In addition to bringing in the lawyer, don't be shy about sic'ingthe state insurance department on the insurer. Most state insurance departments would be positively thrilled to hit a insurer with a big, fat consumer issue fine.
I was ready to have the lawyer and the state start the epic apocalyptic battle on Dad's behalf, but peace broke out before we had to fire a shot. The claim's been approved.
I waited (almost) patiently for three working days, and yesterday morning I called John Hancock to remind their claims processor's voicemail that I was still waiting for an update.
She called back @12:30 (6:30 PM Boston time) full of apologies. As soon as she finished expressing her regrets for her "oversight", she said the claim was approved. She said the doctor's assessment was exactly what they needed, the psychologist did a great job, absolutely no doubt. She said the contrast between the care facility's MDS/MMSE and the psychologist's report was so stark that it was like reading about two different people. I'm going to tug on that thread with the care facility.
The approval is retroactive to the expiration of the 100-day exclusion period (15 July). Hancock's confirmation letter is on the way. Today I'll fax the bills for July (16-31) and August for Dad's full reimbursement of 47 days (x $214/day = $10K).
September's payment (and subsequent months) from Hancock will be assigned directly to the care facility. The policy's 5%/year inflation rider continues to accrue through the end of 2012 (I have that in writing now too). The daily dollar limit this year is $240/day, in 2012 it's $253/day, and starting in 2013 the policy tops out at $265/day. The policy total limit is $288K now and will top out in 2013 at $318K.
Even if the care facility boosted their $214/day rate to the policy limits tomorrow, it's still enough coverage for 3.5 years. The facility's business manager projects 2% inflation, and without plugging anything into a spreadsheet I think that still means the policy will last about 4.5 years.
Dad's pension & Social Security are just under $3500/month, and that amount will probably stay flat or drop slightly (as Medicare premiums rise). Still, every year that LTC is paying his bills adds another $42K of income to his assets. His Medigap insurance is about $300/month. His pension's prescription plan(!) has a copay of about $20/month. His only other "expenses" are haircuts, snacks, SUV insurance, and state/federal taxes.
Each year of pension/SS income now (before the policy runs out) will someday pay for another five months of long-term care (after the policy runs out). That'd be a total of about 1.5-2 years. At that point he'll start spending down his savings. I'm sorry to say that I don't think he'll outlive his assets.
A couple months ago Dad agreed to sell off two of his mutual funds with high expense ratios (Fidelity Magellan and "International Value") and half the shares of his only remaining individual stock. The cap losses on the funds were offset by the gains on the stock. The dividends & cap gains on his other mutual funds are being paid out in cash, not reinvested. He's about 70/15/15 stock/bonds/cash now (down from 85/15) but the cash will be rising over the next three years. Over the next few years we'll keep selling the rest of the stock and most of the equity mutual funds in a tax-efficient manner, but with the pension income he'll have enough cash for several years of expenses.
The worst financial surprise I can see would be if Dad had a medical crisis or an accident that hospitalized him (on Medicare). He'd eventually return to the care facility to resume his residency (with some weeks of rehab paid by Medicare). That would re-trigger John Hancock's 100-day exclusion and cost Dad a couple months out of pocket. However the policy would just be suspended and would restart after the 100 days. But Dad's physical health is OK now.
I'll have to spreadsheet all of this out over the next week or two, but I think his assets are going into autopilot (with annual tax-efficient equity sales) until 2014.
Next target: the lawyer's petitions for guardianship/conservatorship. She's supposed to be filing next week and we hope the hearing's before the end of Sep.
Dad broke his apartment lease at the end of July, but the property manager has been reeeeeal slow to tell us what's happening with Dad's security deposit. I'll sort that out next week. One more small gas/electric bill to come, and then that's all done too.
