Joe Lucey

If you purchased health insurance in the individual marketplace before implementation of the Patient Protection and Affordable Care Act of 2010 (ACA), then you’re aware of the challenges that came with that process. Applicants had to complete lengthy questionnaires detailing current conditions and all diagnoses and treatments (including history of prescription drug use) from their past. This was called medical underwriting, and it was designed to measure how much risk the health insurer would have to accept to cover you, based on the likelihood of your needing coverage for expensive medical bills.

Part of the underwriting process included accessing and reviewing all medical records, so if you left out a condition, it would be discovered. Some conditions, even if the patient were fully recovered, could trigger an automatic denial. Back then, nearly one in five applications (18 percent) was declined as a result of medical underwriting.

Other conditions would trigger higher premiums and/or limits to coverage. Health insurance in the individual market was just that: Individual. Medical underwriting tailored the policy and premiums for each person’s medical history and likelihood of getting sick, which is why premiums were so much higher than in the employer group market. In the group market, the entire population is lumped into one insurance pool regardless of health, and no one is denied coverage.

It’s important to recognize that even before ACA, health insurance premiums were rising exponentially in the individual market and in the employer group market. One of the primary aims of the ACA was to cover as many Americans as possible, and by adding more people to the individual insurance pool, it was projected that premiums could be reduced. However, rates still rose, with costs averaging 22 percent more for the most popular ACA plan in 2017 over the 2016 rates.

Experts project that if medical underwriting was reintroduced to the individual market, more than one in four (27 percent) of non-elderly adult applicants would be denied coverage. However, most of the discussion about a replacement for the ACA includes protections for those with pre-existing conditions.

No matter what happens, though, many Americans, even those with coverage through their employers, remain concerned about health care costs. A recent study showed that 25 percent of Americans are “very worried” about being able to afford health care, and more than half are at least somewhat worried.

As we get older, it becomes harder for many of us to engage in the fitness and athletic pursuits we’ve enjoyed for years. It’s tougher — both mentally and physically — to play a full round of golf, two sets of tennis or take a daily two-mile walk. It also can be very discouraging to accept diminished performance, such as losing a tennis match to someone you used to beat. And just getting out of bed the next morning with creaking joints, sore muscles and general aches and pains can be a painful reminder that we’re not getting any younger.

However, if we don’t keep making the effort, starting anew after a prolonged period of lethargy can feel insurmountable — particularly trying to resume activities at our previous levels. So it’s better to take a slow-down route; to accept our reduced capabilities (and ensuing losses, if necessary) and understand that the point of exercise is no longer to excel, but to persevere.

The reality is that staying active can help ward off health issues. Fortunately, there are plenty of things we do every day that can help maintain a high level of fitness without expending excess effort. For example, when you do things you love, like swimming or playing with your grandchildren, you reap healthful benefits without feeling like it is exercise. Yes, you do feel exhausted afterward, but that’s the point.

Other things you can do that do not require being a slave to a fitness regimen include gardening, dancing, bowling and bicycling. One of the keys to staying fit as you age is to focus on choosing activities that increase the heart rate, require changing positions and flexing muscles and, most importantly, are activities you enjoy. Plus, the greater variety the better, as constant repetition can wear down aging bodies.

Bear in mind that it is important to consult with a physician before starting a new vigorous activity, particularly if you have a history of heart disease, balance issues, joint pain, or any other chronic health condition.

The long-term care (LTC) insurance industry suffers from a similar malady as health insurance: When fewer people buy policies, insurers must charge higher premiums, which, of course, deters even more people from buying policies. With the graying of America, LTC insurance should be a booming business, but in recent years, it’s been rapidly declining. Last year, despite the fact that around 3 million people turned 65, only 100,000 LTC policies were sold in the U.S.

Like health care, the long-term care industry is experiencing rising costs, yet, with a shrinking insurance pool, insurance carriers are looking for a viable solution to help cover these increases. Premiums are up, and coverage options are down. Many pre-retirees and retirees question the stringent criteria to receive benefits and the limited coverage lifespan. Some LTC policy owners can’t take advantage of their benefits during a short recovery stint. Generally, LTC policies are designed for the last few years of life. The trouble is those “last few years” may now continue for a decade or more — much longer than many policies cover.

Is it worth it to buy traditional LTC insurance? It’s important to recognize that traditional health insurance and Medicare do not cover the costs of long-term care if that’s the only care you need, and Medicaid requires spending down assets to qualify for benefits. Presently many individuals only have the option to either pay out of pocket or buy insurance with LTC coverage.

Up until recent years, LTC insurance had been the only viable solution to guarantee a way to help pay for long-term care, either provided at home or in a facility. However, today’s healthier, longer-living retirees who could use some help around the house may wonder if those expensive premiums could be put to better use in the household budget. Currently, premiums run $3,000 to $6,000 a year depending on age, gender, health status, coverage term and daily reimbursement rate.

The problem is trying to plan for an uncertain future. If one or both spouses need full-time nursing care, that cost can deplete a retirement nest egg. On the other hand, does it make sense to keep paying expensive premiums when that money could be better used on a daily basis for a handyman, lawn care, house cleaning and/or a driver?

Depending on individual circumstances, some people may want to consider allocating those funds to other types of financial vehicles, particularly ones that offer alternative options for long-term care coverage in addition to growth opportunity. In fact, in recent years, the LTC insurance industry has begun to reinvent itself in order to meet unprecedented demand with additional options to help cover the costs of long-term care. Some insurance carriers have started offering an array of short-term benefits, lifetime coverage and policies that pair traditional life insurance or an annuity with an LTC rider. Please note that the addition of an LTC rider may require an additional fee, may be subject to eligibility requirements and may not cover all the costs associated with long-term care.

It’s important to consider how to pay for possible long-term care when you develop a retirement income plan. Consult with an experienced financial professional about what options are available and what would be appropriate for your particular situation.