Long Term Care vs. Assisted Living

[Sheryl]

I've been thinking about this for a while, and would like comments/input/discussion.

I've been starting to look at long term care insurance, but as another thread has pointed out, this industry is in its infancy, quite expensive, and fraught with pitfalls (I just love to say "fraught." What a great word!)

My dad has been doing research about possible facilities should he and his wife need care, and there are more and more places where the range of care is available at a set fee.

He looked at a very nice one where you start with your own condo, move to assisted living then to nursing care if needed. You sign on at a fixed monthly rate - he mentioned $3,000 per month - includes meals - and it never changes. Now that's high "rent" if all you need is the assisted living part, but if/when you go to the nursing wing it seems a pretty good fixed rate. It's a very high-end facility, he has the benefit of picking where he wants to be, not waiting until he's unable and we have to do it for him.

So my thought is that waiting to see if I need that sort of arrangement makes a lot more sense than starting to pay out $100/month or more, on a questionable policy that I might pay for 50 years and never need.

Thoughts?

[charlie]

$3000 per month for a couple in a 2br, 2 bath
retirement community with all meals furnished
is about par for the Dallas area. Some have
the progression to assisted living and full
nursing ........ but none guarantee a "fixed"
$3000 per month for life to my knowledge.

I would definitely read the fine print on that
contract.

Cheers,

Charlie

[JWV]

*You sign on at a fixed monthly rate *- he mentioned $3,000 per month - includes meals - and it never changes. *

Find out exactly what fixed means and get it in writing. My guess would be that it does not include care. If it does that would be an excellent deal.

Judy
(been away for awhile)

[brewer12345]

Sheryl, what you are talking about is self-insuring, especially at a younger age. I think this is probably the best way to go, provided you are actually putting the money away (as most aspiring ERs do).

[Sheryl]

Thanks for the replies - I agree it seems too good to be true, so it probably is... Dad's no dummy so I probably didn't listen closely enough.

Brewer - yes, it is basically self insuring - but I wouldn't go so far as to create a separate "bucket" for the LTC money - just have to realize and account for the fact that the need might be there. By the time I need it there will probably be a whole new set of options, since "assisted living" iteself has only evolved over the last 20 yrs.

[brewer12345]

Sheryl, I wasn't suggesting a separate bucket of money. That's generally not a very efficient approach when you are many years away from the potential need. I agree that options available to the younger crowd are likely to be very different from the current set of choices.

[Brat]

Here is a link to accredited *facilities :http://www.carf.org/consumer.aspx?co...merSearch&id=7 * Select "AS" for continuing care facilities. Were I you I would look for non-profits with a track record. *

My mother's cousin lives at Twin Towers in Cinci- I visited here there and am impressed!!! *Wmt View near Portland, Oregon is excellant. *I have heard good things about the Mennonite facility in Albany and Rogue Valley Manor in Medford- but I have never been on campus.

Although you don't anticipate moving in to assisted living or the care living units review the health department audits by your state of the care facilities.

I hope my husband and I will move into a continuing care facility within the next 10 years. *Our kids have asked that we find one near one of them (if they would only either settle down or live near an afordable town!!). *Their request is based on their desire to see that our needs are met. *

[grumpy]

Both my parents and my wife's parents moved into differernt continuing care facilities with excellent results. My parents had a nice two bedroom apartment. They paid $160,000 up front (non-refunable) and then paid $4200 per month. This covered the apartment, meals, all medications and assisted living in the apartment or full time care in the on-site nursing facility. As my mother's alzheimer's progressed the facility provided an aide to help with tasks in the apartment. When dad became too frail to help with her care, she was moved to the nursing facility where dad could visit her every day with a short walk. After dad's death mom lived in the nursing facility for a year until her death. The care they received was excellent. They moved in at ages 83 and 84 and both died at age 89.

My inlaws moved into a similar facility. In their case they had a 3 bderoom apartment with its own washer/dryer. They paid $183,000 up front and $3200 a month. Their monthly fee did not cover medications but was otherwise similar to my parents'. My mother-in-law had many serious medical problems and got excellent care until her death last year. My father-in-law is still living there and doing quite well at age 82.

My wife and I got LTC insurance at age 50 (now we are 57 and 58 ). Eventually we may drop it and self insure but I wanted coverage, not for old age, but in case I get hit by a truck and survive for many years unable to care for myself. I didn't want to risk wiping out the nest egg that we worked so hard to build.

Grumpy

[Nords]

Grumpy, that sounds like a wonderful deal. The best part is that you didn't have to spend all your time & money watching over everything.

I wanted coverage, not for old age, but in case I get hit by a truck and survive for many years unable to care for myself. *I didn't want to risk wiping out the nest egg that we worked so hard to build.

