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Old 08-10-2015, 06:16 PM   #61
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Can you please elaborate? My mother has been in two Alzheimer's residential care facilities, and in neither case did we have to "lay bare" all of her finances. We just signed a contract agreeing to pay her monthly fee.

What am I missing here?
Thanks, that is good to hear. I ran into this several times when I was examining LTC. Here is a well know site. Look at #7. It justifies by reference to financial aid but it looks like they may want the information to assure private payment ability too.

Nursing Home Checklist
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Old 08-10-2015, 06:27 PM   #62
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I suppose it depends on how well the early retiree is financed, and their other sources of annual income. If you can cut, say, $360K out of the FI portion of your portfolio today and live on the remaining portfolio OK, then you can self insure. 3 years is what most LTC policies cover. If not, then you have better have a hard look at your alternatives.

Someone retiring on $1M might be in hazardous waters, as with a 50/50 portfolio there isn't much left in bonds and cash to weather a downturn. Someone with $2.5M would not be in as nearly a precarious situation, and it would behove them to do a little rebalancing as the near time expense of a nursing home became clear.
we have more than the 2.5 million and because the cost of living here is high we would be in a financial bind if we had to support more than a year or 2.

if they raise us to high eventually we may have no choice but to take our chances.

but for now i can keep that money fully invested and just a piece of the average gains will pay the premiums .
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Old 08-10-2015, 06:38 PM   #63
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"The nursing home has an obligation to determine if incoming residents meet the criteria for any state or federal funding. This process is similar in nature to a person divulging financial information to get a mortgage; the nursing home is, in effect, the patient's new home."

Uh, no. The nursing home is NOT the patient's new home any more than a hospital becomes a patient's home if they in hospital for more than a week.

Let's be clear: there is skilled nursing and there is assisted living/memory care.

In some cases Medicare will pay for skilled nursing (eg, after a qualifying hospital stay, they will pay in full for 20 days, and then in part for several more days). And after that, you and your supplemental insurance and/or long term care insurance will have to pay for skilled nursing care.

A contract is signed for admission to a SN or AL facility, and you agree to be the responsible party. They may want your insurance information, but most will not directly bill the insurance -- you pay and then submit for reimbursement. And there are the usual clauses in the contract that payment is due at the beginning of the month (pay in advance, not arears) and if the bill isn't paid by date x, the patient must leave.

So the only time I can see them demanding your full financial picture "as if you were applying for a mortgage" is if you are asking for Medicaid and they have to determine if you qualify.
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Old 08-10-2015, 06:45 PM   #64
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I'm not sure why nursing care would be $10,000 per month, but even if it was, I would imagine there would be some limits on the per day amount the policies would be willing to reimburse. So I doubt you would be shielded from the entire $10K expense if you had a policy.

Assisted living facilities are typical $3K - $7K per month, depending on how nice they are and where they are located. Again, most policies only cover the basics, not the five star resorts.

Nursing care is known for being higher than assisted living due to the higher level of attention needed. However, it is very rare for someone to be in a nursing facility for three years. Usually by the time you need that level of care, you're just about ready to go, or at least within six months.
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Old 08-10-2015, 07:07 PM   #65
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we took 350 per day with a 5% increase per year .

the place is up to us .

my dad was in for 5 years.

statistically it doesn't matter what the odds are of being in a home more than 3 years are . we only have two choices. either we are in more than three years or we are not . which one will you be ?
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Old 08-10-2015, 07:26 PM   #66
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Here's an example of what we're dealing with in Central Texas:

Good quality memory care/assisted living runs about $200/day. ($6k/month)
Good quality skilled nursing runs about $300-$350/day. ($9k/month)

We're not talking luxury here -- just places that we are confident she will be well looked after and kindly looked after (those aren't the same thing!). The LTC insurance company doesn't care where she is or how much it costs over their daily reimbursement -- that's our problem.

My mother's LTC policy had COLA frozen about 8 years ago. Thus it pays $140/day -- either for skilled nursing or assisted living --and she "self-insured" for the difference of $60/day. The policy will eventually pay out $154K for her over the course of about 3.5 years. After that, we pay the whole thing out of pocket.

That's how my parents decided to split the pros/cons between insured and not insured for LTC. Cost-sharing.

It is likely she will spend more than 5 years in Alzheimer's assisted living; her body isn't wearing out.

When I faced a big jump in LTC rates last year after the Texas insurance board increase, I decided to bring my daily coverage down to the current cost of memory care, and "self insure" the difference if I end up in skilled nursing. I will continue to accept the COLA adjustments every three years unless they become prohibitive.

