Making the jump. Buying LTCI

[pb4uski]

Quote:

Originally Posted by marko It's not called a "Common-wealth" for nothing!

Touche!!!

[Mulligan]

Quote:

Originally Posted by Bestwifeever You probably should start hiding it now then. The lookback period is getting longer and longer so good luck with that.

I for one, am certainly in favor of this. But I wonder, is it very hard to catch people who hide the money, especially through cash withdrawals, or do they just focus on the big asset transfers?

[East Texas]

Quote:

Originally Posted by Nords I'm not an expert on long-term care insurance, but John Hancock has made me an expert on their customer "service" department. For the sake of your loved ones who have to file your claim, please use a company with a better claims process than this: Geriatric financial management update

Thanks for including the link. My doctor's offices have had to go to electronic billing and communication with the health insurance offices. I wonder if LTC also falls into the mandatory electronic processes. I hope so. JH has a crappy website and you can't even make a payment online. I'm hoping by the time we need LTC these processes will be improved. I did appreciate your references to USAA claims processes - and yes - JH could learn a lot from them.

On a separate note, there are references in this thread about having (or not needing) LTC to preserve assets. We have LTC because we want to choose our assisted living / nursing home facilities using nurse/patient ratio, quality of care, quality of accommodations, etc. and not have to go to the place with the lowest price for care. Our LTC policy will allow us to have in-home skilled nursing as well as reasonable physical accommodations to the buildings. It's just another way to view LTC.

[Nords]

Quote:

Originally Posted by marko Are there any studies of how LONG a person spends in LTC? My experience is that average LTC (after at-home healthcare) is a few months, max. People hear a 'weekly' nursing home rate and automatically multiply it by 52 weeks; it might not be the norm. Just guessing.

You're trying to apply statistics to a personal situation. One is not necessarily relevant to the other. For example, we've all heard of people who spiraled down in a care facility within a couple months. My father's been in one for over 18 months and looks pretty healthy by comparison. His father spent 14 years in one. So... which situation applies to you? This is the long-term care version of the SWR and longevity debates.

A good long-term care facility in Denver costs $214/day for a semi-private room and $231/day for a private room. (From the care facility's perspective, a private room hurts their profits.) Dad's monthly invoices are literally calculated by the daily charge. That's just one data point, and from what I can see of their finances they're struggling.

Quote:

Originally Posted by MichaelB After dealing with close relatives who spent their last months in nursing homes under both Medicare and Medicaid, and others that lived in private assisted living facilities, I can't believe people would willingly choose the "Medicaid options" if they could afford private care. The differences in support, care, lifestyle and quality of life in general are just too great.

Quote:

Originally Posted by marko I'm not sure how its done in other states, but here in Mass, there is quite an industry built on 'asset hiding'...they advertise on TV and radio non stop. In the case of my grandad, the administrators of the nursing home couldn't believe he was paying his own way...in 20 years, they never had anyone not on Medicaid, ever (and most people there were far from 'poor') I agree that its not the best way to go but it seems to be the 'best' way to go around here.

Quote:

Originally Posted by marko This is an eye opener. What I'm learning here is that in other parts of the country, those who pay for LTC get better care than those on Medicaid. My experience locally is that virtually no one pays for their own care and rich and poor sit side by side with equal care. I might have to move to another state or at least do so when LTC time comes.

Marko, I think you're seeing very green grass on the other side of that fence.

I think the "hide your assets from Medicaid" ads are at least as likely to succeed as the ones for "cheap Viagra online!" and "enlarge your manhood!" I don't see how we'd be able to get any data on the success rate of any of those industries. It's also pretty easy to find plenty of court cases where the family was busted for Medicaid fraud, but nobody pays to put those ads on the media.

