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Old 03-09-2012, 03:50 PM   #61
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FinBiz,
For reasons you mentioned, I'd be reluctant to lower the inflation increase. Also, when you bought this policy Tennessee wasn't a LTC "Partnership" state, but now it is. If you don't know about this program, you should look into it. (here's some more information) It's a cooperative arrangement between the states and the federal government. Basically, if you buy LTC insurance that meets the criteria of this program, you will be allowed to qualify for Medicaid coverage of LTC once you've spent your resources down to the coverage amount of the LTC policy you purchased (rather than having to spend your assets down to virtually nothing as would normally be required). While most of us don't want to be on Medicaid, this option at least lets you keep some assets. Also, some nursing home facilities that normally charge much more than Medicaid pays will "grandfather" their present patients and allow them to stay under Medicaid if they've previously been admitted under private insurance.
You might want to find out if your present policy qualifies under this partnership program. If it does, it may be important to you to assure the policy continues to meet the Partnership criteria set by Tennessee after you make any adjustments. The states set their own minimum standards for inflation protection, so you might want to be sure you don't inadvertently disqualify yourself if you choose a lower inflation amount.

Sorry about your rate increase. There's a lot of that going on.
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Old 03-09-2012, 03:59 PM   #62
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I just received a notice it was increasing 69.49% or to $612 per quarter ($2448 annual). The options offered are: Keep coverage intact and pay the increased premium, keep the same premium, but lower inflation rider from 5% to 3.2% or “call to discuss lowering the daily benefit, elimination period or benefit period.” Due to the 5% inflation rider, my daily benefit is now $217 or about the cost of nursing homes in my area (middle Tennessee). I really don’t want to reduce the benefit period, but did call JH to get a premium based on 5 years benefits. The price was $1852 annual vs the increased premium of $2400 or the reduced 3.2% inflation offer and keep my current premium intact at $1444 annual.
I assume there will be future increases or trade-off offers. My agent says the lower inflation rider offer is a one-time “landing place” that won’t be offered again. I don’t think 3.2% will keep up with cost of facilities, but sure beats nothing and keeps my premium the same. I could afford to pay the increased premium now, but am apprehensive I might not with future increases/tradoffs and be forced to cut my benefits or even drop it if the premium got too high. Anyone's thoughts are appreciated.
I'm no expert by any means, but do have LTC ins. and have had significant premium increases. Here are my thoughts:

My memory is hazy, but I believe I was told MOST people do not need benefits for longer than 3 years. First reason is that people either get better (they are in a nursing facility because they can not convalesce at home - e.g., stroke - before 3 years they recover enough to go home.) or they die from what put them in the nursing home. Obviously, there is an actuarial element to this. Some folks linger for 20 years and others are in and out within a few weeks. BUT, the bulk use the benefit for 3 or fewer years (IIRC). Check this out yourself!!

Regarding further premium increases. Supposedly, the increases were due to the insurance company miscalculating how many people would lapse their policies (without ever using the benefit). Hopefully, they now have that right. Any other reason to raise a premium SHOULD be cooked in the broth, actuarially. THESE kinds of things, the insurance companies should KNOW to the 3rd decimal point already. SO, in (my) theory, the major increases should be behind us. (Here's hoping.) Maybe your rep will share her thoughts on this - sometimes the true info leaks to the reps.

The LAST thing I would sacrifice would be the inflation rider. Even 5% is not currently keeping up with LTC inflation. If you can, look at the costs of the LTC facility you are familiar with and see if they have increased their rates at 5% or MORE in the last several years. You might have to play dumb with them to get this info (just planning for LTC insurance, you see - which is true.)

Finally, the big question is whether you have the assets to go naked or whether it makes sense to have LTC insurance. One strategy might be to drop your coverage to 2 years (or even one if they will allow it). This will GET YOU IN THE DOOR of the LTC facility. Once you are there for some period of time, I believe they are required (or at least usually DO) keep you and accept Medicade coverage.

Next to plain old medical insurance, LTC is the wild card that plagues all but the "rich" when it comes to ER (my opinion, of course). WE NEED TO GET THIS RIGHT PERHAPS MORE THAN WHEN TO TAKE SS. Lots of strategies (go naked, limited coverage, full coverage, set aside cash, have an annuity, the 9mm solution, etc. etc.) No one answer.

Keep in mind, you are getting this from a dummy who cares, but isn't an expert. Use lots of grains of salt and DO LOTS OF RESEARCH! Very best of luck.
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Old 03-09-2012, 04:30 PM   #63
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FinBiz, were it me I'd opt for a shorter term of benefits. See chart below from a 2010 study on Length of Stay in Nursing Homes at the End of Life. Looks like three years for a male would be overkill (no pun intended).

