Long term care meeting

[dallas27]

With a NW of >$6M at <45 of age, I'm not sure what problem you're trying to solve.

By the time you'd need LTC your NW could be well over $25M in today's money. Pay the bill.

Me bed-stricken, a nurse, and 6 million dollars. Only one way that story ends.


Sent from my iPhone using Early Retirement Forum

 

[mathjak107]

No. It's not a waste. IMHO, LTCI is more like life insurance. When I bought my life insurance I was given a premium table. It showed the lowest, expected and highest premium I would pay. Obviously, by purchasing it earlier in life, I got a better rate than buying it later, or after I had been seriously ill.

When I can see that in a LTCI plan, I will consider buying it. Currently, from what I understand of LTCI, new customers are paying huge rates to make up for the fact that they insurance companies underestimated the usage of the previous LTCI policies. At some point the insurance industry has to get a grip on this problem.

the huge increases were really to the older policy holders ,some who even had lifetime benefits.

the actuaries got the early years wrong and eventually those folks saw 30-40% increases up to the levels it should have been.

kind of like living in a rent stabilized apartment and then getting a bigger than normal rent increase voted in.

today it seems they have it priced right and increases have been very slight if at all.

 

[Free To Canoe]

...
in fact 77% of us will need in home care at some point ....

Nursing home
Average stay 1 year
Percent needing this in a lifetime 35

There's more in this non-insurance company link that maybe the OP can use at his meeting.

How Much Care Will You Need? - Long-Term Care Information

 

[dtbach]

so my question is what are you doing with the money for the long term care you are self insuring with?

if keeping it invested what if we have an extended down turn and it is a fraction of the amount?

usually self insuring just means i will roll the dice, hope i don't need care and no provisions are generally made .

what really swayed us is when we met with our estate attorney he was telling us how a big part of his business today is folks coming to him after the fact they need that care and trying to scramble to protect assets and negotiate settlements with medicaid so as to avoid actually blowing through that money they never really set aside.

one other big factor when self insuring and not all that wealthy:

every dollar you spend as the stay at home spouse is a dollar less you yourself have to live on or as security. it means alot of expenditures for things do not get made because everything becomes a trade off.

more often than not the care would be alot nicer and better if someone else was paying for it other than the spouse that has to continue to pay these bills and maintain their lifestyle as well.


just food for thought.

You can go broke trying to insure every possibility. I just don't think the $$ involved is worth it. I'll take cruises any day over worrying about nursing home expenses. To each his own.

 

[mathjak107]

Nursing home
Average stay 1 year
Percent needing this in a lifetime 35

There's more in this non-insurance company link that maybe the OP can use at his meeting.

How Much Care Will You Need? - Long-Term Care Information

only problem is averages mean nothing to us humans . they only mean something to insurers.

as humans we can only have 1 of two outcomes. things either work out or they don't. kind of like trying to be a little bit pregnant.

that is why even average life expectancy means little in retiremenrt planning . insurers can tell you how many people a year will die but since they can't tell us who smart planning says we plan to 90 or 95 regardless. once again things either work out for us or they don't. no statistic needed.

at these rates even a few years of care can leave a stay at home spouse in serious financial trouble if you are the part of the statistic things didn't work out for. personally we won't take that chance it is one of us.

 

[mathjak107]

You can go broke trying to insure every possibility. I just don't think the $$ involved is worth it. I'll take cruises any day over worrying about nursing home expenses. To each his own.

you don't need to insure everything in life ,just the stuff that will be catastrophic. it also does not mean you need to insure fully either- homes in our area are about 400 a day inflation adjusted . i took 300 a day insurance inflation adjusted. . i will eat the rest if i have to.

 

[pb4uski]

We are self insuring for now. If one of us needs nursing home care in our later years, we could handle the cost depending on how long it lasts. The disaster scenario is that we both need nursing home care for many years - which just means that DD and DS would get a much lower or no inheritance.

I guess in a way, the potential redundancy of a low WR is our LTC insurance.

I have priced out LTC insurance and the cost seems much to high in relation to the likely benefits.

 

[dtbach]

We are self insuring for now. If one of us needs nursing home care in our later years, we could handle the cost depending on how long it lasts. The disaster scenario is that we both need nursing home care for many years - which just means that DD and DS would get a much lower or no inheritance.