Why? My bigger concern is not being in skilled nursing for <3 years, but rather being in memory care/assisted living for > 5 years. That's the scenario I'm trying to cover with LTC.

BTW, if I didn't have a policy with unlimited lifetime cap, my thoughts might be different. But now for $1000 per year premium, I am content.
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Old 08-10-2015, 08:03 PM   #67
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It would be helpful if we had stats on average length of stay in assisted living or nursing care, as well as the percentage of the total population that is predicted to require such a stay. Without those details it's difficult to assess whether the insurance is worthwhile.

There will always be a few outliers who stay well beyond the average, but those are few and far between.
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Old 08-11-2015, 03:39 AM   #68
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why would that matter since as humans and not insurers we only have two possible outcomes ? things work out or they don't.

unlike insurers without knowing which side we are on being a little bit pregnant does not work for us . don't we all have fire insurance on our homes even if paid off with less than a 1% chance of a fire ? odds of needing long term care at some point are 77% .

but as far as statistically how long , unless you know which side you are on the info does you little good .
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Old 08-11-2015, 07:35 AM   #69
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So here's one data point for you.

My Mom passed away yesterday, age 95. She was really fairly independent until about 6 months ago (lived at home) until her COPD finally caught up with her and she needed assistance and eventually skilled nursing.

She had taken out a policy with Genworth around 1995. Paid approx $80k in premiums over the years (last payments were about $6K/yr). She had a $314K benefit max , daily max for skilled nursing was $178. The nursing home she was in charged $255/day. After the dust settles, I am sure Genworth got better by $70-$75K on that deal. YMMV.

I think the nursing home experience hastened her demise by a few weeks or months, but hey, she was 95...

She probably would have been best off in assisted living for a few years, but Genworth would not have paid for it because she was so healthy and didn't fit the criteria. Self insurance , in this case, would have been the best option.
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Old 08-11-2015, 07:38 AM   #70
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Nunthewiser, condolences on the passing of your mother.
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Old 08-11-2015, 07:38 AM   #71
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on the other hand , as i said above my co-worker is coming up on 200k in expenses only 1-1/2 years in since his stroke .

all which would have been covered under our policy..

one of the reasons many policy's got a big jump is just because they were paying out more than they were taking in .

todays policy's are very different . they are clearly worded and have none of the double talk older policy's did.

the steps to collect are very defined now .
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Old 08-11-2015, 08:37 AM   #72
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the steps to collect are very defined now .
oh yeah...insurance companies are such pushovers
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Old 08-11-2015, 08:47 AM   #73
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It would be helpful if we had stats on average length of stay in assisted living or nursing care, as well as the percentage of the total population that is predicted to require such a stay. Without those details it's difficult to assess whether the insurance is worthwhile.

There will always be a few outliers who stay well beyond the average, but those are few and far between.
Search online and on Morningstar. Morningstar had some short snippets of the stats. Within the last year I found a newer study that reworked the expected LTC stay for both those who return to the community and those who don't. I don't remember who did the study.

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why would that matter since as humans and not insurers we only have two possible outcomes ? things work out or they don't.

unlike insurers without knowing which side we are on being a little bit pregnant does not work for us . don't we all have fire insurance on our homes even if paid off with less than a 1% chance of a fire ? odds of needing long term care at some point are 77% .

but as far as statistically how long , unless you know which side you are on the info does you little good .
One is paying the insurance company to take on some of the risk. To evaluate the cost/benefit, one must understand or at least consider what the benefit is likely to be. While plans use to have unlimited coverage in cases, many if not all that are written now have time and dollar limits. The ones I looked at were this way. Even if you buy LTCI, it is quite possible you will outlive the policy if you go into LTC for Alzheimer's... In the end we are individual cases as you note. For the policies I looked at, if I needed in care in my early '80s, I could likely do was well to just invest the premiums and if I didn't need the insurance, I keep the $.

Buying LTCI does not mean your covered for all LTC needs. Buying fire insurance for the proper value of a property should cover the replacement. So, if you don't purchase LTCI, what do you do to prepare for LTC cost? For me, I'm funding an HSA to the max and investing the $ for a start. I will also earmark other moneys for that purpose. The real risk is if I need LTC early. A quick estimate indicates that later in life I would have investments to cover what the LTCI would cover.

