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Re: Long Term Health Care
Old 03-03-2007, 01:12 PM   #41
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Re: Long Term Health Care

I'll join in with an update on my in-laws. FIL (Alzheimer's) is in assisted living. MIL is in skilled nursing. Their combined annual income (pensions +SS) is around $45K. That covers my FIL with a little left over. My MIL requires about $60K/yr from their savings. The financial question is how long will she live and how soon will my FIL move into Memory Care and then die.

My MIL will be coming up on two years in skilled nursing this June. She has a broken hip,Parkinsons' and more crap than you'd let a dog live with. She's still going strong despite losing weight and being in constant pain. She's prone to infections which will probably be her cause of death. When she dies, their income will only drop be her SS -- $8K (half of his).

My FIL may outlive me but I expect him to be in the Memory Care Unit within two years based on his rate of memory loss. His current assisted living would not be paid for by some policies but everyone I've heard of would cover the Memory Care Unit. His death would cut the total income to about $26K based on how the survivor benefits are set up. That's not as likely but possible.

Why all the details? Well, it shows that a "normal" couple can both be in a pretty nice place for about $150K/yr. A FIRE portfolio of $1MM should be able to be self-annuitized to cover this for 8 years or more (4%). Most people won't live that long and most insurance won't cover anywhere near that length of time. Pensions and SS lengthen this time. If I put in their SS but no pension, it stretches to about 10 years. If we were only talking about one of them, the number of years would go up even farther. They didn't plan very well for there present state but they fortunately have enough assets for about another decade for both of them.

I'm in the self-insured camp. My father paid for LTC for decades and got regular rate increases as he aged. He died peacefully in his townhome without ever seeing the inside of a LTC facility.
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Re: Long Term Health Care
Old 03-03-2007, 06:23 PM   #42
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Re: Long Term Health Care

Something else to think about....part of the reason HSAs were invented was to help younger people plan for long term care by saving tax-free dollars, so that they will have money available in their senior years when it is most needed that they can use for medical expenses on a tax-free basis. I know many of you were older when HSAs first came out, but for younger people, HSAs might hold some promise as a savings mechanism to save for long term care.
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Re: Long Term Health Care
Old 03-03-2007, 06:59 PM   #43
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Re: Long Term Health Care

My parents purchased a "nursing home" policy many, many years ago. It paid out only for nursing home care. The policy was purchased by a division of GE. Although the policy was narrow (the only type available at the time) when they met the criteria in the policy there was no hassle. Mom exhausted her benefits and has been in a nursing home for 6 years. Still chugging along.
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Re: Long Term Health Care
Old 03-04-2007, 03:20 AM   #44
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Re: Long Term Health Care

Here is another data point. My MIL paid $11k in total LTC premiums over a period of ~14 years. I think it was a middle of the road policy. She was a lifelong heavy smoker. She spent a year in assisted living (don't remember the level) and just 2 months in a nursing home before passing on. DW received $35k in benefits paid out within about 8 months. No real resistance from the insurer other than loosing paperwork all the time and constantly assigning different people to the handle the claim.

I just find it hard to imagine how insurers can spread the risk on these types of policies in order to make money. Maybe that's the reason rates are increasing so rapidly and few insurers are in this market.
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Re: Long Term Health Care
Old 03-04-2007, 05:59 AM   #45
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Re: Long Term Health Care

We purchased LTC through DW company as a benefit. It is convertable when she retires or leaves the company.

You are correct... There are few guarantees that the insurance company will stay in the LTC game for 40 years or longer. This is a big problem for those of us trying to protect assets if something catastophic occurs.

I am viewing LTC right now as protection against some sort of health problem in the early years. Late in life, I am OK if Medicaid picks up the tab (we intend to spend most of our money early in ER). The rules for Medicaid vary from state to state so you need to study and monitor changes. Bottom line, most nursing homes are about the same (if you pull out the outliers... real problems) no matter who pays the bill. Even if you pay for it the first few years, when you run out of money they can kick you out. There are rules where they are not supposed to be able to do that, but the NH has techniques. The ones that want private money limit the number of Medicaid and Medicare certified beds (they can shift the number of beds). If you run out of money and they do not have a Medicaid bed... adios. This is a strategy that is used to maximize profits. The higher end NH do not want beds to go empty (lose $), but they do not want a bunch of low paying medicaid people either. Therefore, they use Medicaid patients as backfill and keep the number of beds low.


My point of view: All bets are off when you get very old and ill. Unless you are wealthy and can afford a private nurse, the NH is a likely stop.

Fortunately, states are getting on the bandwagon to pay for assisted living for elderly as an alternative to a NH because it is less expensive.

Few of us are very wealthy... You should consider how you will handle LTC... and Medicaid is a viable option. You just need to understand how you shield the surviving spouse... The rules are different from state to state.


