for Economic Forecasting and Analysis, Scoring Medicaid Savings of HB 1055: Conversion of Life Insurance Policies to Long Term Care Benefit Plans in Florida, published January, 2012
Subsequently, the Florida Agency for Health Care Administration (AHCA) released legislative report and bill language to the Florida Legislature recommending use of life insurance policies to defray costs of Medicaid. Following Florida’s introduction of legislation, By June 2103, eight states had introduced “Medicaid Life Settlement” legislation to educate policy owners about this option to remain private pay and to codify the Long Term Care Benefit Plan structure that would protect the funds from the Medicaid Life Settlement and ensure that it would only be used to pay for long term care services: California, Florida, Kentucky, Louisiana, Maine, New Jersey, New York and Texas. Texas is the first to enact the legislation into law.
It is our recommendation that the Long Term Care Commission look at the legislation that has been introduced around the country and passed into law in Texas (see attached legislative language enacted June 20, 2013) as a national model that would provide seniors more choice and financial control of their long term care scenarios; more private pay funds in the long term healthcare system; and saving to tax payers by delaying or negating the need for seniors to enter Medicaid.
Want to learn more about the Long Term Care Commission? Click the link to visit their website.
Long Tern Care Benefit Plan
A Long Term Care Benefit Plan is the conversion of an in-force life insurance policy into a pre-funded, irrevocable Benefit Account that is professionally administered with payments made monthly on behalf of the individual receiving care. Also known as a Life Care Benefit, this option extends the time a person would remain private pay and delays their entry onto Medicaid. The Benefit is not long term care insurance or a policy loan of any type. It is a unique financial option for seniors because all health conditions are accepted, and there are no wait periods, no care limitations, no costs to apply, no requirement to be terminally ill, and there are no premium payments. Policy owners use their legal right to convert an in-force life insurance policy to enroll in the benefit plan, and are able to immediately direct payments to cover their senior housing and long term care costs.
About Life Care Funding
Founded in 2007, Life Care Funding (LCF) assists people in need of funds to cover the costs of senior housing and long term care. LCF specializes in converting the death benefit of an in-force life insurance policy into a Long Term Care Benefit Plan to cover the costs of skilled nursing home care, assisted living, home health care, and hospice. LCF is the originator and market leader of this innovative approach to funding Senior Living and Long Term Care. LCF works with thousands of assisted living, nursing home and home health providers across the United States to help families convert their life insurance policy into a Long Term Care Benefit Plan.