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LIFE FOUNDATION
Agents Gain Recognition for Life-Changing Work
In its annual awards program, LIFE recognized agents for outstanding service to their clients. Award winners arefeatured in a special advertising section in the current edition of Newsweek.
The following are the 2008 award winners and their stories:
• Michael Tokushige of Hawaii, Principal Life: Jim Winand, a boat captain and firefighter, took out his first life insurance policy before marrying and significantly increased his coverage after the couple had two children. In 2007, Jim died of cancer at 38. Jim's foresight and Tokushige's expert planning ensured that his family did not suffer financially.
• Lynne D. Crittenden CPCU, of Va., State Farm Life: Single mother Lauri Turnes was unable to work due to a disabling accident and had difficultly making ends meet. Lauri sometimes used the accumulated dividends from her whole life policy to pay the bills. She considered cancelling the policy when her budget became extremely tight, but insurance agent Lynne Crittenden convinced her to take out a loan on her policy instead of cancelling it. Turnes was killed in a car accident in 2006. Retaining the life insurance policy means that her daughter Jessi, who lives with her grandparents, would have money to help pay for college or perhaps a down payment on a home when she is older.
• Bob Arensberg CLU, ChFC, LUTCF of Kansas, New York Life: After a disabling accident, Frank Ames was unable to work and had difficulty qualifying for more than a small amount of life insurance. However, his wife qualified for preferred rates and purchased a sizable policy. Weeks later, Laura was diagnosed with a cancerous tumor in her abdomen. With the help of insurance agent Bob Arensberg, she was able to invoke a provision on her policy that allowed for an early payout to a terminally ill policyholder. They used part of the proceeds to buy land and build a home. Laura lived in the home for two years before dying at age 42. Though still unable to work due to his disability, Frank is able to remain in the family home and provide for his two children.
• Kassie Bennett of N.C., CIGNA and Jan Cox, human resources manager for the Spartanburg Regional Healthcare System: Ashley Tew was at the start of her nursing career when she was diagnosed with multiple sclerosis, rendering her unable to work. Forced to take disability leave, Ashley thought her nursing career was over. Short- and long-term disability coverage replaced a portion of Ashley's income to help her make ends meet while she couldn't work. Through its return-to-work program, CIGNA assigned Ashley a vocational counselor to help her get physical therapy and help finding a new job in her field. After six months, Ashley found a new job as a chart auditor at Spartanburg Hospital's heart center.
To be considered for the realLIFEstories Client Service Award, submit an application and essay describing how insurance benefited one of your clients at a time of great financial need. For more information, visit www.lifehappens.org/liam.
IN CALIFORNIA
Sounding the Alarm about the Senate Budget
Health Access California says the Senate’s budget proposal would harm healthcare in California, now and in the future. Anthony Wright, executive director of Health Access California said, ‘The proposal makes permanent changes to the state's budget process in exchange for a temporary tax increase that would leave the state facing significant budget shortfalls in 2011 to 2012, if not sooner, and beyond.”
More than $500 million in healthcare cuts would reduce access to doctors, hospitals, and specialists for more than 6 million Californians with Medi-Cal coverage. He said the most disturbing thing is that permanent changes to the budget process would lock in inadequate funding for health and other vital services, force cuts in the future, and give the governor unilateral power to make even steeper cuts.
The proposal includes all the cuts agreed to by the Budget Conference Committee (AB1781). Those cuts include more onerous reporting requirement for children's coverage through Medi-Cal and an increase in Healthy Families premiums, among other reductions. As a result, more than 250,000 children would be denied coverage over the next three years.
The Senate budget proposal includes a delay in restoring the Medi-Cal provider rates until March of 2009. The legislature and governor made 10% cuts to provider rates earlier this year, but proposed to restore them. This would add hundreds of millions of dollars in cuts to California's healthcare providers by delaying that restoration. (This is assuming that the State is successful in its appeal of a court decision that struck down the cut.)
The budget relies on a temporary 1 cent sales tax, which will expire in three years. The reserve, which functions as a spending cap, would drain money from healthcare, education, and other vital services, locking in inadequate funding levels, he said. California is 51st in the nation in per-patient Medicaid spending. For more information, e-mail awright@health-access.org, call 916-442-2308, or visit http://www.health-access.org.
California Law to Compel Insurers to Cover Routine HIV Tests
The California legislature passed legislation that will require health insurers in California to cover routine HIV screening. Assembly Bill 1894, the first bill of its kind in the nation, and awaits the Governor’s signature to become law.
Healthcare Casualty of the Day Series
The California Nurses Association is profiling patients who have seen their healthcare denied or delayed by insurance corporations. The “Health Insurance Casualty of the Day” series will run through the November 4 election. For more information, visit www.GuaranteedHealthcare.org.
FINANCIAL PLANNING
Good News: 65 Isn’t Old Anymore
Increased longevity is changing the perception of what it means to be old. Also, many people are reevaluating their retirement plans, according to a study commissioned by Charles Schwab & Co. Inc. There is an overwhelming consensus among people of all ages that old age doesn’t start until 75 or older. However, most Americans still think people should start getting Social Security benefits between ages 63 and 65, with Generation Y respondents believing the benefits should begin as early as 61.
This new perception of old age is underscored by a shift toward a more active retirement. Seventy-one percent of study respondents plan to work while in retirement and another 60% want to take up a new career. Only 7% of study respondents view this period as a time to unwind. For more information, visit www.rethinkingretirement.schwab.com.