I guess in a way, the potential redundancy of a low WR is our LTC insurance.

I have priced out LTC insurance and the cost seems much to high in relation to the likely benefits.

That's pretty much the take I have on LTC.

 

[rodi]

Our long term care insurance is our home if the nursing home care goes longer than 1 year or is for both of us.

We could pull significant equity out and have the community spouse downsize to a smaller house or condo. Our next door neighbors are in their late 80's and just moved to a nursing home a few weeks ago and their house is under contract. They priced to sell and I suspect there was a bidding war - and the house sales price will be higher than the list price. They can afford to have both of them in a top of the line nursing home for about 5 years on the proceeds of the home sale. I presume they have other assets as well. Given their age and health issues - I suspect they will still have plenty left over to pass on to their kids. Their kids handled everything - including making sure their parents were in a very nice place - obviously they know there's enough money.

That's my plan. Hire in home help (much cheaper than a nursing home) while it's practical - then sell or downsize and use the equity to pay out.

 

[mathjak107]

Our view is that after 20 years of payments that comes to about what just 1 year of a nursing home costs.

for that premium we get:

we don't have a 5 year look back period as all we need is 3 years of insurance coverage and the 5 year look back does not apply.

no shifting of assets needed at all.

most important if Medicaid is needed after the insurance runs out no limit on the stay at home spouses income which typically is low Medicaid limits even if assets are shifted.


lastly we can keep our money fully invested without fear it will be needed and markets down a lot.

to us that premium is a small price to pay

 

[sengsational]

Our view is that after 20 years of payments that comes to about what just 1 year of a nursing home costs.

So how much are the premiums, again? Sorry if I missed that. And this would be for one or two?

What would be the maximum payout on your policy?

 

[Dash man]

Our group policy through my former employer covers us for $490/day each in a nursing home or half that if we need in home care. We've had the policy for 15 years and we currently pay about $3,000/year for both of us at age 58. It pays up to a maximum dollar amount of $960K each. It allows us to increase the amount for inflation if we choose to every three years. We recently took the inflation increase that cost us $386 more, bringing the annual amount up to $3,000. With my MIL recently going into a memory care facility, we've seen the different options out there and are glad we"ll be able to afford a nice place for us if necessary. A few years after we purchased the policies we both developed health conditions that would prevent us from being able to acquire the insurance today, or at least without paying exorbitant rates. We could self insure at this point thanks to some good stock purchases, but this allows us to pass on some money to our kids...unless we spend it all having fun.

 

[mathjak107]

just approved 2 days ago after a 3 month investigation , them sending an examiner to the house and memory testing.

we will be getting the rates in a day or two.

but for 2 adults , I am 62 and wife 64 we are expecting about 6800.00 or so and off that we get a 15% or 20% ny state tax credit and whatever we are over the threshold when combined with other medical we can take as a deduction on the federal.

we took 300 per day inflation adjusted by 5% every year.

 

[pb4uski]

Are there any limits on premium increases? That would be my concern. Another concern would be the financial strength of the insurer (I'm not sure I would accept Genworth).

 

[mathjak107]

no limits , just like any other insurance. but in order to keep a customer base an insurer has to watch the costs.

the original increases were because they had no idea how to price the early policies.

today they have a better handle on things.

like all insurance sold in our state insurers here have to agree to absorb the customer base of any troubled company. many states have the same insurance rules.

AM BEST gives genworth an "A" rating of excellent

 

[imoldernu]

no limits , just like any other insurance. but in order to keep a customer base an insurer has to watch the costs.

the original increases were because they had no idea how to price the early policies.

today they have a better handle on things.

like all insurance sold in our state insurers here have to agree to absorb the customer base of any troubled company. many states have the same insurance rules.

AM BEST gives genworth an "A" rating of excellent

We bought two $100/day policies in 1994 after health scare for DW and me. Since then, the original policy has been transferred to three different companies eventually ending up in a Trust...
SHIP - About SHIP

I figure we've paid in about $45K. The premiums have gone up less than 10% since we purchased. $36K/yr doesn't go too far in covering an $80K/yr cost, but it helps. Wouldn't cancel now.

 

[youbet]

Readers of this thread should bear in mind that mathjak107's LTCI situation is for his state of NY. Through a program called "Partnership," NY is chosing to pass out some benefits relating to the transistion to Medicaid (if required) after insurance benefits are used up. Not all states are doing this. And there is an implication that you must receive your care in NY for these benefits to apply.