Quote:
One out of every four of us will die while residing in a nursing home. For most of us, that stay in a nursing home will be brief, although this may depend upon social and demographic variables like our gender, net worth, and marital status. These are the conclusions of an important new study published in JAGS by Kelly and colleagues (many of whom are geripal contributors, including Alex Smith and Ken Covinsky).

The study authors used data from the Health and Retirement Study (HRS) to describe the lengths of stay of older adults who resided in nursing homes at the end of life. What they found was that out of the 8,433 study participants who died between 1992 and 2006, 27.3% of resided in a nursing home prior to their death. Most of these patients (70%) actually died in the nursing home without being transferred to another setting like a hospital.

The length of stay data were striking:

  • the median length of stay in a nursing home before death was 5 months
  • the average length of stay was longer at 14 months due to a small number of study participants who had very long lengths of stay
  • 65% died within 1 year of nursing home admission
  • 53% died within 6 months of nursing home admission


The authors also found that length of stay varied based on a number of demographic, social, and clinical factors. For instance:

  • men died sooner after admission than women (men had a median length of stay of around 3 months versus 8 for women)
  • married nursing home residents died sooner after admission than unmarried participants (an average of 4 months sooner)
  • nursing home residents in the highest quartile of net worth died six months sooner than those in the lowest quartile.
YMMV.
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Old 03-09-2012, 05:00 PM   #64
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I've had a LTCIIP for 10 years. Three years ago there was a rate increase and I opted to take the reduced inflation option (5% to 4%) which kept my premium the same. My expectations are to have this as a supplement should I ever need long term care. If it never gets used then I have basically won the game although spent the $$ to have the coverage.

The policy has a 90 day waiting period, 4% inflation, a daily benefit amount of $189, and a benefit period of 5 years. Premiums are $82/month.
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Old 03-09-2012, 05:08 PM   #65
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FinBiz,
What did the rep say about the impact of increasing the exclusion period, and how much would they allow you to extend it? . . . I'd be interested in what you were told and what you think of this approach.
Spoke with John Hancock rep. They only allow elimination period to be increased from 60 to 90 days and reduce the annual premium by $136. Not much help.
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Old 03-09-2012, 08:52 PM   #66
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It was written for $110 per day, 5% compound.
You don't specifically say, but does that inflation rider compound forever? When my father purchased a similar policy from Time/Fortis in 1992, the inflation rider was only good for 20 years. In other words it only kicks up 5% one more time and then it's done.

I don't know how to evaluate whether you'd want the inflation rider to compound forever or until a certain date. However as REWahoo! has pointed out, you may only want benefits for a few years and you may not need an inflation rider to last forever.
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Old 03-09-2012, 10:12 PM   #67
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You don't specifically say, but does that inflation rider compound forever? When my father purchased a similar policy from Time/Fortis in 1992, the inflation rider was only good for 20 years. In other words it only kicks up 5% one more time and then it's done.

I don't know how to evaluate whether you'd want the inflation rider to compound forever or until a certain date. However as REWahoo! has pointed out, you may only want benefits for a few years and you may not need an inflation rider to last forever.
My policy reads "Lifetime Automatic Benefit Increase Rider (compounded). So, it is forever unless I change it. I agree that as I age the lifetime stuff is not as crucial ...or doesn't seem so. Since I first posted, I asked my agent if she knew when Hancock would let me review this again. She said I could lower benefits anytime. But, she'd also said the offer of lowering the inflation rider from 5% to 3.2% and keeping current premioum was a one time deal. I need to clarify further on Monday, but I'm considering leaving my policy as is for now. Letting the 5% run a while and then perhaps either lowering that or the benefit period to control premium costs later. Just thinking for now ...have a couple weeks yet. But, you guys are right. 5 yrs is probably the most any of us will need.
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Old 03-09-2012, 10:24 PM   #68
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FinBiz, were it me I'd opt for a shorter term of benefits. See chart below from a 2010 study on Length of Stay in Nursing Homes at the End of Life. Looks like three years for a male would be overkill (no pun intended).