Parents Cut Back Education Contributions
A tough economy means that 36% of parents are saving less for their children’s education or have stopped saving for it altogether, according to a study commissioned by TD AMERITRADE Holding Corp. However, 87% agree that it’s very important to have an education savings plan. Sixty percent of parents expect that it will take 11 or more years to save enough to cover their children’s college education costs. Most are financing or plan to finance their children’s education using the following means:
• 60% Savings accounts
• 54% Cash – pay as you go
• 48% Student loans
• 39% Investments, such as IRAs or bonds
• 13% Home equity lines of credit
• 10% credit cards
• 5% Other sources
Seventy percent say they are not willing to pay more for an education investment advisor and that fees and expenses make a difference in comparing plans. For more information, visit www.amtd.com.
HEALTHCARE
Number of Consumer-Driven Plans Continues To Grow
The number of consumer driven health plans (CDHPs) increased 43% from last year and now comprises nearly 13% of all plans that employers offer. The number of employees enrolled in these plans has gone from 6% in 2007 to 11% this year, according to a survey by United Benefit Advisors.
PPOs dominate the market, representing 54% of plans offered by employers. HMO participation continues to slip, representing just 21% of plans offered. Only 13% of employees are enrolled in HMOs. The HMOs are losing ground as employers try to contain healthcare costs. Fee-for-service plans and exclusive provider organizations have virtually disappeared.
While average premiums increased 7.4% for all plans, first-year CDHP premiums decreased by 7.9%. In 2008, the average employer contribution to an HRA was $1,209 for a single employee and $2,274 for a family. The average employer contribution to an HSA was $642 ($1,021 if employer contributions are eliminated) for a single and $1,053 for family coverage.
Nearly 10% of employers offer wellness programs in 2008 compared to 7.4% in 2007. The average annual health plan cost per employee is $7,327 for medical coverage only, with employees paying $3,210 and employers paying the remaining $4,117. Average monthly premiums for all plans were $370 for single coverage and $901 for a family. For more information, visit www.unitedbenefitadvisors.com.
Transparency Tools Are Limited
The transparency tools that health plans are offering have their limitations when it comes to comparing the price and quality of hospitals and physician services. The study by the Center for Studying Health System Change (HSC) reveals that health plans generally provide some price information on inpatient and outpatient procedures and services. But, few health plans provide price information for physician services. When they do, they generally provide the average cost of physician office visits in a particular geographic area, sometimes by city or zip code and these costs are not specific to particular physicians.
In addition, health plans generally rely on third-party sources to package publicly available information instead of using information from their own claims. Few plans provide customized price information to reflect an enrollee’s benefits. Only Humana reported having website capability to allow price information to be customized based on an enrollee’s deductible, copayments, and out-of-pocket maximum.
HSC Health Researcher Ann Tynan, MPH said, “None of the health plans we interviewed believe that price and quality information is being used extensively by their enrollees, in part, because few have incentives in their benefit structures to encourage cost comparisons.”
Plan executives worry that enrollees may interpret high price as an indicator of high quality and will shift to higher-cost providers, thus raising costs, but not necessarily improving quality. For more information, visit www.hschange.org.
NEW PRODUCTS
Travel Healthcare Resources
HTH Worldwide is offering subscriptions to a website that gives travelers information on physicians, clinics, hospitals, and pharmacies overseas. It also provides other services, such as medication translation. For more information, visit www.hthworldwide.com.
Long-Term Care Insurance Training
Sandi Kruise Insurance Training introduced a reduced cost of $95 for Long-term Care and Partnership insurance training. For more information, visit www.kruise.com or call 800-517-7500.
Fiduciary Training
Fiduciary360 upgraded its online training program for the Accredited Investment Fiduciary designation. It includes expanded content, a much greater opportunity for interactivity, and more rigorous testing. For more information, visit www.fi360.com.
Healthcare Cost Index
The Healthcare Consumerism Index analyzes a company’s medical claims to identify the highest and lowest prices that employees pay for healthcare services and products. For example, the index could tell an employee how much they can save by purchasing the same prescription at a different pharmacy. For more information, visit www.changehealthcare.com.
Chartitable Planning
Sun Life Financial launched a program to educate advisors and clients about charitable opportunities in estate planning. The program details strategies to achieve tax deferrals and savings by establishing charitable trusts and foundations and providing lifetime benefits to charities and causes. The program also outlines the following strategies:
• Understanding the charitable market.
• Leveraging charitable trusts in estate planning.
• Creating opportunities with charitable gift annuities.
• Using life insurance in charitable planning.
• Explaining charitable non-qualified deferred compensation.
For more information, call 800-432-1102, ext. 1846 or visit www.sunlife-usa.com.
Small Business Vision Care
VSP is offering eyecare benefits to companies with two to nine employees. VSP is also offering Hispanic-specific research, Spanish language materials, and educational pieces central to the Latino community. The Hispanic offering is available to brokers in most southern California counties including Kern, Orange, Los Angeles, Riverside, San Bernardino and Ventura, with plans to launch nationwide in 2009. For more information, visit www.vsp.com or call 800-216-6248.
LONG TERM CARE
AHIP Educates Consumers About Long Term Care
America’s Health Insurance Plans (AHIP) launched a national education campaign to inform consumers about their risks of needing long-term care and the financial value of long-term care insurance. The website, www.MyLifeMyFamily.com, provides basic information about long-term care insurance. It offers videos that feature real-life stories from current policyholders, an interactive online quiz, and additional resources.
