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.

Man walks up steps into sky, teeters on top steps.

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.

 

Wheel of Fortune

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.

senior teeth

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.

For Medicare enrollees who lived in a nursing home or other long-term care facility in 2010, out-of-pocket dental care costs accounted for an average of less than $175 in out-of-pocket spending – and less than 1 percent of total out-of-pocket spending.

One possibility is that caregivers may stop paying much attention to the oral health of people who are already frail enough to be living in a nursing home. Another possibility is that lack of attention to oral health caused or aggravated the conditions that led to a need for nursing home care in the first place.

One clue: Medicare enrollees who were in excellent health in 2010 spent much more out-of-pocket on dental care than enrollees in poor health. The average level of dental spending was $538 for the enrollees in excellent health and just $111 for enrollees in poor health.

In Kansas, for example, researchers found that only 16 percent of nursing home residents surveyed had dental insurance, and 29 percent said they were getting no dental care at all. 

One lesson for post-retirement health planning clients is that brushing teeth, flossing, getting regular dental care, and paying for a dental insurance policy or a solid dental services discount program are as critical as paying the Medicare Part A premiums.

A second lesson is that one reason for clients to have private long-term care financing arrangements – and well-chosen, well-briefed care managers – is to increase the odds that the clients will get proper care for their teeth and gums in their later years.

See also: LTCI Watch: The Teeth.

Worried couple

4. People who have $20,000 to $30,000 in annual income may have an above-average need for LTCI and other insurance products, because, in the past, at least, those people have experienced above-average growth in out-of-pocket health care services costs.

Between 2000 and 2010, for example, Medicare enrollees spent somewhat more on health insurance premiums and used that spending to hold their increase in out-of-pocket health care services spending to 39 percent, to $2,692. People with incomes in the $20,000 to $30,000 invested less in insurance, and their out-of-pocket costs increased an average of 51 percent, to $3,060.

See also: Middle-income boomers aware of new retirement landscape.

Census Bureau baby boomer population distribution chart

5. The current gaps in what Medicare covers are unlikely to shrink any time soon.

Well-meaning, high-powered commissions have been talking about what the country should do about LTC costs. The Commission on Long-Term Care did what it could to get past congressional gridlock and remind lawmakers that both Democrats and Republicans get old. The Council on Alzheimer’s Research, Care and Services continues to meet regularly and talk about matters such as how nice it would be if someone collected better data on caregivers.

The Alzheimer’s council seems to be talking more about how to get family caregivers enough training and support that they don’t burn out than about any serious hope of squeezing more money for caregiving out of Congress.

Most of the people who are in Medicare and use long-term care (LTC) services today are part of the relatively small “Greatest Generation” or the “Silent Generation,” not the Baby Boom generation. The Greatest Generation and Silent Generation members who are in nursing homes now reached their prime at a time when the economy was strong and employer pension promises were generous.

But the Kaiser analysts still found that people ages 85 and up –  who have enjoyed the benefits of growing up and aging in such a prosperous era — still have to pay an average of $8,191 per year on out-of-pocket on health care costs

Consumers who want to plan for future health care bills would be wise to count on needing deep pockets.