More OT: Long term care insurance

[C40_guy]

Just starting to look into this, am not sure what I should be looking for, etc....

Would appreciate basic guidance, pointers to good suppliers, things not to do, etc.

I do not have an insurance broker as all of our insurance is through USAA. USAA offers LTC insurance, but it does not seem to be a big piece of their business...I have not been able to talk with anyone there yet...

Thanks!

[tomato coupe]

My wife's parents are in their mid 90s and are in an independent living facility. In addition to the facility expenses, they pay a few thousand each month for someone to come in and help them with various things. They have long term care insurance, and it has paid exactly $0 of their expenses. Nothing seems to be covered, and it is very difficult to find an arrangement where the insurance would actually pay for some of the expenses. It looks like they threw away a lot of money.

[rccardr]

Talk to the folks atAARP. Experts in the matter.

[dbh]

Funny, just had this conversation with the in-laws this weekend about their plan. Wasn't even sure you could still get long term care on the open market given that many insurers underestimated the costs of plans they sold many years ago. FWIW, in regards to the previous poster's comment about their in-laws's long term plan coverage not paying anything, it was my understanding that such coverage really comes in handy for nursing care, whether that's in a nursing facility or an in home nurse. The costs can be astronomical, and of course Medicare doesn't cover long term nursing care. On the flip side, it's fortunate that they're in there 90s and don't need any long term skilled nursing care.

[Ozz]

Originally Posted by dbh

Funny, just had this conversation with the in-laws this weekend about their plan. Wasn't even sure you could still get long term care on the open market given that many insurers underestimated the costs of plans they sold many years ago. FWIW, in regards to the previous poster's comment about their in-laws's long term plan coverage not paying anything, it was my understanding that such coverage really comes in handy for nursing care, whether that's in a nursing facility or an in home nurse. The costs can be astronomical, and of course Medicare doesn't cover long term nursing care. On the flip side, it's fortunate that they're in there 90s and don't need any long term skilled nursing care.

We got ours about 15 years ago thru John Hancock...pricey, but inflation adjusted payouts and covers just about everything.

We looked at redoing it about 6 years ago, and found out we couldn't get anything like what we have....we feel pretty fortunate.

State of WA is putting together some sort of "LTC for All"....not sure of the details, but kind of a hot topic for my wife's clients. Apparently you can get out of paying the tax for it, if you have a LTC plan in place....again, not sure of details.

[unterhausen]

Originally Posted by dbh

Funny, just had this conversation with the in-laws this weekend about their plan. Wasn't even sure you could still get long term care on the open market given that many insurers underestimated the costs of plans they sold many years ago.

My MIL had long term care insurance and it was a very good deal for her. When we looked into it recently, it was so expensive that it wasn't worth it. We got what amounts to an annuity.

[yngpunk]

Originally Posted by rccardr

Talk to the folks atAARP. Experts in the matter.

AARP suggests to start long term care insurance when you are 60-65, but as others have mentioned, when first offered, insurers under estimated costs and got hammered, so LTC insurance has become pretty expensive.

The other option is to self insure...take the premiums you would be paying for long term care insurance and invest those funds and earmark them for long term care costs down the road

[C40_guy]

Originally Posted by yngpunk

AARP suggests to start long term care insurance when you are 60-65, but as others have mentioned, when first offered, insurers under estimated costs and got hammered, so LTC insurance has become pretty expensive.

The other option is to self insure...take the premiums you would be paying for long term care insurance and invest those funds and earmark them for long term care costs down the road

We're just entering that age bracket.

I haven't done the math yet, but it *feels* like self-insuring may come up short relative to LTC insurance. Once I get the initial numbers (and I've heard estimates of $400/month per person) I'll do some playing with numbers...

...but healthcare costs *can* be astronomical...

[yngpunk]

Originally Posted by C40_guy

We're just entering that age bracket.

I haven't done the math yet, but it *feels* like self-insuring may come up short relative to LTC insurance. Once I get the initial numbers (and I've heard estimates of $400/month per person) I'll do some playing with numbers...

...but healthcare costs *can* be astronomical...

Keep in mind that LTC premiums can (and will) increase, but insurance companies do need to ask approval from state insurance board, so there is some "regulation" to keep increase down, but no guarantee...and you have to pay year after year to keep coverage. Also, keep in mind limitations of long term care benefits...I think many policies put a limit as to how much and how long coverage is as well as when coverage can start and what criteria must be met for coverage to kick in.

[ripvanrando]

My parents paid into LTC for decades. Surely more than 100K.

They paid out nothing.

[Ralph]

Have a 93 year old MIL in a nursing home. She has John Hancock LT care insurance. It only kicked in when she couldn't perform the normal daily functions of toileting, feeding, dressing, etc.

My take after all this experience is this: If you are very well off and can afford $10,000 to $12,000 per month for skilled care, you don't need it. It's really just protecting some of your kid"s inheritance....after you have maybe spent a small fortune on the insurance. And my MIL had spent about $50,000 in premiums. And it only kicks in after one can't perform some of those daily duties.

If you are of more modest means.....after you have spent down your savings, Medicaid kicks in and pays all, after Medicare coverage ends (20 days each 6 months).

My MIL had about $200,000 in savings, and needed skilled care at about age 89, but could still perform some daily functions, LT insurance wouldn't pay, so she had to spend her money until she met the Medicaid requirement of less than $2000 in financial assets or less than $2000 per month of income (Florida medicaid rules).

And having that LT care policy messed up her getting approval for medicaid.....so I had to put the LT care policy in a trust, out of her estate, to get her qualified for Medicaid.