The NYS Partnership for Long-Term Care (NYSPLTC) is a unique Department of Health program combining private long-term care insurance and Medicaid Extended Coverage (MEC). Its purpose is to help New Yorkers financially prepare for the possibility of needing nursing home care, home care, or assisted living services someday

http://www.nyspltc.org/

Caveat Emptor. While mathjak107's arguments sound like good points for LTCI in general, in actuality they would apply only to New Yorkers and perhaps folks in other states with similar situations, if there are any.

Do I understand the situation correctly mathjak107?

 

[rodi]

Readers of this thread should bear in mind that mathjak107's LTCI situation is for his state of NY. Through a program called "Partnership," NY is chosing to pass out some benefits relating to the transistion to Medicaid (if required) after insurance benefits are used up. Not all states are doing this. And there is an implication that you must receive your care in NY for these benefits to apply.

Caveat Emptor.

Do I understand the situation correctly mathjak107?

Thanks for explaining this. I was wondering how the spend down, and shared assets requirements for medicaid were "waived" by the LTCI person.

I don't think the medicaid deals work in PA, KY, or CA - the states I've looked at for family reasons.

 

[Live And Learn]

No LTCi for me, which is one of the reasons I will be moving into a CCRC at age 75 or so. The one we are looking out has a buy-in and does not kick you out if your health or financial situation changes. Cost is approx $3k / month per couple for independant living, $5k / month for Assisted Living per couple and $5k / month per person for memory care.

 

[youbet]

We are self insuring for now. If one of us needs nursing home care in our later years, we could handle the cost depending on how long it lasts. The disaster scenario is that we both need nursing home care for many years - which just means that DD and DS would get a much lower or no inheritance.

At 67 years old, we feel like the LTCI train has pulled out of the station for us. If we could qualify for LTCI, premiums would be very high due to both our ages and some minor health issues. Fortunately, like you, we are able to self-insure without any awkward financial strategies that would reduce our current portfolio performance. That is, no need to modify our desired AA to account for potential upcoming LTC costs.

I guess in a way, the potential redundancy of a low WR is our LTC insurance.

+1

I have priced out LTC insurance and the cost seems much to high in relation to the likely benefits.

I have also done this. I asked all three agents about the availability of a less costly "high deductible" type policy and all said nothing was available.


Additionally, the type of care a policy will pay for still seems to be unpredictable and varies from provider to provider. An older (77) work-chum of mine has a Genworth policy he has held for many years. He is on oxygen 24 X 7, has a artificial heart valve and is morbidly obese. He does still drive and seems mentally competent. He lives alone. His doc is concerned that he's living alone but so far Genworth is telling him he does not qualify for any help. That is, he needs to deteriorate further. It seems that the line you need to cross to qualify for help is a bit fuzzy.

 

[youbet]

Me bed-stricken, a nurse, and 6 million dollars. Only one way that story ends.


Sent from my iPhone using Early Retirement Forum

I assume you mean that the "one way" that story ends is that you are glad you're comfortably self-insured for LTC and focus on recovery or at least on being as comfortable as you can until the grim reaper shows up.

If you have an income of over a quarter million dollars (4% of 6 million plus whatever else such as SS, pension, etc.), that would allow you to pay $120k for quality care and leave $130k+ for your spouse (or whomever) to get by on.

Sounds like a plan........

Or, look at it in lump sum terms. You spend one million bux on LTC before you croak. Your estate is still five million.

Not a bad situation. And, BTW, nice job on your wealth accumulation! While "money can't buy ya love," it sure can remove worries about LTC.

 

[meierlde]

At 67 years old, we feel like the LTCI train has pulled out of the station for us. If we could qualify for LTCI, premiums would be very high due to both our ages and some minor health issues. Fortunately, like you, we are able to self-insure without any awkward financial strategies that would reduce our current portfolio performance. That is, no need to modify our desired AA to account for potential upcoming LTC costs.
+1 I have also done this. I asked all three agents about the availability of a less costly "high deductible" type policy and all said nothing was available.


