PERA Long-Term Care Program May Be Trend Setter
The following is an excerpt from an article which appeared in the February 28, 1998 edition of the Colorado Tribune:
PERA Long-Term Care Program May Be Trend Setter
Americans have always seen "being old" as a far-off situation which—like the auto accident—always confronts someone else. But in recent decades, many more of us are living long enough to realize that we are very close to (and likely to reach) helpless old age. The nightmare of being thrown on the squalid scrap heap of used-up, worn-out humanity may now be pushing us to seriously consider somewhat better alternatives. One such effort has been mounted by the Public Employees' Retirement Association of Colorado (PERA). The following article concerns the new long-term care benefit program it has designed for its member's consideration.
(PERA 2/17)—Long-term care is one of the least understood healthcare issues facing Americans today. Consequently, paying for long-term care has become a ticking financial time bomb. Many people assume they will be covered for their long-term care needs, whether it is by Medicare or a basic health plan. The reality is that the majority of people are forced to pay long-term care costs out of their own pockets.
While many Americans are currently uninformed about long-term care and unprepared to meet its financial demands, a significant percentage of Colorado residents will soon have access to a "safety net." Colorado's Public Employees' Retirement Association is making available a long-term care benefit program to its 200,000 members and retirees. The benefit will also be available to members and retirees' spouses, parents. parents-in-law, grandparents, and grandparents-in-law.
"The new long-term care program available to PERA members and retirees comes at a time when the demand and cost for long-term care is escalating rapidly," says Renae McKenny PERA's Director of Insurance Programs. "The PERA Board of Trustees is addressing these issues by making an innovative long-term care program available to the members and retirees of our association. Long-term care is a strong complement to our program—it is the benefit of the decade."
Following a competitive proposal process, PERA's Board of Trustees selected U.S. Care, one of the nations oldest and largest long-term care management companies, to serve as the program manager.
Long-term care is the kind of care needed when a person has a debilitating illness or accident that leaves him or her unable to perform routine "activities of daily living," such as eating, toileting, bathing and dressing. Several factors have been attributed to driving the growth and increased need for long-term care, including lengthened life expectancies resulting from improved medical technology; the aging of America's "Baby Boomer" generation; and the needs of the "sandwich" generation who struggle with caring for both their children and their aging parents.
A common misperception is that health plans, including Medicare provide long-term care coverage, when in fact, they provide only limited coverage for skilled nursing and home care coverage. Medicare pays for less than seven percent of all long-term care costs, according to the U.S. Health Care Financing Administration (HCFA).
Medicaid only provides long-term care for those with low income.
The new long-term care program features three different plan choices, with a wide range of benefits, including home health care, community-based care and nursing home care. Open enrollment for the program began January 30 and runs through April 30. PERA members and retirees may not have another opportunity to enroll in the program until the year 2000.
As PERA is extremely thorough in researching its participants' needs and program providers, new benefit offerings only occur every three to four years. PERA conducted extensive research, including targeted focus groups and surveys, to determine what their members and retirees wanted most out of a long-term care benefit plan.
Key issues of concern to PERA members and retirees, such as flexibility, were addressed within U.S. Care's three benefit plan options. For example, all options include a pool of dollars benefit by which participants can allocate funds to cover care in appropriate setting(s) of their choice.
Additional features of the benefit plan include the assistance of personal Care Advisors to help families identify and obtain long-term care services; a total 60-day waiting period per lifetime before benefits begin compared to 90 days accumulated in any 12-month period for most long-term care plans; and a ten-pay rider option where the member or retiree pays premiums for only the first ten years, after which benefits continue with no further premium payments.
"We're pleased to be a part of PERA's initiative to respond to long-term care issues and the needs of its members and retirees," comments Samuel X. Kaplan, founder and chairman of U.S. Care. "Given the mounting demand and the spiraling costs of long-term care coverage, we're confident that our customized long-term care program will become a popular benefit with PERA members and retirees."
Underwriting the program is MedAmerica Insurance Company, which has received an A- (Excellent) rating, from A.M. Best and Standard & Poor's, the world's two most respected ratings companies. MedAmerica is the only insurance carrier in the nation dedicated exclusively to long-term care.
PERA's wide reaching membership is comprised of employees of 394 affiliated employers, including state government, public higher education institutions, all school districts (except Denver Public Schools), the judicial system, municipalities, public health departments, and special local districts, as well as retirees.
PERA was established in 1931 by the Colorado General Assembly as an instrumentality of the state. The 24th largest public pension fund in the country, PERA has more than $23 billion in assets. It provides lifetime benefits to its members and retirees, including health care coverage for benefit recipients and their qualified dependents, disability retirement benefits, 401(k) voluntary investment plan, two voluntary life insurance plans, and annual benefit increases.
U.S. Care is the nation's leader in long-term care management. U.S. Care offers a comprehensive range of services, including the development and implementation of long-term care products and quality assurance programs for individuals and Group Benefit Plans.
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