GenWorth Announces Launch of Ohio Partnership Qualified Long Term Care Insurance

Genworth Financial announced its long term care division has launched the newest addition to its portfolio of long term care planning solutions in Ohio -- Partnership Qualified Long Term Care Insurance (Partnership plans). These products, designed to augment individuals' financial security options during retirement, are the result of an alliance between states and insurers to help millions of Americans better prepare for potential long term care needs. What's more, there are no added costs for residents to participate.


"Many Americans mistakenly believe that Medicare or private health insurance will pay for their long term care needs, and that's just not true," stated Beth Ludden, Genworth's senior vice president for long term care insurance product development. "Those purchasing a Partnership plan can be assured that if and when the need for long term care arises, they will have more control over their long term care decisions, and be able to help protect their assets and resources should they ever need to access Medicaid."


Partnership plans provide dollar-for-dollar asset protection for policyholders. For every benefit dollar policyholders receive under a Partnership policy, they receive an equal dollar of asset protection under the state's Medicaid spend-down requirements. As a result, participants are able to retain assets that would otherwise have to be spent down prior to qualifying for Medicaid benefits.


Long term care is an ever-increasing challenge for millions of Americans and their families. According to the U.S. Department of Health and Human Services (HHS) 70 percent of Americans who reach their 65th birthday will have to pay for some kind of long term care services. With the average cost of care for a private nursing home room topping more than $76,460 nationally and rising for the fifth consecutive year according to Genworth's 2008 Cost of Care Survey, Ohio residents are encouraged to plan ahead for long term care events.


Ludden continued, "Genworth applauds the leadership in Ohio for empowering its residents and is proud to have played a significant role in this endeavor. We continue to work closely with state and federal regulators as well as key industry trade groups to further expand Partnership programs across the nation."

Additionally, Ohio has launched an "Own Your Future" long term care awareness and planning campaign in conjunction with the U.S. Department of Health and Human Services. Its primary goal is to educate the public about the need for long term care planning as part of their overall retirement strategy, encouraging them to begin planning for future long term care needs at an early age. As part of its program, the state offers free, in-home long-term care consultation.


Consumers interested in getting additional information about long term care planning can click here.
+

Uncovering the Many Secrets of College Financial Aid

The financial aid process is a mystery to most. If you are beginning the process of learning about financial aid, you should first consider the promises and risks in paying for financial aid advice, because you will no doubt be tempted (and solicited) by offers to “cut through the red tape” and “better guarantee your child’s chances for financial aid.” Before proceeding the route of a paid financial aid processor or locator, please review the article entitled, “Promises, Promises” publishes by the Wall Street Journal, which can be found by clicking here.

So, in order to evaluate your options, you will need to have an understanding of the process. The process begins with the Free Application for Federal Student Aid, administered by an office at the U.S. Department of Education.

You must file this form to apply for federal student aid, such as grants and loans, as well as most state and college aid. Everyone, from colleges to the government, recommends that parents get a jump on this task as soon as possible. Schools typically award aid on a rolling basis -- first come, first served.

Even if you don't think your family will qualify for need-based aid, it's worth your time to fill out the form. It may enable you to get federal loans at better rates than you could find in the private market. Besides, your student may qualify for certain grants or scholarships.

Ohio Protects Seniors from Stranger-Originated Life Insurance

The Ohio legislature has given final approval to a landmark bill that will help assure the integrity of the life insurance market and protect seniors from a growing abuse called stranger-originated life insurance (STOLI).

In a STOLI transaction, investors such as hedge funds finance a program that induces senior citizens to obtain insurance for the sole purpose of transferring the death benefits to the investors. The investors hope to profit when the seniors die, and the sooner they die, the higher the profit. Seniors caught up in these schemes can face unexpected taxes, loss of insurance capacity, loss of privacy, potential legal liability and may even render themselves ineligible to participate in government entitlement programs.

The legislation, H.B. 404, targets STOLI by reducing the economic incentive for abusive transactions and giving life insurance companies better tools to detect and deter STOLI deals before they occur.

More Retirees Retain Mortgage Debt

Mortgages Carried Later In Life a Disturbing Trend

By Tim Grant, Pittsburgh Post-Gazette

Owning a home free and clear has been an enduring part of the American dream, but in recent years more people are waking to the reality that they will be retiring still owing money on their mortgages.

“It's a bad trend,” said P.J. DiNuzzo, president of DiNuzzo Investment Advisors in Beaver. “One piece of advice I can give is to pay off your house and then retire.”

Rather than cutting back on debt, people approaching retirement appear to be increasing the amount of debt backed by their primary residence, a complete shift from what retirees in past generations did. The number of families headed by people 55 or older with housing debt has increased steadily from 24 percent in 1992 to 36 percent in 2004, according to the Employee Benefit Research Institute in Washington, D.C.