Here's some other considerations:
- If your loved one gets taken to a hospital, the care facility is required to hold the room for a couple weeks. When your loved one reaches their 15th day in the hospital, which patient do you think will be welcomed back-- the Medicaid one or a private-pay patient on a waiting list?
- If your loved one exhibits behavioral problems (physical assault, aggressiveness) the care facility can discharge them. I'm not sure how this process works, but I'm pretty sure that you don't want to have to learn how it works either.
- I don't think Medicaid covers haircuts, snacks, newspaper/magazine subscriptions, and other amenities that my father enjoys.
- Which care facility offers better resources, as validated by the (infrequent) inspections? One with a high percentage of Medicaid patients, or one that has private-pay revenue to hire qualified staff and keep them trained? The nurse on my Dad's wing has been in the business for 20 years and it's clear that he gets a tremendous shot of fulfillment from taking care of his patients.

Our different perspectives of the system are influenced by our personal experiences and by the media. But most of all they're influenced by the lack of quality data.

[East Texas]

Quote:

Originally Posted by Nords I think the "hide your assets from Medicaid" ads are at least as likely to succeed as the ones for "cheap Viagra online!" and "enlarge your manhood!" I don't see how we'd be able to get any data on the success rate of any of those industries. It's also pretty easy to find plenty of court cases where the family was busted for Medicaid fraud, but nobody pays to put those ads on the media.

Astute observations, Nords. One other factor on the "hiding of assets" is the cost of care is shifted to taxpayers. I don't mind paying my fair share; however, I do mind paying for someone who's gaming the system.

The person's assets - the one who needs supervised care - are for THEM, not for other family members to lie in wait so they can get some "free" money.

Ethics should not be just some obscure word in the dictionary.....

[Nords]

Quote:

Originally Posted by East Texas One other factor on the "hiding of assets" is the cost of care is shifted to taxpayers.

I wonder how often it really happens.

"Here, kids, take my assets and then use them to pay for my care facility expenses in at least five years!" Good luck with that.

[Corporateburnout]

Not sure if this was discussed before but as states face more financial difficulties the filial support laws are being enforced.

New Financial Burden For Boomers: Forced To Pay Parents' Long-Term-Care Costs - Forbes

[MichaelB]

Quote:

Originally Posted by Corporateburnout Not sure if this was discussed before but as states face more financial difficulties the filial support laws are being enforced. New Financial Burden For Boomers: Forced To Pay Parents' Long-Term-Care Costs - Forbes

Here's a thread discussing that http://www.early-retirement.org/foru...ill-61903.html

[meierlde]

Quote:

Originally Posted by imoldernu Mulligan said: You are fortunate to have a $50,000 nursing home available... One interesting quote from the website cited in the above post.

It is interesting how nursing home costs vary around the country, move from the coasts to the central part of the country away from the big cities and costs go down, in addition costs in the south go down.

[JakeBrake]

Quote:

Originally Posted by pb4uski It is different around here. I have two great aunts in the same nursing home a few doors down the hall from each other. One is on Medicaid, the other is private pay. No difference in care that I have seen (which BTW is good in both cases), but the nursing home received almost double what they receive from Medicaid for private pay patients.

+1
From what I've seen, most of the amenities in the high-dollar places are for the benefit of the visitors rather than the patients.

All any place can do is keep the patient clean, fed, and as comfortable as possible.

[imoldernu]

Something to remember...
The person who takes out the policy is not commonly doing so for his/her own benefit, but for that of others. We did so, so that whoever survived would not be left penniless.
.................................................. .......
As to the cost of nursing home care. I believe that in coming years, there will be a great change in the eldercare industry, with a turning away from large nursing homes, to smaller care facilities, including private homes, with graded care levels.

The nursing home within our community (homes/apartments/ assisted living/rehab center/nursing home/ Alzheimer unit... has many patients who would do well with moderate care... food, meds, safety oversight etc. with actual patient care requiring an aide or a nurse, at a minimum. In most cases they are there because they have no where else to go.
Government regulations are extremely requiring and consequently expensive. DW worked in nursing home for many years, and spent more than a third of the time filling out paperwork to satisfy inspectors. Litigiousness is is no small part of the cost.

Mentioned in an earlier post, was the part about cost to satisfy the relatives and visitors... Very true.

Home healthcare is on the rise, with local businesses growing in leaps and bounds. In our small town there are now 7 such businesses. Some of the older LTC policies (such as ours) originally had severe limits on this... (later corrected), but others, unfortunately did not have this alternative option, forcing patients out of their homes. The insurance companies counted on them wanting to live out their lives at home, which would reduce the company expenses.