Additionally, the type of care a policy will pay for still seems to be unpredictable and varies from provider to provider. An older (77) work-chum of mine has a Genworth policy he has held for many years. He is on oxygen 24 X 7, has a artificial heart valve and is morbidly obese. He does still drive and seems mentally competent. He lives alone. His doc is concerned that he's living alone but so far Genworth is telling him he does not qualify for any help. That is, he needs to deteriorate further. It seems that the line you need to cross to qualify for help is a bit fuzzy.

In general the critical issue for payment is the so called activities for daily living. Since he is still driving he clearly can get to the toilet and wash himself which are two of the activities (here is the full list:

• Eating
• Bathing
• Dressing
• Toileting
• Transferring
• Maintaining Continence

) and also transfer so it is not likely he would qualify at this point for any policy.

 

[mathjak107]

Readers of this thread should bear in mind that mathjak107's LTCI situation is for his state of NY. Through a program called "Partnership," NY is chosing to pass out some benefits relating to the transistion to Medicaid (if required) after insurance benefits are used up. Not all states are doing this. And there is an implication that you must receive your care in NY for these benefits to apply.



Long Term Care Insurance - New York State Partnership for Long-Term Care

Caveat Emptor. While mathjak107's arguments sound like good points for LTCI in general, in actuality they would apply only to New Yorkers and perhaps folks in other states with similar situations, if there are any.

Do I understand the situation correctly mathjak107?

yes you are correct as each state is going to be different .

however certain things still apply.

as i said folks say we are self insuring ,but to really self insure unless you have a lot of money involves keeping that money safe and a way from potential drops that may make the amount you need unavailable.

that is a very important factor since if you then consider you can invest that money elsewhere all you need to do is spend a little bit of those gains for the premuim then it is really a different story.

by the way the state sponsered plan will still pay the agreed amount out if you move to another state but they have no control over that states look back period or agreement not to take income over the medicaid limit for the stay at home spouse..

according to information i saw on the PA partnership link below states and the federal gov't are working on agreements to reciprocate with each others partnership plans.

"12. If I bought a Partnership Policy in another state, can I get asset protection if I go onto Medical Assistance here in Pennsylvania?
The Partnership is a national effort and states are coordinating their activities as well as working with the federal government to provide for reciprocity standards between states. We expect that most states will agree to these standards, so that if you buy a Partnership Policy in another state, you will be able to get Pennsylvania’s asset protection benefits if you go onto Medical Assistance here. Those reciprocal standards would also apply if you buy a policy here in Pennsylvania and then move to another Partnership state and need long-term care there. Back to Top

 

[mathjak107]

Thanks for explaining this. I was wondering how the spend down, and shared assets requirements for medicaid were "waived" by the LTCI person.

I don't think the medicaid deals work in PA, KY, or CA - the states I've looked at for family reasons.

i don't know about all those states but PA HAS A PARTNERSHIP PLAN.

Health Insurance

 

[imoldernu]

Somehow, when we discuss Long Term Care, the important part about couples and home ownership seems to get confusing.

Sheltering up to $800,000 in home ownership by spending down to allow Medicaid to pay for LTC for a partner, can be important for those with limited assets.

Mathjak107 presents the argument well. This NOLO website is about a 5 minute read, and gives a broad overview of what may and may not be pertinent, according to your own situation. Without considering the "whole", the parts will determine whether or not LTCI would be worthwhile.

http://www.nolo.com/legal-encyclopedia/safe-ways-spend-down-your-assets-qualify-medicaid.html

Just one small part of the article:

First, you should know that some assets do not have to be spent or sold to qualify for Medicaid, so these don't need to be spent down. These non-countable assets include the home, a car, personal effects, household goods and furnishings, some prepaid funeral and burial arrangements, and a limited amount of cash ($3,000 for a couple), to name just a few. But the determination of whether these assets are exempt, and to what extent, is made on a case-by-case basis. Your state’s Medicaid program will take into account individual state laws as well as your marital status, living arrangements, and other factors.

Other headings:
Non-Countable Assets
Permissible Expenses
Legitimate Debt
Purchasing Noncountable Assets
Funeral and Burial Expenses
Caregiver Agreements

Now, here's the rub...
It would be nice to be able to put off the decisions until some form of Long Term Care is on the horizon. Of my own knowledge, in four cases that involved relatives and friends, two worked out well, because of Eldercare legal assistance well in advance of the needs, while the other two led to a relative disaster for the surviving spouse... left with almost nothing after a five year nursing home stay.

Another case here:
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251-2.html#post1498233