No matter how many sales scripts you memorize, it’s hard to do much in five minutes to increase prospects’ income, or cure their morbid obesity.
You can do something about consumers’ ignorance about post-retirement health care costs, and about the sadly mistaken notion that “Medicare will take care of everything.”
Researchers at the Henry J. Kaiser Family Foundation have come out with a nice tool for fighting Medicare brain fog: an analysis of Medicare enrollee out-of-pocket health spending data. The researchers crunched the numbers and discovered something astonishing: The investments high-income enrollees make in health insurance premiums help them spend less, on average, on out-of-pocket health costs than Medicare enrollees with much lower incomes spend.
See also: For high-income Medicare enrollees, insurance pays.
The researchers developed the study to help policymakers protect consumers at all income levels against excessive, counterproductive levels of out-of-pocket spending. But here are five ideas from the study that could boost sales of long-term care insurance (LTCI) and other products that protect older consumers against Medicare coverage gaps.
1. Sure, the cost of LTCI premiums has increased – but so has the out-of-pocket cost of just about every other major category of health insurance expense that the Kaiser researchers considered.
LifePlans, for example, says the typical price of an LTCI policy for a consumer ages 65 to 69 increased to $2,759 in 2010 – up 86 percent from what comparable coverage might have cost in 2000.
But Kaiser analysts found that Medicare enrollees’ out-of-pocket spending on health insurance premiums of all kinds increased 76 percent during that period, to $1,989. In other words: Over that period, the cost of LTCI coverage rose just a little faster than the cost of Medicare enrollees’ other health care costs.
For some of the Kaiser study subgroups, spending on all out-of-pocket health premiums grew faster than LTCI premiums. For Medicare enrollees under age 65, for example, premiums increased 111 percent, to $948. For high-income people, spending extra money on premiums helped consumers hold down growth in out-of-pocket spending on health care services and total out-of-pocket health costs.
2. Consumers might think, “I’m not the poor soul who’s going to need long-term care,” but the truth is that the poor soul who does need long-term care will get giant bills.
Only 6 percent of the Medicare enrollees Kaiser looked at were in a nursing home or other care facility in 2010, but the enrollees were spent an average of $18,351 out-of-pocket on health premiums and services of all kinds, compared with an average of $3,918 for enrollees who spent the year living in the community.
Long-term care facility costs accounted for more of the Medicare enrollee out-of-pocket spending in 2010 than any other type of out-of-pocket spending.
See also: The new LTC basics.
3. Teeth matter.
The Kaiser analysts discovered that healthier and higher-income Medicare enrollees spent considerably more out of pocket on dental care than lower-income and sicker enrollees did.