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Long term health insurance
Old 02-18-2011, 08:35 PM   #1
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Long term health insurance

I turn 64 very soon. My wife is 62. For the last few years all we discussed is how we will be protected when I retire, yes I am as of today still working but I hope not for long . Health insurance is what I thought was the number one factor. Well today a very good friend of mine told me how much it is costing to keep his parents in a nursing home. $12000 per month. His Dad had saved in the range of $800,000.00. His Dad and Mom are both in the their late 80's. The $12000 per month has been going on for 18 months and the nest-egg is going fast. He then went on to tell me that a couple that also stay in the same nursing home pay almost nothing, because they had saved nothing during their life. Makes me almost want to start hiding my money. Something about all of this is not fair. Oh well, I may be on the next plane to Vegas

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Old 02-18-2011, 09:26 PM   #2
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Under-65 health insurance will end up the same way....the lower class will get a free ride and the middle class will spend a fortune on insurance because they don't get any subsidies, plus pay the taxes to give the massive subsidies to those below 400% of FPL. That's not a political statement, just the facts.

A long term care policy can help pay the expenses of a nursing home stay (or other long term care). There are a lot of threads here on the forum about LTC. Your friend's parents may or may not have wanted to share the $800k with their kids when they passed. However, the cost of LTC looks like it will chip away at a huge chunk of that. Sounds like they would have been the perfect candidates for LTC insurance when it was first introduced. Hindsight is always 20/20 though.

Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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Old 02-18-2011, 09:29 PM   #3
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The folks who saved nothing are doubtless receiving Medicaid and are in a comparable facility. Yup, $12,000/mo for a couple is about what it costs in med-cost metro areas. Under some circumstances a discount is possible if they shared a room but often their needs are such that it is not safe.
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Old 02-19-2011, 08:04 AM   #4
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Originally Posted by dgoldenz View Post
Sounds like they would have been the perfect candidates for LTC insurance when it was first introduced. Hindsight is always 20/20 though.
I agree it is a lot easier to find those perfect candidates after the fact. Usually less clear in the here and now.

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Old 02-19-2011, 09:12 AM   #5
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Both of my parents were in NH... They were of modest means and saved all their lives. They paid for it out of their savings. Mother was only in there for a short time because we decided she would get better care at home by hiring help to come in.

IMO - people should consider the home care option first if they have money. It is lower cost and the care will be far better! $80 to $100k per year can buy a lot of professional help!

DW and I both have LTC because we got a great deal on a group plan from Mega Corp.

Yes... we (tax payers and those who saved) are all paying for the free riders. I have mixed feelings about it. One of the main issues that bothers me is that the surviving spouse is the one that often get's scr3wed if Medicaid is involved. This is a state oriented issue. Some states are absolutely brutal on the spouse.

Everyone that has any assets should have some sort of plan related to LTC. Waiting till financial ruin occurs is a bad idea!

This probably sounds insensitive..... but all the more reason to FIRE at a younger age! Why subsidize the spendthrifts. Part of the exorbitant cost of LTC is the cost shifting due to the free riders.
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Old 02-28-2011, 03:33 AM   #6
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Originally Posted by chinaco View Post

DW and I both have LTC because we got a great deal on a group plan from Mega Corp.
If one has a company sponsored LTC plan, what happens when you retire ?

Does the insurance continues ? What happens to rate ? I'm assuming you have to retire from the company, you cannot resign and go to another job.

Thanks !

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