Planning for Future Medical Costs Rod Perkins Genworth Financial

1. “Growing Older, Planning for the Future:Summit on the Issues of Aging”Sponsored by Congressman Michael C. Burgess, M.D. Planning for Future Medical CostsRod PerkinsGenworth Financial Company Confidential

2. Discussion Topics • The Health Care Issues and Expenses Associated with Aging • Options for Planning and Preparing • Steps You Can Take and Resources Available to You

3. Health Care vs. Long Term Care • Health Care • Treatment and prevention of specific health conditions • Often associated with “acute” care • Long Term Care • Ongoing care after an injury or illness is stabilized, or care due to slowly deteriorating health (“chronic” care) • Help with Activities of Daily Living such as dressing, eating, and bathing • Help provided in your home, or a variety of settings or facilities

4. Health Issues Give Rise To LTC Needs • Dementia • Stroke • Cardiovascular • Musculoskeletal • Brain • Fracture • Cancer • Respiratory • Other

5. Funding Options Health Care • Health Insurance – Covers medical expenses such as doctor visits, hospital, and prescriptions • Medicare – US Government Program provides basic hospital, medical, and prescription drug insurance to Americans over age 65 • Medicare Supplement Insurance and Medicare Advantage – Provides a supplement to Medicare Benefits • Medicaid – State and Federal government welfare program that provides health care to people with very low income and assets

6. Funding Options Long Term Care • Health Insurance – Does not pay for most LTC including custodial care • Medicare – Does not pay for most LTC. Requires approximately $118/day in coinsurance starting on day 21 – coverage ends on day 100. No coverage for assisted living or adult day care. • Medicaid – Only available after depletion of assets, limits choice as to available care • Personal Savings – If you have considerable savings and investments • Family – If your family can help financially or as caregivers • Private Long Term Care Insurance

7. Long Term Care Realities • Most Americans (75%) admit to having made no long term care plan for themselves or a spouse • Four out of ten Americans will use a nursing home at some point after reaching age 65, and 60% will require some form of long term care • 40% of those currently receiving long term care services are between the ages of 18 and 64 • Factors contributing to the risk of needing LTC include age, gender, lifestyle, and family history LTC is one of the greatest personal and financial risks Americans have not planned for

8. The Cost of Long Term Care • The average annual cost for a private room in a nursing home is $74,806 (Dallas - $55,023, Austin - $71,740, Houston - $64,678, San Antonio - $64,612, Rest of TX - $48,446) (Genworth Financial 2007 Cost of Care Survey) • Women typically need care for longer (on average 3.7 years) than men (on average 2.2 years). • Care may be required in a variety of settings, including: • Assisted Living Facilities: ($32,573/year) • Home Care: ($32.37/hour for Certified Home Care Services, and $17.46/hour for Homemaker Services) • Other models such as Adult Day Care are becoming more prevalent

9. The Importance Of Having A Plan The cost of LTC services often exceeds what the average person can afford to pay from income and other assets. With a plan you may be able to: • Save your assets and income for other uses • Have greater choice over where and how you receive services (such as being able to stay in your home longer) • Reduce emotional and financial stress on you and your family and involve your family in the planning process

10. Long Term Care Insurance • LTC Insurance helps pay for the long term care services you might need as a result of a chronic disease, serious accident, sudden illness, or cognitive impairment such as Alzheimer’s • Long term care services may be provided by a health care professional such as a nurse, home health aide, or other personal care providers such as a family member or personal care attendants • Varying amounts of care can take place in a variety of locations ranging from a few hours of care per week at home to round-the-clock care in a nursing home

11. Government Programs To Help You • LTCI Partnerships • Combine Public and Private resources to help individuals prepare and plan for their long term care • Provide Medicaid asset protection equal to the benefits utilized from a qualified long term care insurance policy • HHS Own Your Future Campaign • A joint federal-state initiative to educate the American public about the importance of planning for future LTC needs • Letter from Governor Perry sent to Texans ages 45 to 65 (11/06) • A “Long Term Care Planning Tool Kit”

12. The Good News: What You Can Do Now • Assess your need for LTC – Talk to you doctor • Decide where you want to receive care – Find out what is available in your area • Talk to your family about care-giving and funding options • Review your current coverage – understand limitations • Determine how you will fund your LTC (Private LTCI, self-funding, government programs) • If you are employed, ask your employer about Group LTCI • Investigate housing considerations (home modification, movement to a more suitable environment)

13. Planning Information And Resources • Visit the National Clearinghouse for LTC information at www.longtermcare.gov • Obtain a copy of the HHS “Own Your Future Long-Term Care Planning Kit” at www.aoa.gov/ownyourfuture or 877-PLAN-LTC • Contact the Texas Department of Aging and Disability Services at www.dads.state.tx.us/services for services for older Texans • Compare private long term care insurance companies and obtain an LTCI Shoppers Guide from the Texas Department of Insurance at www.tdi.state.tx.us • Contact the HHS Administration on Aging’s Eldercare Locator at (1-800-677-1116) for senior services and resources • Obtain “A Guide to Long Term Care Insurance” provided by America’s Health Insurance Plans at www.ahip.org

14. THANK YOU!