LTC -- how do you plan on covering this risk?

[mickeyd]

There are probably more Qs here about LTCI that any other subject. It never seems to get old, or does it?

Voted that I will self insure. How? By saving/investing and LBYM.

It's already done.

 

[Jack_Pine]

I am hoping/waiting for a catastrophic policy which I might consider. It would be structured where i have to cover the first 2-3 years and then it would do the next x years. Probably wishful thinking but it would make sense (at least to me).

Also, the policy mentioned which is all paid sounds almost too good to be true, I must be jealous.

 

[mathjak107]

You likely won't see it since few americans who are married and not wealthy enough to fully self insure can afford 3 years of out lay while a spouse at home trys to pay the bills for her lifestyle.

I think most folks with some assets will do what we did , we took only 350 a day when our area calls for 400-500 so we will use our funds to help pay what insurance does not.

What we wouldn't want to do is lay out 3 years of costs since we get medicaid to pay the bills after 3 years as part of our deal.
I think the policy's are figured so that the premiums you pay in before reaching the likely age of needing it come to about 1 years care.

 

[Dawg52]

I had a bare bones policy through my old employer, but it went up quite a bit last year so I dropped it. If married I would have bitten the bullet and kept it as protection for my spouse. But being single Im just going to self insure from this point forward. If I roll though all my assets when in a nursing home and the gov't won't take care of me, just push me into the street. I'd just as soon go that way as dieing in a nursing home anyway.

 

[audreyh1]

We feel that we can carve out at least $400K in today's dollars if needed to cover LTC costs for one spouse without hurting the standard of living of the other spouse that much. The other spouse then has the remaining portfolio if needed to cover their LTC.

If things go longer - well c'est la vie and many LTC policies would have run out anyway, so same boat.

Assisted living helps with a lot of daily tasks, and that means someone doesn't have to move into a skilled nursing facility just because they need some help every day. I don't think LTC policies cover this intermediate step.

 

[mathjak107]

Our policy covers assisted living.

Interesting enough is so far 3 states ,ny,ct and florida have been supporting the right to say no law law with some pretty tough actions.

A spouse has the right to refuse to pay for a spouse in a home and the spouse can not be evicted.
Medicaid has to pay but has a right to sue and recovery.

Well a judge in ct's highest court told medicaid he will not impoversh the people of his state because we have a poor long term care policy in this country.

He ruled medicaid and this woman are to find a comfortable payment arraingement that is affordable and he warned medicaid that he wants to see little change in mrs. Jones lifestyle.

New york and florida courts have adopted this policy.

Our estate attorney who is one of the biggest in nyc said he has zero law suits by medicaid since the ct ruling but he is engaged in loads of medicaid negotiations trying to find suitable payment amounts for his clients.

 

[Live And Learn]

I didn't vote because while I purport to self insure what I am really doing is rolling the dice. I have approximately $120k set aside outside of my portfolio (that is, the 120k is excluded when calculating my WR) earmarked for LTC. That would cover one person for one year (median length of stay in Florida). After that I would be depleting assets at an alarming rate and someday may need to live on 2k / month in SSI (assuming the remaining assets last 18 years until I am 70). Doable but not ideal. My "consolidation prize" would be the fact that I got out of the rat race and had complete freedom to smell the roses for many more years that the average American.

 

[mathjak107]

Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure

 

[bingybear]

You likely won't see it since few americans who are married and not wealthy enough to fully self insure can afford 3 years of out lay while a spouse at home trys to pay the bills for her lifestyle.

I think most folks with some assets will do what we did , we took only 350 a day when our area calls for 400-500 so we will use our funds to help pay what insurance does not.

What we wouldn't want to do is lay out 3 years of costs since we get medicaid to pay the bills after 3 years as part of our deal.
I think the policy's are figured so that the premiums you pay in before reaching the likely age of needing it come to about 1 years care.

So I assume you have a partnership plan with unlimited asset protection, correct? My understanding is that only 2 states offer these plans, thus most people don't have access to them (unless you can by insurance from a different states plan). My present state does not offer them. I am also not sure about the reciprocity with states that don't offer these plans... that is will they honor the unlimited asset protection. I believe the answer to this is no.
This is one of the types of plans I would seriously consider.