Income Annuities for Retirement Financial Security

Wharton Study Suggests Lifetime Income Annuities Best Asset Class for Retirement Financial Security

Reprinted from Businesswire.com. August 08, 2007 09:49 Dueling Asset Classes: Wharton Study Demonstrates That Lifetime Income Annuities Are Best Asset Class for Financial Security in Retirement

NEW YORK--(BUSINESS WIRE)--As Americans grapple with the challenge of potentially outliving their retirement savings, a new study, co-sponsored by the Wharton Financial Institutions Center at the University of Pennsylvania and New York Life Insurance Company, identifies lifetime income annuities as the most cost-effective and least risky asset class for generating guaranteed retirement income for life.

The Wharton academic study revealed that:

•Income annuities can provide secure income for one’s entire lifetime for 25-40% less money than it would cost an individual to provide a similar level of secure lifetime income through traditional means, thanks to an insurer’s ability to spread risk across large numbers of people;

Bailing out of Unwanted Annuities

Rising Market in Purchase of Long Term Annuities

A fast-rising secondary market for people looking to cash in annuities for a lump sum settlement is causing consumers concern. Is this the perfect escape hatch for people locked into an annuity they don't want or yet another way for brokers to take advantage of seniors in dire financial straits? Of course, as with all financial tools, there is the possibility for both in each situation.

With an annuity, the buyer pays an insurance company a sum in return for regular payouts over a defined period. With more and more people owning or inheriting annuities, you can bet more and more people find themselves in a situation where they want out. Most annuities charge "surrender" penalties of up to 20% if the owner wants to withdraw the principal before a set period has expired. The penalty generally decreases with time.

Ohio Expands Medicaid Resource Recovery

When the Medicaid estate recovery program was instituted in Ohio in 1995, only the assets in a deceased person's probate estate were subject to recovery. Ohio adopted an "augmented estate" approach to recouping Medicaid expenditures effective July 1, 2005. This approach expands the class of assets available for Medicaid estate recovery.

The law, codified in Ohio Revised Code 5162.21, applies to Ohio Medicaid recipients who died on or after September 20, 2005. For those individuals, the so-called "augmented estate" includes all real and personal property in the probate estate; any real or personal property that would have been part of the decedent's probate estate but for release of administration procedures; AND any other real or personal property in which the deceased had an interest or to which they had legal title immediately prior to death (to the extent of such interest).

The new law changed dramatically the way Ohio property law works.  Prior to the law, title of property sometimes vests automatically at the time of death to a beneficiary or heir.  Generally, once title vests in the ownership of another, the debts and liabilities of the former owner are not enforceable against the property, and the new owner can be assured that the title is free, clear, and unencumbered. The new law provides that title vesting to another is irrelevant, at least when the State of Ohio is the creditor; Ohio may pursue its claims against property after the death of the Medicaid recipient even if Ohio filed no lien, claim, mortgage, or encumbrance prior to the recipient's death.   

Consider the following example: John Smith, Medicaid recipient, owns a home, an annuity, a bank account jointly with his daughter, and a living trust that holds various investments. This example is only to show how estate recovery works with different assets, and is not a realistic depiction of a Medicaid recipient; most Medicaid recipients have no assets. Smith transfers an interest in the home to his adult daughter, and they become joint tenants with right of survivorship. Prior to the establishment of the augmented estate, the home and the joint bank account would have passed automatically to Smith's daughter on his death, and would never have been part of the probate estate. Therefore, they would not have been subject to estate recovery. 

The assets in the living trust don't "transfer", per se, but they are not administered through probate. Smith's successor trustee would distribute the trust assets to the named beneficiaries in the trust, free from resource recovery.  Similarly the annuity pays beneficiaries, outside of probate, free from resource recovery. 

Under the new law, because Smith had a legal interest in all of those assets in the moment before his death, all of the assets are included in his augmented estate for the purposes of Medicaid estate recovery, and are recoverable by the State of Ohio.

Prior to the new law, individuals could preserve assets for  their family simply by removing them from their probate estate. Under the new law, preserving assets is harder. 

The state can only attempt to recover against the estate of a Medicaid recipient after the death of their surviving spouse (if married), and when the Medicaid recipient no longer has any surviving children who are either under the age of 21 or are blind or totally disabled. (Total disability is defined by Medicaid regulations.) However, if you do not have a surviving spouse or children with qualifying disabilities, your adult children or other heirs might find assets they expected to receive claimed instead by Medicaid estate recovery.