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Re: Long Term Health Care
Old 03-07-2007, 06:24 PM   #46
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Re: Long Term Health Care

Quote:
Originally Posted by Rich_in_Tampa
There are exceptions, but the vast, vast majority are over 70 and many are over 80. The exceptions don't prove the rule.
This is probably the most revealing article that I've read on a person's odds of needing LTHC. It is from a well known journal for financial planners and seems to debunk some of the concepts about what portions of the populations are most likely to end up in nursing homes and for how long. I've printed it out and shared with a number of friends that have mentioned it in discussion. http://www.fpanet.org/journal/articl...p0904-art8.cfm
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Re: Long Term Health Care
Old 03-07-2007, 09:09 PM   #47
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Re: Long Term Health Care

I recall reading this article several years ago. Note the discussion about the population needing nursing home care. Patients who were residents in a nursing home in years past are in assisted living/alzheimer's/dementia facilities today. Different licensure.
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Re: Long Term Health Care
Old 03-09-2007, 09:08 AM   #48
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Re: Long Term Health Care

From the article: "The new drugs kept people alive, but often in physical circumstances that did not permit them to live independently."

It seems that this entire LTC situation is based upon everyone simply agreeing that we are obligated to accept being warehoused, at incredibly high cost, as quality of life drops toward zero.

Fortunately, old age, with its incapacitations, is voluntary. That is, unless you become imprisoned in a Shivo or Christopher Reeves situation, and living wills can address this unfortunate possibility.

Aside from that, the biggest fear I have is losing my awareness of when it is time to depart.

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Re: Long Term Health Care
Old 03-10-2007, 04:05 PM   #49
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Re: Long Term Health Care

It seems to me LTC insurance is more for the young than the old. In my case if I had a debilitating accident or illness now (at 54) my FI plan is insufficent to self-insure, and LTC would quickly deplete my half of it. On the other hand when I'm 90, I would expect that my assets (assuming I haven't withdrawn too much over the years) would be more than adequate to self-insure for my remaining years. I would rather buy LTC insurance now and in 20 years drop it when I decide I'm old enough/have enough assets to self insure...and the cost is relatively cheaper now than waiting 10 years.

Any thoughts?
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Re: Long Term Health Care
Old 03-10-2007, 05:03 PM   #50
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Re: Long Term Health Care

Quote:
Originally Posted by mrbill
It seems to me LTC insurance is more for the young than the old.
Actually, I view it as more for the middle aged. Odds are you won't need it when you are young and when you are long in the tooth, you are hopefully in a position to self-insure as you point out. But in between those to ages you are vulnerable because your odds of needing LTC have increased (still pretty low) and you and/or your spouse could be in a world of financial hurt if you aren't able to self-insure.

We bought LTC policies at age 52 with a 10 year guarantee of premium. When that guarantee expires, depending on the increase in premium (I anticipate big $), we may drop coverage entirely, or keep coverage on DW only.

Although I didn't view it this way when we purchased it, I've come to view it like term life - to bridge a gap and provide income/coverage when we are most financially vulnerable.

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Re: Long Term Health Care
Old 03-18-2007, 10:48 AM   #51
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Re: Long Term Health Care

I was looking into it at length and stopped short after reading the discussions on the various threads.

A friend at age 60 did a 3 year program under the NY Partnership. What he was really after was the opportunity to have his assets reorganized during the 3 years of care. In the NY Partnership, your assets are safe from seizure after the 3 years, but your income and family income can be used to offset medicaid benefits. So the idea is to have the well spouse do careful transfers and planning during the 3 years to minimze income once the benefits run out. Presumably then there is less income to seize and the assets are safe per the terms of the Partnership. At least that is the idea.

Is anyone aware of this strategy using a "partnership" plan. I believe a number of the states have them.
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Re: Long Term Health Care
Old 03-18-2007, 04:21 PM   #52
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Re: Long Term Health Care

Quote:
Originally Posted by ZMAN
your assets are safe from seizure after the 3 years, but your income and family income can be used to offset medicaid benefits. So the idea is to have the well spouse do careful transfers and planning during the 3 years to minimze income once the benefits run out. Presumably then there is less income to seize and the assets are safe per the terms of the Partnership.
I don't have the answer to your question regarding how this Partnership plan works. But I have another question you should carefully consider in your planning. Do you want you or DW to be in a facility that accepts medicaid? I'm sure it varies from state to state, but in Illinois it is becoming more and more problamatic to place and keep loved ones in quality situations if medicaid is the primary payer.

I know someone will reply with an anecdotal example of a relative being placed in a high tier situation all paid for by medicaid. I'm sure it's possible. But our preliminary research in preparation for DW's very broke mother's future needs, we're finding that in Illinois it's very difficult to be picky about location and quality if your relative is going to be on medicaid.

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