YMMV.
I bought the policy when I was younger and probably just got the best available. I did things like that then! Now, I’m taking a reality check. Your information is helpful. I mentioned in another post I'm considering keeping my policy as is now and let the 5% run a while since I understand I can reduce benefits and premium rate at any time (w/ John Hancock). In reality, I have the best benefits ever offered -- or close. If I reduce somewhere, I still have a good policy. I have a little time before deciding and really appreciate the input.
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Old 03-09-2012, 10:33 PM   #69
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But, you guys are right. 5 yrs is probably the most any of us will need.
Of course laws can be changed, but I think 5 years is the present "lookback period" for Medicare asset testing for most states. If I've got that right, you could put your assets into a trust when you check into a nursing home, stay there for 5 years (on your insurance policy), then apply for Medicaid and you'd qualify because you have no assets. I'm not passing any judgement on this from an ethical standpoint, but I believe it is one rational reason to consider 5 years of coverage, especially if you have a spouse. Obviously, check into the laws/policies of your state.
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Old 03-09-2012, 10:39 PM   #70
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FinBiz,
For reasons you mentioned, I'd be reluctant to lower the inflation increase. Also, when you bought this policy Tennessee wasn't a LTC "Partnership" state, but now it is. If you don't know about this program, you should look into it. (here's some more information) It's a cooperative arrangement between the states and the federal government. . . .You might want to find out if your present policy qualifies under this partnership program. If it does, it may be important to you to assure the policy continues to meet the Partnership criteria set by Tennessee after you make any adjustments. The states set their own minimum standards for inflation protection, so you might want to be sure you don't inadvertently disqualify yourself if you choose a lower inflation amount.

Sorry about your rate increase. There's a lot of that going on.
I was not aware of this. Thanks. I hope to never be on medicaid, but having the "Partnership" as a backup is sensible. My policy does qualify in TN. Guidelines indicate an inflation % of any amount at my age ... just so long as there is one. I agree that keeping the 5% inflation rider is beneficial-- at least, for now if I can manage the cost.
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Old 03-09-2012, 10:46 PM   #71
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Of course laws can be changed, but I think 5 years is the present "lookback period" for Medicare asset testing for most states. If I've got that right, you could put your assets into a trust when you check into a nursing home, stay there for 5 years (on your insurance policy), then apply for Medicaid and you'd qualify because you have no assets. I'm not passing any judgement on this from an ethical standpoint, but I believe it is one rational reason to consider 5 years of coverage, especially if you have a spouse. Obviously, check into the laws/policies of your state.
This is not the jackpot that the urban legends would have us believe. I suspect that Medicaid would successfully pierce the trust.

I think it's also unnecessary, especially considering the risks of the state disallowing benefits due to the maneuver. The Medicaid rules would leave his spouse enough assets to maintain her lifestyle, and the heirs would probably want him to have the money available to use for his quality of care.
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Old 03-09-2012, 11:04 PM   #72
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My JH policy is lifetime benefits, 5% compounded inflation, 60 day elimination. My policy is around $1,500 (discounted for paying annually). I have absolutely no intention of reducing anything when the time comes for me to get hit with a premium increase. It's still a lot cheaper than paying assisted living / nursing home expenses.

I know the stats say most people will only need LTC for 3 to 5 years. My family history is a long life with the last several years in some kind of care facility. One of my relatives was in a nursing home for over 10 years with Alzheimers. It's not just age that puts us in an extended care situation. Strokes. Congestive heart failure. Accidents. There are all kinds of medical conditions that can impact every age.

This is insurance. It's all about risk. Would you drop your homeowner's insurance just because you don't think you'll ever have a claim? Maybe it would make more sense to correlate LTC to auto insurance. Would you lower your liabilty coverage on your auto policy to save a few dollars.... and then at some unknown time and place you need that coverage and it's just too late for anything except to regret your earlier decision to lower coverages.

As with all insurance it's about peace of mind. I just paid our Farm and Ranch policy that's a heck of a lot more than my LTC premium. My auto premium went up again. I'm making sure I have all the discounts in place, the policies are rated correctly, and paying annually if there is a discount for doing so. I pay the premiums because not having the coverage is not an option.

Where I'm going with this is insurance is a personal decision. For me, it comes down to this: I would rather have the coverage and not need it than need it and not have it.

I do want to address the post about "partnership" policies. I bought my JH policy before Texas created the partnership so my policy is not eligible for the partnership privileges. I called DOI (Department of Insurance) about a year ago and they have no plans to retro existing policies. At this specific point in time I neither lose nor gain being in their program. Other states may have brought in all policies to their partnership programs.
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Old 03-10-2012, 07:24 AM   #73
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On the issue of length of stay I would ask does your policy also cover Assisted Living. If it does, the length of stay could be considerable longer than nursing home averages. Both my parents are going on five years in AL now.
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Old 03-10-2012, 07:45 AM   #74
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My JH policy is lifetime benefits, 5% compounded inflation, 60 day elimination. My policy is around $1,500 (discounted for paying annually). I have absolutely no intention of reducing anything when the time comes for me to get hit with a premium increase. It's still a lot cheaper than paying assisted living / nursing home expenses.

