Here’s How Those Looking To ‘Age In Place’ Can Fund Home Health-Care Services

Home Health Care and Aging in Place | Retirement Living

Source: CNBC, by Deborah Nason

Some 70% of people want to age at home, yet only 10% have long-term care insurance, a recent HCG Secure/Arctos Foundation study found. Furthermore, about half of respondents had no idea how much in-home care would cost.

With the median annual cost of a home health aide nationally estimated at $61,776, how are folks going to fund this?

 

“The need for help at home is much more common than you think, but people don’t plan for it,” said certified financial planner Chris Chenwealth strategist with Insight Financial Strategies in Newton, Massachusetts.

Scoping out the insurance option landscape

People with long-term care insurance will usually have home health care covered under the same eligibility conditions as for long-term care facilities — the inability to perform two of six so-called activities of daily living, Chen said. According to the Administration for Community Living, this situation typically lasts an average of two years.

“Basically, I try to segment the risk into a short-term need and a long-term need, and to fund them separately,” he said. “Where possible, I encourage people to buy LTC insurance for a short period of coverage, maybe a year.”

“Then I encourage them to buy a hybrid life insurance to cover for longer periods,” Chen added. “And I like to plan for some assets to be used to cover the differences.”

Tom Beauregard, founder of insurance company HCG Secure, said there’s “a need for innovation in this space to cover middle-income families to age at home.”

 

“For most people, it’s a blind spot — they [mistakenly] think home care will be covered by their [employee] insurance or Medicare,” he said. “And most of them can’t afford long-term care insurance.”

Beauregard’s firm recently launched Home Care Secure, an indemnity plan that pays cash on a weekly basis, along with access to planning and coordination services such as well-being assessments, an aging-at-home plan, help with finding and scheduling in-home health aides, telehealth visits, etc.

While indemnity plans pay cash benefits, the policies themselves do not retain cash value like plans such as hybrid life insurance.

Creative ways for clients to fund aging in place

With a previous background in the home health-care industry, Taylor Kovar, CFP and CEO of Kovar Wealth Management in Lufkin, Texas, suggests several creative ways for clients to fund aging in place, including:

  • * Offering room and board in exchange for in-home assistance, especially in college towns.
  • * Cost-sharing and splitting hours of caregivers and other helpers with a neighbor or relative. “If neighbors share, then effectively, you’re so close, it’s like you have the [helper] available all day,” Kovar said.
  • * Digging into any corporate retiree benefits beyond just a pension, as there’s often additional services for in-home care, he said.
  • * Researching local nonprofits that can help pay for in-home health care, going through state aging and disability resource centers, and sites such as the U.S. Administration on Aging’s Eldercare Locator.
  • * Looking into benefits that may be available from previous law enforcement or other public service employment.

Scott Vance, CFP, owner of Trisuli Financial Advising in Holly Springs, North Carolina, focuses his practice on military members and veterans. He said the Department of Veterans Affairs offers eligible veterans many means-tested home care services, such as light housekeeping, laundering, meal prep, grocery shopping, transportation appointments and — in severe cases — bathing, toileting, eating, dressing, etc.

In addition, so-called Aid and Attendance benefits provide monthly payments for qualified veterans and survivors.

Vance said he helped secure such benefits for his elderly uncle and found it easy.

“The VA really stepped up,” he said. “It was almost painless to enroll him in services.”

Thinking about these things ahead of time can help you have a calmer and safer life as you age at home, said HCG Secure’s Beauregard.

If you can get a little bit of home health support, your chances of a dramatic catastrophe are lower — like a bad fall [or while trying to keep] meds straight, getting meals together, showering,” he said. “There are all sorts of crisis opportunities.”

Survey Says: Voters Want Federal Government to Extend Telehealth Flexibilities

House panel tees up vote on major telehealth billTelehealth flexibilities introduced during the COVID-19 crisis continue to provide improved access, convenience, and value for patients and consumers. Congress is considering whether to extend these flexibilities or let them expire at the end of the year. According to a recent survey conducted by Morning Consult on behalf of AHIP’s Coverage@Work campaign, voters who receive health coverage through their jobs value telehealth and want the federal government to extend the telehealth flexibilities.

