Insurance World

What would you do if an illness or injury left you unable to care for yourself? The chances of that happening might be greater than you think.

The U.S. Department of Health and Human Services indicates that people 65 and over face at least a 40 percent risk of entering a nursing home, while the U.S. Government Accountability Office estimates that 40 percent of the 13 million people receiving long-term care services are between 18 and 64.

Despite the risk, a 2005 Kaiser Family Foundation survey shows that only two in 10 (21 percent) adults say they have long-term care insurance. While cost is a common deterrent, LIMRA International, a market research organization, says that people who have never shopped for policies overestimate the cost by as much as five to 10 times.

“Premiums vary due to age, health and policy type, but most middle-income consumers can benefit from a long-term care policy,” said Scott Perry, executive vice president and chief operating officer of Bankers Life and Casualty Company, the 127-year-old insurer that specializes in the mature market. “Like other insurance, the younger and healthier you are when you buy, the less expensive the premiums.”

Planning for long-term care is encouraged while in your early 50s. As you research, remember to:

Determine long-term care costs.

Read about long-term care coverage.

Explore what’s available. Compare several insurers’ policies. Choose a well-established company with solid financials. Long-term care can be challenging and emotional, so you might want help from agents experienced in serving the mature market.

Determine what you can afford. According to the Life and Health Insurance Foundation for Education (LIFE), a good rule of thumb is to spend no more than 7 percent of your gross income on long-term care premiums. Consider spousal discounts and how different elimination periods, daily benefits and maximum benefits affect premium cost.

Involve your children. A 2004 survey sponsored by Bankers Life and Casualty Company found that adult children overestimate their parents’ planning, while older adults think they have the proper policies but are confused as to what they actually cover. Sixty percent of seniors mistakenly believe Medicare will cover long-term care costs. These disconnects can put unexpected financial burdens on both generations.

According to the United States Census Bureau, 87.7 percent of Ohioans had some form of health insurance coverage during 2005, while 12.3 percent were not insured at any time during the year. Additionally, 14 percent of Ohio residents under the age of sixty-five did not have health insurance during 2005.

AFFORDABLE HEALTH INSURANCE OPTIONS IN OHIO

Most Ohioans who have health insurance are covered by either employer based plans or government programs. What options are available for individuals who do not have access to such coverage? Ohio Department of Insurance Director, Ann Womer Benjamin, references the “increasing number of options with Health Savings Accounts. There may be a person, or a family, generally comfortable paying for health care costs, but wants a high deductible policy. Also, for fairly young, fairly healthy individuals, an HSA coupled with a High Deductible Health Plan could really work.”

Health Savings Accounts are not feasible for everyone. Ohio residents who are not interested in HSAs should try to take advantage of alternative plans and programs. “Ohio has an Open Enrollment Program that takes (uninsured individuals) regardless of pre-existing conditions, but is likely costly”, Womer Benjamin explains.

HEALTH CARE COVERAGE LEGISLATION

There are currently two bills in the Ohio Legislature, Senate Bill 272 and House Bill 5 / Senate Bill 5 that are generally supported by the Ohio Department of Insurance as methods of expanding access to health insurance coverage.

Senate Bill 272 would repeal the Open Enrollment Program, as well as the Open Enrollment Reinsurance Program. In its place, the Ohio Health Insurance Risk Pool would be created to provide health care coverage to individuals who are unable to obtain affordable health care coverage in any other manner. This would eliminate the annual periods of open enrollment that sickness and accident insurers, health insurance corporations, and multiple employer welfare arrangements (MEWAs) are currently required to hold. “The Ohio Health Insurance Risk Pool would provide a state fund for those without health insurance coverage. We would support this concept and have various suggestions for funding. We would theoretically be able to reach ten times more individuals than the Open Enrollment Program does currently”, says Womer Benjamin.

House Bill 5 / Senate Bill 5 would permit small employers to offer health care plans that do not provide benefits otherwise required by law. The bill provides for the operation of health savings accounts that are consistent with federal law, and places a limit on an insured’s liability for co-payments and deductibles under a health benefit plan. ODI Director Womer Benjamin asserts that the bill “would provide more options for small businesses, and we are hopeful that that will pass”.
THE MASSACHUSETTS EXAMPLE

On April 4, 2006, Massachusetts House Bill 4850 was overwhelmingly passed by the state legislature. All Massachusetts residents will be required to obtain health insurance coverage by July 1, 2007. The state’s plan dictates that businesses with more than ten employees that do not provide health insurance coverage will be charged a fee of as much as $295 a year for each employee. Government subsidies to private insurance plans will provide affordable health insurance to a greater number of the working poor, and individuals who can afford private health plans will be penalized on their state income taxes if they do not have coverage. Should Ohio consider a similar plan in order to achieve nearly universal health insurance coverage? Ohio Department of Insurance Director Ann Womer Benjamin says that we need to “watch Massachusetts and evaluate the plan’s success and funding”. “Ohio has a larger number of uninsured individuals and is different than Massachusetts, politically.”

Ohioans have a large selection of health insurance carriers and government programs to choose from. Regardless of the provider, it is extremely important for individuals to obtain a health insurance plan. Director Womer Benjamin emphasizes that she is “concerned with people who don’t think they need health insurance coverage”.

About The Ohio Department of Insurance

The Ohio Department of Insurance (ODI) is an informative resource for those seeking information regarding health insurance options in the state. ODI asserts that its mission is to be “responsive to and safeguard consumer interests through education and vigilance while promoting a stable and competitive marketplace among insurance providers”. The Ohio Department of Insurance can help uninsured persons sort through their options, depending on their individual circumstances. For more information, call the ODI Consumer Hotline at 1-800-686-1526.

The Department is headed by Director Ann Womer Benjamin, who was appointed in January of 2003, and is the first woman to hold this position. Prior to this appointment, Womer Benjamin served in the Ohio House of Representatives for eight years.