That said, there were other types of policies brought up in this thread (I think... may have been another one) that may be more useful by protecting assets for the surviving spouse.
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Old 08-11-2015, 08:52 AM   #74
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oh yeah...insurance companies are such pushovers
well they are not push overs but many state insurance boards got in to the act of cleaning up these policy's making it harder not to pay .

i know our nys policy is very cleanly defined as to what they will pay and by whom's judgement .

believe me i am no lover of insurance company's either but the partnership plans are the best house in the worst neighborhood ..

there are other choices but they fall flat most of the time , like the linked benefit / life insurance plans .
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Old 08-11-2015, 08:55 AM   #75
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It would be helpful if we had stats on average length of stay in assisted living or nursing care, as well as the percentage of the total population that is predicted to require such a stay.
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Old 08-11-2015, 08:58 AM   #76
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pretty high percentages , but i did hear around 77% would need care of various types and lengths . of course like i said ,which group are you or your spouse ?

it is no different than retirement planning to 95. we all aint making it but we just don't know who is .
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Old 08-11-2015, 09:14 AM   #77
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todays policy's are very different . they are clearly worded and have none of the double talk older policy's did.

the steps to collect are very defined now .
What protections does your policy offer against extreme price increases? Is there a cap to how much it can increase each year, or is there just a requirement to get state approval for large increases?
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Old 08-11-2015, 09:31 AM   #78
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My father passed away last year after spending three years in assisted living/nursing care. The first year he was in a very nice place with a restaurant serving three meals a day. His fee was $4,000 per month. After his ability to function declined, we needed to move him into a smaller facility where they could watch him 24 hours per day. The room was smaller, and the service not quite as nice. The fee there was $3,000.



He did not have LTC, but between his pension and SS, he earned about $3,000 per month. So there was a small deficit that needed to be covered by savings each month, but nothing that was going to devastate him.



Had he purchased LTC, he would have been covered for up to three years of coverage. So even in the more expensive place, that would have represented $144,000 in coverage. So if self insuring for $144,000 is out of the question, then you may have to consider LTC.



However, looking at the retirement figures that most of the forum members have posted over the years, I would suspect that for the majority, a worst case of $144,000 would not bankrupt them. And to get that $144,000 in worst case protection, he would have likely had to pay $30,000-$40,000 in coverage. Taking that money and investing it would likely result in a future value of around $65,000, so the net savings is really not all that significant.



And, many policies have all types of limitations and exclusions regarding when you can receive coverage. For my Dad, we elected to decide when the time was right and where he would reside.

I will follow the above path as my strategy. So much easier being single to avoid dealing with pros/cons of LTC. My pension check can cover the nursing home bill. I would sign over my house to my GF to protect her. Look back period would be long expired before I could see scenario where that would ever come into play.


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Old 08-11-2015, 10:45 AM   #79
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on the other hand , as i said above my co-worker is coming up on 200k in expenses only 1-1/2 years in since his stroke .

all which would have been covered under our policy..
Older policies often had much better coverage. I was quoted (ok proposals based on our input data) from the same company. In the middle of the year they quite offering one policy and started another one "that was more correct based on present actuary calculations". Based on the total potential payment, the insurance cost/$ benefit increased by 60%, the elimination period doubled to 6 months, and I don't recall much else had changed... but both were based on $150/day. It looks like your co-worker was paying about $365/day. Those plans would not cover very well in these cases assuming all of your co-workers expenses were LTC (not medical included).
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....
I'm guessing REWahoo's chart will not come through.. but I wanted to note that this only includes those who are in LTC at end of life based on the statement on the chart. So some of the important data is missing.

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pretty high percentages , but i did hear around 77% would need care of various types and lengths . of course like i said ,which group are you or your spouse ?

it is no different than retirement planning to 95. we all aint making it but we just don't know who is .
I agree. I've run the fido RIP to 115 to see what income I could likely expect. Interesting results.
The question is when you plan out to age 95 or whatever, do you then go buy an annuity to cover the expenses (to insure your income)? Some do, some don't. For LTCI, I have not seen unlimited coverage these days except for what might be had in a partnership plan with unlimited asset protection. This appears to only be available in NY and IL. So each person needs to plan how they will cover LTC. The wild card is if you spend 5, 10, 15+ years in LTC. For most plans issued now, the individual is on the hook for most of the $. Look at it this way, you planned your retirement to age 95 and you end of being one who live to 108. So, did you buy the annuity? -- and was it inflation indexed?
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Old 08-11-2015, 02:41 PM   #80
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Older plans had lifetime coverage but the fine print made them hard to get much
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