I know the stats say most people will only need LTC for 3 to 5 years. My family history is a long life with the last several years in some kind of care facility.
Where I'm going with this is insurance is a personal decision. For me, it comes down to this: I would rather have the coverage and not need it than need it and not have it.

.
East Texas. Do you mind sharing your JH policy's currect daily rate and how long you've had it -- as a comparison to my new/proposed $2400 premium (from $1444). Mine is $217. Purchased in 1998. Otherwise, identical to yours. My situation is similar and I'm learning toward your train of thought. My mother died at 95 and was in independant care the last 5 years. Four other siblings of my mom/dad lived into their 90's also). You're right. This is a personal decision. One I will finalize after gathering all information I can. This forum is a great source.
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Old 03-11-2012, 12:47 PM   #75
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I bought the JH policy through USAA (group price) in 2004. I started off a bit low when I got the policy even though the coverage was in line (at that time) for San Antonio. Daily rate for 2012 is $177 ($63,822 annual); will be up to $289 ($103,959 annual) in ten years. It grows 5% a year with a flat premium of $1,514 (until the rate increase finally catches up with me). I got a discount for paying annually.

My policy also covers assisted living and in-home care. I have lifetime coverage as I previously stated.

My spouse has a variation of my LTC he bought as a benefit before retirement. Under that policy, an increase in coverage can be purchased every three years - it comes out to a 16% increase in coverage. There is lifetime coverage; but, with a 90 day elimination (I have a 60 day). That policy was acquired under JH a few years ago and, interestingly enough, qualifies for the Texas partnership program even though the policy was bought long before I got my policy.

If we wind up in Assisted Living, a nursing home, or a memory care facility, we want to be in good facilities with low nurse/patient ratios, above average ratings, and very nice accommodations. That's why we happily pay for LTC insurance. I wouldn't be without it.
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Old 03-11-2012, 01:41 PM   #76
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I don't like this at all. Years ago I bought life insurance when I was healthy. The amount of the insurance and the premiums (while they went up) were guaranteed to never exceed a certain amount. That was the point of buying while healthy and young. Lock in a good rate. It seems that for LTC insurance that is not possible. Not so good.
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Old 03-11-2012, 02:27 PM   #77
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I don't like this at all. Years ago I bought life insurance when I was healthy. The amount of the insurance and the premiums (while they went up) were guaranteed to never exceed a certain amount. That was the point of buying while healthy and young. Lock in a good rate. It seems that for LTC insurance that is not possible. Not so good.
I think if you go back and read a LTC contract you'll find something similar to this statement: "Your rates cannot be increased due to your increasing age or declining health; but, your rates may go up based on the experience of all policyholders with a policy similar to yours."

Same thing with auto and homeowner insurance. It's the overall risk of the pool that influences rates.
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Old 03-11-2012, 03:10 PM   #78
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I would like to waive a caution flag about the length of time men live in care facilities. Married men usually have younger wives who care for them for an extended time before their moving to a care facility. The three months, average, discussed in the statistics would not include that period of incapacity.

It is true that many men similarly care for their wives but more often they don't because they are frail and unable or they have passed.

My father was 9 years older than my mother and he felt it was her DUTY to care for him notwithstanding the fact that she had Parkinson's. The tried for a couple months and said, that is all I can do. She moved him to a care facility from which he fled on one occassion.
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Old 03-11-2012, 09:14 PM   #79
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She moved him to a care facility from which he fled on one occassion.
My brother and I have had serious discussions about getting Dad a pair of GPS-equipped shoes or a GPS bracelet/necklace. So far, though, Dad feels much more comfortable within the facility than without.
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Old 03-11-2012, 10:30 PM   #80
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If we wind up in Assisted Living, a nursing home, or a memory care facility.......

Does your policy cover "assisted living?"

I had a recent experience with an aunt who could no longer live alone. With no one to look out for her, she'd forget meds, leave the kettle on the stove until it was dry, ignore bills, etc. She had plenty of money so she moved, at the suggestion of and with the help of a neice, into a nice assisted living facility. There she ate meals in a dining room, had folks to clean her apartment, do laundry, take her to doc appointments and check on her multiple times per day. It seemed to work out well but was not covered by her long term care policy. When her niece investigated, she found out that had our aunt been penniless, Medicaid would not have paid for it either.

Can anyone comment? Where does the line between "nursing home" and "assisted living" get drawn and how do LTC policies fit into assisted living needs?
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