We carry underinsured/uninsured motorists coverage on our auto policy. Spouse & I are on TRICARE but the UIM/UM should fund our kid's care if the worst happens.

[rapoole]

Assisted Living-

For my dad, $3000 a month for a two bedroom in Central Florida. No upfront payment. Basic room and board is about $2200, remainder is services - assistance with bathing, housekeeping, administering medicines, etc (services are a la carte). His mobility is limited, as is his ability to care for himself. $3000/mo doesn't include pharmacy payments of about $800/month (medicines, equipment, miscellaneous). So, total is about $3800 a month. For that, he is well cared for. It aint cheap. Fortunately, his income and assets appear sufficient to cover.

Spouse and I have LTC coverage, $3000 a month for 5 years, with a 5% /yr escalator. Includes in-home care. Cost for self and spouse, obtained when I was 50 - $162 a month - flat rate - no increase with age.

I consider our LTC well worth the money with the escalator. $3000 a month = 36K/yr = 180k/5yrs, all in today's dollars. Seems likely one of us will use it, particularly with the in-home care option. However, I wouldn't touch it without some kind of escalator, because by the time I may need it the payments would be insignificant. 5% per year may prove insufficient, but I wasn't offered CPI indexing. Has anyone seen that?

Hope that helps.

rapoole

[MJ]

When I turned 56, I also bought a UNUM PROVIDENT LTC policy with 5% compounded increase. Depending on the daily cost of either a nursing home, aasisted living or home care, it could cover me from 3 to 6 years.
Although the annual cost is $1366, after the IRS ($147) & NYS ($310) allowable credit, my final cost $909.

Do other states have decent tax credits as well?

MJ

[Brat]

It is in the interest of States to offer a a tax credit as those who purchase LTC policies are less likely to use Medicaid.

Continuing Care facilities are a different issue than LTC insurance, although some CCFs in effect insure their residents. If anyone is counting on that be sure to check the CCF financials and certifications. Where I see the added value of a CCF is the fact that you can maintain your contacts even when frail and aging. As I watched my family seniors age, each time they needed to move because their capacities changed they lost friends. Spouses were commuting to visit as they also aged. I don't want to go through that!

Don't make the mistake of assuming that a CCF is for the frail, when I visited Twin Towers in Cinci a tour bus pulled up and unloaded residents returning from a tour of New England. That facility offers fitness programs, has an indoor large swimming pool, and a performing arts theater.

[Sheryl]

Thanks for the detailed info, Grumpy, et. al.

I don't think my dad mentioned an upfront payment on the facility he's considering. I'll have to quiz him a little further. They are "not ready yet," just checking into things. I sure appreciate that he's doing it now, not waiting for us to have to deal with it.

What's that bumper sticker, "Be good to your kids, they'll choose your nursing home." Guess he doesn't trust us.

[brewer12345]

When I turned 56, I also bought a UNUM PROVIDENT LTC policy with 5% compounded increase. Depending on the daily cost of either a nursing home, aasisted living or home care, it could cover me from 3 to 6 years.
Although the annual cost is $1366, after the IRS ($147) & NYS ($310) allowable credit, my final cost $909.

Do other states have decent tax credits as well?

MJ

Just be sure you can afford the inevitable increase in rates, since Unum almost certainly will need raise rates considerably.

[MJ]

Just be sure you can afford the inevitable increase in rates, since Unum almost certainly will need raise rates considerably.

Hey Brewer,
Actually, 2 weeks after I signed the contract, they eliminated the indemnity coverage that I got. Their new product for me would have cost $500 more. I am sure they will continue to increase their prices for new LTC customers. My LTC budget has a built in 20% increase every 4 years. Unum has not increased their rates to existing customers for over 7 years. I expect to see an increase in the next 2 to 3 years.

[brewer12345]

Hey Brewer,
Actually, 2 weeks after I signed the contract, they eliminated the indemnity coverage that I got. Their new product for me would have cost $500 more. I am sure they will continue to increase their prices for new LTC customers. My LTC budget has a built in 20% increase every 4 years. Unum has not increased their rates to existing customers for over 7 years. I expect to see an increase in the next 2 to 3 years.

Yeah, within the next two years I would expect a rate increase if I were you. I'd hazard a guess that it will be more like 35 to 50% increase if they can get that past the insurance regulators.

[MRGALT2U]

My wife works in elder care. There was a time when
I thought we might end up providing care for my parents
(me retired.....spouse trained/experienced). My folks
are 87 and 85; no LTC insurance. Lately it's occurred to me that they might outlive us. Now that's a sobering thought.

JG