 

[DEC-1982]

Do the kids quit one of their j*bs and stay home to care for mom and/or dad on a full time basis?

DW quit her job for a while to take care of her dad till he passed away. I am not saying it was an easy decision. Every family is different, and every culture is different.

The simple truth is LTC insurance is structured in a way as to be unattractive for us.

 

[Jack_Pine]

So I assume you have a partnership plan with unlimited asset protection, correct?
This is one of the types of plans I would seriously consider.

I was wondering the same thing.

 

[mathjak107]

Yes we have both total asset protection as well as unlimited spousal income allowed once extended medicare picks up the tab when the 3 years insurance ends.

At this point medicaid requests that the stay at home spouse contributes 25% of the income towards the spouse's care but it is not mandatory..

Even if it is , keeping 75% of the income over the medicaid typical limits is a great deal.

Compared to the fact even if you shift assets during the 5 years the spouse is still limited to what she or he can get from those assets.

So as you see the 3 years insurance coverage is the tiniest part of the deal. It is all the perks after the insurance is up that is worth paying for

 

[bingybear]

Yes we have both total asset protection as well as unlimited spousal income allowed once extended medicare picks up the tab when the 3 years insurance ends.

At this point medicaid requests that the stay at home spouse contributes 25% of the income towards the spouse's care but it is not mandatory..

Even if it is , keeping 75% of the income over the medicaid typical limits is a great deal.

Compared to the fact even if you shift assets during the 5 years the spouse is still limited to what she or he can get from those assets.

So as you see the 3 years insurance coverage is the tiniest part of the deal. It is all the perks after the insurance is up that is worth paying for

But as I read it, at medicaid qualification and beyond, you would need to stay in the 2 states that offer total asset protection or the benefit drops to $4$. That may not be an issue for you. People living in the other 48 states do not have total asset protection as an option. So most others do not have access to the LTC choice you had... myself included.

If you only had the choice of $4$ protection, would you still find LTC as palatable?

With the financial issues IL is having, I would wonder if they will be able to honor total asset protection in the future.

 

[daylatedollarshort]

Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

We have a conservative portfolio without a lot of ups or downs. We would also eventually sell our house.

Like mickeyd posted, our plan also is to continue a LBYMs lifestyle and keep saving / investing.

 

[Theseus]

Another option when faced with extreme LTC is to just go to Vegas and make one or a couple big bets. If you win, pay for the LTC yourself, if you lose, declare bankruptcy.

Seems about the same gamble as paying $$$ every month for insurance which may or may not even be any good when you need it.

Yeah, IMHO both methods equate to "roll the dice" which was my choice. The only reason I selected that is because after looking into LTC insurance several years ago, I saw the caps/exclusions made it a gamble even with insurance. Self insure? Gamble there too, if it goes on for much more than a year for one of us, the other is stuck between a rock and a hard place. Chances are good in such a situation the home would need to be sold anyway as it would be far too much of a burden to take care of when dealing with severe enough medical issues of the one requiring the LTC.

Several years ago I had discussed LTC with DM, she proffered that the potential need for LTC was actually declining due to pharm advances that make dealing with once debilitating medical issues far less so. I tend to take stock in that thought, as future medical advances can have a huge impact on our future lives. In that scenario, costs are transferred from LTC as we know it today, to a more standard medical expense as we are all well to familiar with. FYI, according to Wikipedia, the probability of rolling two 6-sided dice 25 times gives a probability of 0.505532 that at least once, Boxcars will appear.

 

[Mulligan]

You might find this poll and thread that I started two years ago interesting:

http://www.early-retirement.org/forums/f28/ltc-poll-67962.html

There were over 100 replies to it which really helped to clarify my own thoughts.

We are self insuring. We are really in the sort of in the middle group that I referred to in that thread. That is, enough assets to want to protect them, but not so many that it is easy to self insure. We are in that group of people that is the theoretical market for long term care insurance.

However, the flaws with the insurance product just make it unappealing. A really big factor is that most policies (at this time) cover only a few years of expenses. That is the risk we are able to cover. The bigger risk is someone being in a nursing home for years. That is not very unlikely, but does happen (DH's mother was in a nursing home for about 8 years). However, most current policies won't cover many years of care.

Again, I would like to like long term care insurance, but just find the product flawed.

