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February 16, 2004
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The H.R. Doctor Is In

Long Term Caring

ImagePeriodically the HR Doctor opens a professional fortune cookie and finds messages predicting things to come. Like the Chinese restaurant counterpart, these messages are sometimes so general that you can read into them anything you wish to see. This time the HR fortune cookie was very clear. It said "Get in line early to buy long-term care insurance!"

Most people reading this article have a life span averaging more than 76 years. Advances in science, and in medicine in particular, are adding to that life span by about two years per decade. When HR Director George Washington was gainfully employed, the life span was about 45. In other words, during the life of the American Republic, we have added an entire generation’s worth to the lifespan!

It’s not surprising then that of all the benefits an employer can offer, increasingly, the most valuable for many people will end up being long-term care. We may not like to think about it, but those first years of life in which we relied on parents, or perhaps a single parent, to wipe the drool from our mouthes, change our diapers, move us from place to place and keep us safe, will be repeated later in our lives for even more years.

It is likely that a child born today will spend more time taking care of the parents than the parents spend taking care of the child.

For county governments in particular, this is going to become as serious an issue as any we face. This past decade, we have been in a "bed race" to determine if we could build jail beds faster than the number of people who check in at the Hotel California County Jail. The HR Doctor predicts that the next bed race will be to determine how many long-term care beds can be built at local government-financed care centers.

The HR Doctor had the honor to serve as vice president for human resources for the University of Miami/Miami-Dade County Public Health Trust, one of America’s largest public hospitals. In addition to more than 1,500 beds of traditional hospital care, the Public Health Trust operated about 300 long-term care beds.

No matter how compassionate the staff, no matter how caring top administrators like wonderful Sylviane Ward might be, the result is if you don’t make plans to keep some elements of your future within your own control, you may find that the years of drool being wiped from your chin, diapers being changed, mobility help, and safekeeping for you personally will be in the hands of strangers. For a nation of people who put independence on a museum pedestal as the cornerstone of our entire society, this is a particularly sad prospect.

In the HR Doctor’s frequent visits to the long-term care facilities at Jackson Memorial Hospital in Miami-Dade County, a particularly striking and frightening revelation was apparent. While the average age in a nursing home in the United States is about 80 years, at Jackson the average was about 45 years. Young people were there who will be spending decades receiving long-term care at local government expense because they were momentarily stupid enough not to wear seat belts while driving, or a helmet while riding a motorcycle. It immediately made the HR Doctor realize that the real people suffering from very serious brain dysfunction were very likely the members of state legislatures who voted to repeal helmet laws under lobbyists’ pressure. Let them visit Jackson and then decide if they voted wisely!

So what can you do as an individual and as a public official?

The first thing is to be a personal role model for protection against the long-term care need. Besides the obvious (i.e., always wear your seat belt or a motorcycle helmet) begin exploring how to implement a long-term care benefit for local government employees. The agency doesn’t have to pay for it. The benefit could be paid by individual employees. In the future, it will be something we can pay for with pre-tax dollars.

The HR Doctor offers some basics to think about as you explore the rather confusing world of long-term care:

1. Make the benefit available on a group rather than on an individual basis. Group rates will be significantly lower and the often extraordinarily high commission rates found in individual policies will be much lower as well. Many individual policies may have commission rates equal to 60 percent or more of the premium paid. That could turn into 15 percent or thereabout in a group policy.

2. Insist on guaranteed issue for employees. That means employees signing up during open enrollment or when they first become employed will be eligible for the benefits regardless of their existing, or pre-existing conditions.

3. Some policies will allow the relatives of employees, such as parents, children, or siblings to join the plan, although not on a guaranteed issue basis. Insist on that feature.

4. Ask a lot of questions including who will make the decision that I am eligible for the benefit. Usually eligibility is determined by the loss of two or more activities of daily living (ADLs). Such basic activities include feeding, continence, mobility and bathing. Look for a policy which makes you eligible with the loss of two ADLs, rather than three or more. Look for a policy where the judgment about ADL loss is made by your own physician, not the company itself.

5. Look for a policy that would allow benefits to be paid in cash directly to the employee rather than being paid to an institution, such as a nursing home.

6. The most frequent caregivers, especially in the future, may well be family members, neighbors, or friends. Look for a policy that will pay benefits for home health care by EITHER licensed professionals or non-licensed caregivers, chosen by the employee.

7. Explore whether the employer could pay for the cost of a very basic minimum level of coverage. Often when an employer is willing to pay for a minimum policy for a group, the rates for the entire group, and for subsequent enhancements to basic coverage paid by the employee, will be significantly cheaper.

8. The insurance world is changing just as fast as the world of high technology, the entertainment industry and agriculture. That is, we are seeing the conglomerate giant corporate takeovers of what were once smaller, more independent organizations. Look for a company with a long history of financial strength and stability. In other words, look for a company which, itself, is unlikely to go on life support or be pronounced clinically or financially dead before you are.

9. A waiting period or elimination period is common. This is the time after becoming eligible when benefits are not yet going to start. Limit such a waiting period to 90 days or less.

10. Finally, look for a company that explains its product in very clear language, written more from the standpoint of the consumer than from the standpoint of the company defense attorney. The most effective companies will offer consumer education that goes well beyond scaring the hell out of employees about how five minutes after they reject the idea of buying long-term care coverage they will have a stroke or be severely injured in an auto accident!

Given the current state of the federal government’s zeal to borrow money for current needs without equal attention to how this debt will affect future generations, it is unlikely that a federal program, such as yet another Medicare extension, will be forthcoming or comprehensive. If you can’t rely on the federal government to step in with help, and if you don’t want to saddle your own children with a family version of the huge national debt, then explore long-term care coverage as a 21st century benefit which will be just as important tomorrow as health insurance and retirement savings are today. Be a visionary and explore the possibilities now!

Meanwhile, let’s agree to meet for lunch 20 years from now in our respective nursing home cafeterias to discuss whether the predictions in this article have come true, and whether you have taken steps for yourself and your agency’s employees to be better able to control their destinies under circumstances we have trouble imaging right now. I’ll be the one at the corner table eating applesauce and jello Ð but also sipping a Guinness and eating chocolate!

May you have few cares in the long term!

Phil Rosenberg
The HR Doctor


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