Topline findings include:

  • * A majority of voters with employer-provided coverage (65%) are likely to consider seeing a doctor or being treated via telehealth, including a majority of voters with employer-provided coverage across age, income, and ethnicity groups.
  • * Nearly half (49%) say they are interested in using telehealth because of convenience, followed by 35% saying it saves time they would spend traveling to an appointment.
  • * A majority of voters with employer-provided coverage (82%) think it is important for the federal government to extend the telehealth flexibilities that individuals received during the COVID-19 pandemic, including a bipartisan majority of Democratic voters (95%), independent voters (77%), and Republican voters (70%).

Navigating the Family Glitch Fix: Hurdles for Consumers with Employer-sponsored Coverage

Navigating the Family Glitch Fix: Hurdles for Consumers with  Employer-sponsored Coverage | KFF

Source: Kaiser Family Foundation, by Kaye Pestaina and Karen Pollitz

With the 2023 Marketplace Open Enrollment now underway in all states, many are focused on the roll out of the so-called “family glitch” fix as one of the new changes to watch in this tenth Marketplace Open Enrollment. Some consumers with access to employer-sponsored family coverage with high premiums will for the first time be able to enroll in Marketplace plans with financial assistance (premium tax credits and cost sharing reductions) that might make this coverage more affordable to them than their employer-sponsor coverage. However, navigating Marketplace eligibility and enrollment requirements is complicated even without the new rules on the family glitch. This Issue Brief looks at some of the challenges consumers can expect to face in deciding whether to take advantage of the family glitch fix.

Affordability and Employer Coverage

Eligibility for premium tax credits in the Marketplace is based on a person’s household income and whether they have an offer of “affordable” employer-sponsored coverage (among other factors). However, for family members of working individuals, affordability until now was based solely on the cost of self-only coverage available to the worker; the added premium for family members was not considered. That interpretation, adopted in 2013, is sometimes called the “family glitch.” In 2022, the average annual premium for employer-sponsored family health insurance is $22,463, while the average cost of self-only coverage is $7,911. Under the “family glitch”, if, for example, an employer had paid the entire premium for workers’ self-only coverage but contributed nothing toward the added cost of enrolling family members, the workers’ family members would nonetheless have been considered to have an affordable offer of employer-sponsored coverage, preventing them from getting financial assistance for Marketplace coverage.

Under new federal regulations published this fall, the worker’s required premium contributions for self-only coverage and for family coverage will be compared to the affordability threshold of 9.12% of household income. If the cost of self-only coverage is affordable, but the cost for family coverage is not, the worker will not be eligible for Marketplace financial assistance, but her family members can apply for this assistance. If employers offer a choice of plans, the lowest cost option with an actuarial value of at least 60% (the ACA “minimum value” standard) is used to evaluate affordability. (An actuarial value of 60% means the plan covers 60% of the cost of covered benefits on average for a typical group of enrollees, with the remainder being paid by patients through deductibles, copays, and coinsurance.)

Individuals determined eligible for Marketplace premium tax credits can also apply for cost sharing reductions if they enroll in a Silver plan and generally have a household income between 100 and 250 percent of the poverty level (between $23,030 and $57,575 for a household of three for 2023). Cost sharing reductions will lower a consumer’s out-of-pocket costs such as deductibles, copayments or coinsurance. The amount of the cost sharing reduction is determined on a sliding scale based on income. Those in cost sharing reduction plans will also have a lower annual out-of-pocket limit than the maximum amount allowed under ACA rules ($9,100 individual and $18,200 family for 2023).