Kat, your above points is where I keep coming back to. With about a 4% chance of winding up in a home and lasting more than 5 years I am not even going to put another thought into it. Though I do enjoy reading the thread.


Sent from my iPad using Tapatalk

 

[bingybear]

Yeah, IMHO both methods equate to "roll the dice" which was my choice. The only reason I selected that is because after looking into LTC insurance several years ago, I saw the caps/exclusions made it a gamble even with insurance. Self insure? Gamble there too, if it goes on for much more than a year for one of us, the other is stuck between a rock and a hard place. Chances are good in such a situation the home would need to be sold anyway as it would be far too much of a burden to take care of when dealing with severe enough medical issues of the one requiring the LTC.

Several years ago I had discussed LTC with DM, she proffered that the potential need for LTC was actually declining due to pharm advances that make dealing with once debilitating medical issues far less so. I tend to take stock in that thought, as future medical advances can have a huge impact on our future lives. In that scenario, costs are transferred from LTC as we know it today, to a more standard medical expense as we are all well to familiar with. FYI, according to Wikipedia, the probability of rolling two 6-sided dice 25 times gives a probability of 0.505532 that at least once, Boxcars will appear.

While there are some risks with this, a medicaid compatible annuity may help with the funding of the community spouse. Also there have been some legal cases in NY and CT that have sided with not impoverishing the community spouse. These cases may lead to more friendly treatment for the community spouse in the future.
Just some things to consider.

 

[jebmke]

My biggest concern is being mentally or physically incapable of getting to the nembutol.

 

[Danmar]

Yes, have enjoyed this thread. Although the envireonment in Canada is different. My widowed mother turns 90 tomorrow. Has been in an assisted living home for over 2 years and is doing quite well. It is expensive, costing about $100k per year. No gov't assistance at this point but could be some in the future if her health deteriorates. She has enough assets for about 8 more years, ie to 98. This includes the sale of her condo on entering the home. I have promised to support her if she runs out of money.
These late life health expenses/issues really are the elephant in the room for retirees. My DW's parents are both alive and approaching 90 as well. They have plenty of assets to fund any kind of situation, but don't have any type of plan. Seems like they are simply waiting for one to die, then will sell the house and the survivor will relocate to assisted living. Not much of a life in the meantime. Getting really old sucks but I'm not hot on the alternative either.

 

[Danmar]

My biggest concern is being mentally or physically incapable of getting to the nembutol.

Or forgetting I'm supposed to take some.

 

[Theseus]

While there are some risks with this, a medicaid compatible annuity may help with the funding of the community spouse. Also there have been some legal cases in NY and CT that have sided with not impoverishing the community spouse. These cases may lead to more friendly treatment for the community spouse in the future.
Just some things to consider.

Even with "annuity=bad" having been the mantra I've been exposed to for many years (even before frequenting this site), I'd agree this is a scenario where an annuity makes sense as an income preservation tool. As has been offered in previous posts, the individual needing care will be taken care of one way or the other, how the spouse is able to live going forward is the real financial issue.

 

[alistair]

For those of us with ~20+ years (knock on wood) to go before LTC even becomes an issue, I've got one word:

robots

(only half joking)

Might be cheaper than LTC. Need to figure out how to set up the Uber of LTC robots and then I can really FIRE.

 

[mickeyd]

Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure

Interesting points to ponder. No? If I had to go into a LTC situation today and/or if DW had to do the same, all of our assets would be in play to pay as much as it costs since we have no LTCi. Our accumulated assets, as well as all future SS and DB income, would be devoted to LTC.

That's the reality of it I believe.

 

[bingybear]

Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure

I'm not really one that segregates my LTC monies verse everything else. I do have $200k in banks savings and CDs to help buffer the need so withdraw during down markets... not just LTC, but living expenses. For us this would cover more than 3 years that would include health care (insurance + max out of pocket), couple international vacations, and normal living. We obviously could tighten up.
In addition I still have some brokerage $ waiting to be deployed and the rest is in a 63/35 allocation (not counting cash in the allocation.
Just started working on this. I'll sort it out eventually. Lots of time to learn.

 

[ripper1]

We are just into our 60's and have pensions and ss that cover our basic needs and then some. We also have about 450k in retirement and taxable accounts. So I would safely assume that we can self insure.