So now I take her LT care payment plus her SS check and pay against her nursing home bill, and Medicaid pays the rest.

Medicaid would pay all of her nursing home bill if she didn't have LT care insurance. So her $50,000 or so in premiums were wasted, but she gets a good feeling from doing this as she is doing the best she can to not be a burden on society.

So....In my opinion....if you are well off and can fund your own care, with what help Medicare gives....you don't need LT care Insurance.

If you are of modest means....and can qualify for Medicaid (In Florida $2000 of financial assets and less than $2000 per month of income) after you spend yourself down to those levels, you don't need LT care insurance....Medicaid will pay.

If you are in between.....Can't afford skilled care of $10,000 or so per month), and can't qualify for Medicaid....whatever your state rules are......you have a problem. And some of us have no way to get our income below Medicaid requirements even if we are broke.

And haven't seen many people in assisted care which costs about 1/2 of skilled care....be sick enough to trigger the benefits of their policies.

My opinion....This is a mess Congress should look at.

[thwart]

Originally Posted by Ralph

Have a 93 year old MIL in a nursing home. She has John Hancock LT care insurance. It only kicked in when she couldn't perform the normal daily functions of toileting, feeding, dressing, etc.

My take after all this experience is this: If you are very well off and can afford $10,000 to $12,000 per month for skilled care, you don't need it. It's really just protecting some of your kid"s inheritance....after you have maybe spent a small fortune on the insurance. And my MIL had spent about $50,000 in premiums. And it only kicks in after one can't perform some of those daily duties.

If you are of more modest means.....after you have spent down your savings, Medicaid kicks in and pays all, after Medicare coverage ends (20 days each 6 months).

My MIL had about $200,000 in savings, and needed skilled care at about age 89, but could still perform some daily functions, LT insurance wouldn't pay, so she had to spend her money until she met the Medicaid requirement of less than $2000 in financial assets or less than $2000 per month of income (Florida medicaid rules).

And having that LT care policy messed up her getting approval for medicaid.....so I had to put the LT care policy in a trust, out of her estate, to get her qualified for Medicaid.

So now I take her LT care payment plus her SS check and pay against her nursing home bill, and Medicaid pays the rest.

Medicaid would pay all of her nursing home bill if she didn't have LT care insurance. So her $50,000 or so in premiums were wasted, but she gets a good feeling from doing this as she is doing the best she can to not be a burden on society.

So....In my opinion....if you are well off and can fund your own care, with what help Medicare gives....you don't need LT care Insurance.

If you are of modest means....and can qualify for Medicaid (In Florida $2000 of financial assets and less than $2000 per month of income) after you spend yourself down to those levels, you don't need LT care insurance....Medicaid will pay.

If you are in between.....Can't afford skilled care of $10,000 or so per month), and can't qualify for Medicaid....whatever your state rules are......you have a problem. And some of us have no way to get our income below Medicaid requirements even if we are broke.

And haven't seen many people in assisted care which costs about 1/2 of skilled care....be sick enough to trigger the benefits of their policies.

My opinion....This is a mess Congress should look at.

This.

A lot of folks in that middle ground area... not enough funds to pay $50K-$100K for LTC insurance over the years, but too well off to qualify for Medicaid.

[Dave]

I'd rather be dead. I don't want thousands per month spent on avoiding the inevitable.

My 92 year old mother-in-law lives with us. She has no money and survives on SS. When she can't care for herself she'll have to go to a rest home that will accept her SS as her only payment. My parents were in the same boat. No one paid thousands per month for their care. My father was a 350lb drunk who had a stroke at 68 and spent 10 years in a rest home. Mom had dementia by age 74 and died at 82, in the same rest home. When the dementia gets bad enough you quit eating and starve to death.

[verticaldoug]

Originally Posted by Dave

I'd rather be dead. I don't want thousands per month spent on avoiding the inevitable.

My 92 year old mother-in-law lives with us. She has no money and survives on SS. When she can't care for herself she'll have to go to a rest home that will accept her SS as her only payment. My parents were in the same boat. No one paid thousands per month for their care. My father was a 350lb drunk who had a stroke at 68 and spent 10 years in a rest home. Mom had dementia by age 74 and died at 82, in the same rest home. When the dementia gets bad enough you quit eating and starve to death.

Sounds like the mythical Japanese practice of Obasute.

https://en.wikipedia.org/wiki/Ubasute

https://www.youtube.com/watch?v=iueQ3yBISco

[benb]

My wife's parents (70s) have it and so my wife has been interested in it.

Our financial advisor has really been asking us to say "No thanks." (We're mid-40s). He really wants us to concentrated on self insuring. If you've got the ability to manage your savings well it makes more sense.

LTC was not well conceived and a lot of the insurance companies are having a lot of trouble with it, losing large amounts of money. There are lots of them that are having major problems, they wrote a lot of fixed premium term policies that were based on poor projections of how much LTC was going to cost and how many of the policy holders were going to need to rely on it. There have been recent stories about insurance companies getting state regulators to carve them out exceptions so they can break out of their contracts with customers and raise the rates significantly. It can also just be sunk money if you die suddenly and never get any benefit from it.

There's an aspect to this that's like feeding the beast too.. I think to a certain degree it's the same situation as cheap easy to get government college loans.. the industry that gets paid out of this money just keeps raising prices as long as they can if there's someone to foot the bill and no regulator to price control them. As long as the insurance is paying the LTC costs per day will just keep going up.

That middle ground is tough.. but the way this forum spends conspicuously the average audience here ought to be going into retirement with many millions in retirement savings and should be able to self insure.