[obgyn65]

Since I am the OP, I can confirm this is not my case. I have no children and no wife - but I like the peace of mind of buying an LTCi.

Quote:

Originally Posted by imoldernu Something to remember... The person who takes out the policy is not commonly doing so for his/her own benefit, but for that of others. We did so, so that whoever survived would not be left penniless.

[youbet]

Quote:

Originally Posted by obgyn65 Since I am the OP, I can confirm this is not my case. I have no children and no wife - but I like the peace of mind of buying an LTCi.

It's interesting how viewpoints vary on this. Having the ability to self-pay with little risk of impoverishing the survivor is what gives DW and I peace of mind. When we were shopping for LTCI, we felt uneasy since the industry is in such turmoil and it's difficult to feel comfortable that even after you pay in for years the insurance company will be there for you.

Despite that, we were still willing to purchase a low cost "catastrophic" type policy that would begin paying after 3 years just in case one or both of us requires a long, long stay. After an extensive search, we determined the product does not exist.

So, for us, the risk of needing many years of LTC without LTCI is now added to the risk of our FIRE portfolio failing due to investment performance. The odds of either happening are small but real and we accept the scenario as the most comfortable for us. I certainly understand and respect your decision though.

[Mulligan]

Quote:

Originally Posted by youbet It's interesting how viewpoints vary on this. Having the ability to self-pay with little risk of impoverishing the survivor is what gives DW and I peace of mind. When we were shopping for LTCI, we felt uneasy since the industry is in such turmoil and it's difficult to feel comfortable that even after you pay in for years the insurance company will be there for you. Despite that, we were still willing to purchase a low cost "catastrophic" type policy that would begin paying after 3 years just in case one or both of us requires a long, long stay. After an extensive search, we determined the product does not exist. So, the risk of needing many years of LTC is now added to the risk of our FIRE portfolio failing due to investment performance for our retirement years.

I had read that also. I find that rather odd that no company would offer such product since, the odds are in favor of the insurance company not ever having to pay out. Doesn't it seem very strange that a health insurance company would offer a 10k high deductible plan, but a company would not offer in essence a high deductible LTC plan?

[youbet]

Quote:

Originally Posted by Mulligan I had read that also. I find that rather odd that no company would offer such product since, the odds are in favor of the insurance company not ever having to pay out. Doesn't it seem very strange that a health insurance company would offer a 10k high deductible plan, but a company would not offer in essence a high deductible LTC plan?

One of the several agents we were dealing with explained that predicting accurately what percentage of people will need more than 3 years of LTC is more difficult than predicting whether they will need any LTC at all. That would make it hard for the insurance companies to price the policies. He also said he's had very, very few requests for such a product. People seem to be interested in short waiting periods.

But, I agree with you. We were expecting to find policies available at low cost since the chances we'd ever qualify for benefits would be very low. Despite going through multiple agents and making several phone calls, we found nothing. We don't need insurance to cover a few years of LTC. But it would be nice to share the small risk of needing many years of LTC through a low cost, 3 year exclusion period, policy.

Please post if you find anything.

[Nords]

Quote:

Originally Posted by Mulligan I had read that also. I find that rather odd that no company would offer such product since, the odds are in favor of the insurance company not ever having to pay out. Doesn't it seem very strange that a health insurance company would offer a 10k high deductible plan, but a company would not offer in essence a high deductible LTC plan?

I wonder if their research indicates that people who survive a three-year exclusion period will live for over a decade. That might make the premiums even more expensive than the 100-day-exclusion policies.

Even so... 6-12 months seems like a reasonable exclusion period in exchange for lower premiums.

[M Paquette]

Perception is everything.

It looks like some folks are concerned that their self-paid or LTCI funded stays in these facilities might not be getting them any better care than the Medicaid patient in the next bed receives. Long term care facilities should be more sensitive to issues with perceived equity.