If you are concerned about preserving assets for your family in the event that you need Medicaid assistance at some point in your life, you will need to plan to keep assets out of your augmented estate. Certain transfers are permissible to keep assets out of an augmented estate, as are other estate planning tools like supplemental needs trusts for disabled or special needs beneficiaries, and certain irrevocable trusts.  An elderlaw lawyer can help map out strategies to meet your goals and needs.  

The Legal Responsibility of Adult Children to Care for Indigent Parents

A conservative policy group has released an issue brief proposing that states begin enforcing filial responsibility laws in order to reduce long-term care costs. Thirty states, including Ohio, have filial responsibility laws that require adult children to care for their indigent parents. The National Center for Policy Analysis (NCPA) claims that if these statutes are enforced, adult children would have to reimburse the state programs that provided care for their indigent parents.

Filial responsibility laws have traditionally not been enforced, possibly because federal law prohibits state Medicaid programs from looking at the finances of anyone other than the applicant or the applicant's spouse for eligibility purposes.  There is, however, no such restriction in resource recovery, the statutory right of a state to recover assets after the death of a Medicaid beneficiary.

The NCPA, a group whose goal is to develop and promote private alternatives to government regulation and control, cites a 1983 report by the Health Care Financing Administration that says enforcing these statutes would have reduced Medicaid long-term care spending by $25 million, and argues that today the figure would be much higher.

Of course, the implications of enforcement of filial responsibility for seniors and their families are complex, but deserve some consideration in day-to-day estate planning.  One can easily imagine a future in which the states routinely sue children in order to recover amounts paid for their parent's long-term care, with children then being forced to apportion these costs among themselves, sometimes through legal action between and among them.  Whether these collections will and must involve the probate court, and whether avoiding probate in the first instance will discourage or prevent these actions remains to be seen.  Regardless, asset protection planning finds one more threat among those justifying and supporting such planning.  

To read the full brief, click here.

Higher Intensity Physical Therapy Improves Outcomes, Reduces SNF Stay Lengths

McKnight's recently reported the results of a study finding that physical therapy of a higher intensity results in better patient outcomes and shorter lengths of stay for some nursing home patients.

According to the article:

Researchers found that for all three types of conditions studied, residents provided with 1 to 1.5 hours of therapy a day had shorter lengths of stay than residents getting less than 1 hour per day over a seven-day period. Researchers studied nearly 5,000 patients with strokes, orthopedic and cardiovascular/pulmonary conditions in 70 different skilled-nursing facilities nationwide.  The study helps establish the minimal therapy required for optimal results at 1.75 hours per day for a 5-day model and 1.5 hours of therapy for a six-day therapy model, said the study's authors.

The findings offer caregivers and skilled-nursing providers guidelines on therapy utilization to improved patient outcomes in functional independence and reduced lengths of stay, the authors say, writing in the March issue of Archives of Physical Medicine and Rehabilitation.

Patients receiving therapy account for more than seventy percent ( 70% of total skilled costs, according to the report.

Account Management Complicated By New Banking Rules

Every Account Holder Should Be Aware of Changes

Americans write about 40 billion paper checks each year. In addition, for the first time that number recently was eclipsed by the annual number of automated transactions involving checking accounts. Checking account transactions are such a widespread part of our lives that consumers of banking services are well advised to become acquainted with major changes affecting banking laws. Federal legislation called the Check Clearing for the 21st Century Act, or "Check 21" for short, went into effect on October 28, 2004.

Check 21 will allow financial institutions to process "substitute" checks--high-quality paper reproductions created from electronic images of both sides of an original check. In time, check processing will be faster, and this is where there will be ramifications for check writers and depositors.

While it has always been prudent to have enough money in your account to cover a check the moment you write it, who has not used the lag time in check processing to make a necessary deposit? That will soon become a riskier strategy as electronic check processing becomes more prevalent. It will also be more important than ever to keep checkbooks up to date, especially bearing in mind deductions for ATM withdrawals, bank fees, and debit-card purchases.

The risk is merely financial if you unintentionally "bounce" a check from time to time. But, if you have come to rely upon the float, and particularly if you use the float from two different accounts, you may find your problem is criminal in nature. The increased speed with which banks process checks may mean more charges of check "kiting." Check kiting is among the most common, and most dangerous, forms of check fraud foisted upon financial institutions. A kite is a form of shell game using at least two accounts at separate financial institutions. The common practice of allowing depositors to have immediate use of uncollected funds facilitates the scheme. Indeed, Regulation CC mandates early access to deposited funds. In the typical scheme, an NSF check is written by on one account and then deposited into an account at another institution. A check drawn on the second account is then used to cover the resulting overdraft on the first account. Taking advantage of the float caused by normal delays in the collection system, the wrongdoer creates fictional balances in each account and uses these balances to obtain cash advances.