KFF estimated that more than 5.1 million people fell in the ACA family glitch. KFF also estimates that 85% of these people (4.4 million) are currently enrolled through employer-sponsored insurance and are likely spending more for coverage than individuals with similar incomes would pay in premiums for subsidized Marketplace coverage. Consumers affected by the family glitch could be spending on average 15.8% of their income on their employer-based coverage according to one study. By contrast, the ACA affordability threshold for employer coverage in 2023 is 9.12% of income—an individual spending more than 9.12% of their income in premium contributions for her employer coverage is considered to have unaffordable coverage and is eligible for Marketplace subsidies.

Implementing the Family Glitch Fix

Now that the final regulation has been changed and the employee contribution toward family coverage is taken into account to determine affordability, what can consumers expect as they consider enrolling in a Marketplace Plan with financial assistance?

Consumers need information from their employer

One stumbling block for some employees will be the need to seek specific information from their employer before they can even evaluate whether it makes sense to enroll their families in Marketplace coverage with financial assistance. There is no requirement for an employer to provide this information to their employees, putting the onus on employees to try to gather it. To assist consumers in collecting some of this information, the federal exchange has updated its “Employer Coverage Tool,” which employees can take to their employer and request them to provide information about coverage eligibility, cost and minimum value. Consumers can use this tool to complete their Marketplace application.

IRS rules generally require employer-plan participants to select their coverage option before the beginning of the plan year. After that, employers are only required to permit mid-year changes following specific qualifying events. This can make it difficult to coordinate Marketplace enrollment with employer coverage disenrollment. For instance, an employer may have a plan year that does not begin in January (a non-calendar year plan), in which case Marketplace open enrollment would not coincide with the employer’s open enrollment. New and existing IRS guidance give employers the choice (whether they have a calendar year or non-calendar year plan)1 to allow the employee or household members to revoke their employer coverage and disenroll mid-year if, due to the family glitch fix, they are newly eligible for Marketplace financial assistance. Employers would need to amend their health plans to allow this disenrollment.

Many employers might not know that they must take action to allow employees to revoke coverage in order to take advantage of the glitch fix for their families. While employers do not have to allow this revocation, in most circumstances it would not adversely affect the employer. Allowing a spouse and a dependent to enroll in subsidized Marketplace coverage, for instance, does not cause an employer to violate the ACA’s employer mandate. Some employers may find cost savings in allowing these family members to disenroll since they are no longer covering these family members.

Consumers have complex choices to evaluate

Even if a consumer can get the information that they need in a timely manner, a more affordable premium for Marketplace coverage is only one item to consider in deciding to enroll:

  • * “Split” families. The glitch fix does not affect the affordability rule for the worker, only for the worker’s household members. If employer coverage is affordable for the employee but not family members, the employee might still stay in her employer coverage, while her dependents enroll in a Marketplace plan. This “split” family scenario means the family will have two plans, with separate (and likely different) deductibles and out-of-pocket limits and different provider networks. Also, an employee could decide to enroll along with her family in Marketplace coverage. However, because the employee would not be eligible for premium tax credits, her share of the family premium would not be subsidized. In addition, if her family would otherwise be eligible for cost sharing reductions, the family members would have to enroll in a separate Silver marketplace plan from the employee under existing cost sharing reduction rules.
  • * Networks and cost sharing.
    • – Differences in plan provider networks. The breadth of provider networks for Marketplace coverage might not be as robust as those in a typical employer plan. Consumers will need to investigate whether they can still see their existing providers in their new Marketplace plan.
    • – Differences in cost-sharing: Those not eligible for cost sharing reductions may also find higher deductibles and out-of-pocket maximums then they had in their employer coverage. For example, the average per-person deductible in job-based plans in 2022 was $1,763, compared to $4,753 under the average Marketplace Silver plan that year.

Considerations going forward

CMS has already ramped up outreach to relevant stakeholders to provide training on the family glitch fix. Time will tell whether more is needed to assure that the family glitch fix is implemented so that affected individuals can access this benefit. Easier ways to access information about employer cost and coverage may be one area to evaluate to alleviate the current complexity. As policymakers evaluate how best to make affordable coverage more accessible in our fragmented health coverage system, implementation of the family glitch is one clear area where trained assistance is clearly important to help consumers.

Last Updated 12/07/2022

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