I suggest that the perceived equity issue could be addressed simply, at almost no net cost to the facility and with no actual difference in care for patients. This could be done by managing the perceptions of patients and visitors. Medicaid patients would be housed in rooms furnished with basic institutional items, lit with fluorescent light fixtures specially designed to flicker, and painted institutional green with special wall treatments designed to resemble peeling paint. Self-paid or LTCI patients would be housed in rooms with nicer appearing furnishings, and light fixtures and paint treatments designed to give a more modern, "clean" appearance.

Visitors would then see a marked difference between the rooms of Medicaid patients and others, with the implication of better care for non-Medicaid patients, and a sense of superiority for those paying to avoid Medicaid care.

[youbet]

Having spent a little time doing preliminary research for anticipated care needs for DW's 88 year old mom (who will need Medicaid for LTC from the get-go) I can tell you that here in Illinois, there is no confusion between the quality and availability of private pay vs Medicaid LTC. Since all other states are in much better financial shape than Illinois, perhaps it's state specific. But here, when you can't private pay or show them your quality LTCI policy, the better institutions simply put you on a long, long waiting list for their few mandated Medicaid beds. Ugh. One of the suggestions given to us was to keep putting MIL on waiting lists on a rotating basis so that when/if her need for LTC arises, she'll be near the top of one of them.

The payment situation here in Illinois is so bad that even medical bills for retired state employees using state provided med ins don't get paid until they're many months overdue. I suppose not getting paid in a timely manner is considered a negative by NH's when considering Medicaid patients.

[Sun456]

Quote:

Originally Posted by youbet So, for us, the risk of needing many years of LTC without LTCI is now added to the risk of our FIRE portfolio failing due to investment performance. The odds of either happening are small but real and we accept the scenario as the most comfortable for us. I certainly understand and respect your decision though.

This was similar to my worry. I have a modest LTC policy that I bought many years ago through work. I also had no pension. I solved both problems by buying annuities. One of my annuities doubles the payments for needing assistance at home (a Prudential plan that is no longer available). This one plus another one (Aviva) doubles the payment for nursing home care. I also chose two other higher paying annuities so that I maximized the income received while healthy. The end result is I now have a pension that I cannot outlive. It is not COLAd but it does increase if I need care at home and it increases again if I need nursing home care. In addition my LTC will kick in at that point also. With the annuities I probably don't need it but I have a very good price so it would make no sense to drop it. When shopping the annuities I did not view them as an investment product, rather as an insurance product. They have some very interesting options that I had no idea about until I started to plow through the materials.

[youbet]

Quote:

Originally Posted by Sun456 This was similar to my worry. I have a modest LTC policy that I bought many years ago through work. I also had no pension. I solved both problems by buying annuities. One of my annuities doubles the payments for needing assistance at home (a Prudential plan that is no longer available). This one plus another one (Aviva) doubles the payment for nursing home care. I also chose two other higher paying annuities so that I maximized the income received while healthy. The end result is I now have a pension that I cannot outlive. It is not COLAd but it does increase if I need care at home and it increases again if I need nursing home care. In addition my LTC will kick in at that point also. With the annuities I probably don't need it but I have a very good price so it would make no sense to drop it. When shopping the annuities I did not view them as an investment product, rather as an insurance product. They have some very interesting options that I had no idea about until I started to plow through the materials.

Where our scenarios differ is that I can't get cheap LTCI (quotes are in the $6k+/yr range) and I'm not worried about paying for 2 - 3 years of LTC. I'm worried about the rare circumstance where DW or I need many years of care. That would put the survivor in a position of likely needing to cut the budget at home. We also have some pension income.

I'll look for some info on the type of annuities you mentioned. I'm curious as to how much the annuity payment suffers as a result of having the built in LTCI. That is, what is the hidden cost of the LTCI built into the annuity? I'm sure they aren't giving it away but, who knows, perhaps it's a great deal.

On the annuity/LTCI policies you have, does the increased annuity payment during LTC go on indefinitely or is it time limited? That is, if you went into LTC for 15 years, would it pay all that time or is it perhaps limited to the first 3 - 5 years?

The risk I want to insure against is that of needing a lengthly LTC stay. A policy that only covers 3 - 5 years wouldn't do it.