More on long term care insurance....

[samclem]

Some states also give a tax deduction/credit for a portion of LTCI premiums (Ohio does, anyway).

For reasons noted above (esp the unstated but hopefully true prospect that that Uncle Sam would do something if the insurers defaulted/quit writing coverage, etc) the federal LTCI program is attractive. Unfortunately, they only write policies on individuals. What we need (as a couple) is coverage for only one of us.

Possibilities:
1) Both in nursing home: My pension continues, we get money from sale of home plus everything else, and we have the use of our portfolio. There's enough there to cover nursing home and a few other costs for both of us--we can self-insure for this.
2) One dead, one in nursing home: Pension amount might be same as now or cut by approx 35% (depending on who is deceased), plus proceeds from sale of home and value of portfolio. It would be possible to cover the nursing home either way--we can self-insure for this eventuality.
3) One alive "on the outside", one in the nursing home: This is the costliest situation. Pension stays at present level, living costs for the person on the outside wouldn't be much less than if there were two people in the house, and the portfolio has to support one person in the nursing home and one on the outside. We can't comfortably self-insure for this eventuality.

I wish the FLTCI program would allow us to insure only for situation #3, as the premiums would be a lot more affordable than two individual policies. I think I can get this insurance outside of the FLTCI umbrella-- but then I'll be giving up the security offered by that program.

[ChrisC]

Originally Posted by samclem

Some states also give a tax deduction/credit for a portion of LTCI premiums (Ohio does, anyway).

For reasons noted above (esp the unstated but hopefully true prospect that that Uncle Sam would do something if the insurers defaulted/quit writing coverage, etc) the federal LTCI program is attractive. Unfortunately, they only write policies on individuals. What we need (as a couple) is coverage for only one of us.

Possibilities:
1) Both in nursing home: My pension continues, we get money from sale of home plus everything else, and we have the use of our portfolio. There's enough there to cover nursing home and a few other costs for both of us--we can self-insure for this.
2) One dead, one in nursing home: Pension amount might be same as now or cut by approx 35% (depending on who is deceased), plus proceeds from sale of home and value of portfolio. It would be possible to cover the nursing home either way--we can self-insure for this eventuality.
3) One alive "on the outside", one in the nursing home: This is the costliest situation. Pension stays at present level, living costs for the person on the outside wouldn't be much less than if there were two people in the house, and the portfolio has to support one person in the nursing home and one on the outside. We can't comfortably self-insure for this eventuality.

I wish the FLTCI program would allow us to insure only for situation #3, as the premiums would be a lot more affordable than two individual policies. I think I can get this insurance outside of the FLTCI umbrella-- but then I'll be giving up the security offered by that program.

Why is situation 3 costlier than situation 1? In either case, the house is available for paying long term health care expenses. In situation 3, you should be able to monetize the house by a reverse mortgage and the financial exposure for the "inside" spouse is limited to her share (if jointly owned) of the house and her share of the portfolio (and her own IRA and 401K). Also, most people will run out of money if the long term care is very long and Medicaid does pick up the tab afterwards. If you privately pay long term care for X years at a facility and then Medicaid takes over, the care doesn't really change.

It seems to me that if you can insure one only, then insuring one is better than insuring none. I'd probably pick the last one who might be standing.

[Jeb-NY]

What level of insurance are people getting?

I have looked at getting LTC for at least 10 years and probably should talk to a salesman. The numbers I have seen in ads and articles usually talk about $100-$150/day, well that is only $35K-$55K/year, and they normally have a 3 year limit on coverage. For that level of coverage I can self insure. The problem is I keep hearing about local nursing homes charging $300-$400/day, I could probably still self insure for a few years with out to many problems but I have had two grandparents, one from each side, that spent close to 10 years each in a nursing home.

I would really like a policy that takes over after 6 months or even a year and then pays till death. I can self insure for the short term it is the long term I'm afraid of.

Jeb

[ChrisC]

Originally Posted by Jeb-NY

What level of insurance are people getting?

I have looked at getting LTC for at least 10 years and probably should talk to a salesman. The numbers I have seen in ads and articles usually talk about $100-$150/day, well that is only $35K-$55K/year, and they normally have a 3 year limit on coverage. For that level of coverage I can self insure. The problem is I keep hearing about local nursing homes charging $300-$400/day, I could probably still self insure for a few years with out to many problems but I have had two grandparents, one from each side, that spent close to 10 years each in a nursing home.

I would really like a policy that takes over after 6 months or even a year and then pays till death. I can self insure for the short term it is the long term I'm afraid of.

Jeb

I got enough coverage to take care of our long term health care needs for 5 years, assuming we're living in Virginia or North Carolina which has LTC costs of around 45% of New York's cost of care. My original daily benefit amount of $150, which has now been inflation-adjusted to $191, would cover the most expensive nursing care in our likely retirement destinations.

Your post peaked my interest and I figured that if I needed, at age 54, LTC in New York City, at a daily benefit amount of $300, unlimited years of coverage and an unlimited lifetime benefit, that my monthly cost would be $366.21 under the Federal program. For my limited coverage of 5 years with a daily benefit amount of $191 and a lifetime benefit cap of $348,575.(inflation-adjusted annually), I'm paying $105.73 per month.

I look at LTC coverage as short-term, not long-term coverage. I'm thinking that the chances are that we will need it only for a 2-5 year period if our health goes south, big-time. But if one or both of us winds up in a nursing home on a long-term basis, we should have enough in our portfolio to self insure after the coverage ends and, if we don't, then we'll wind up on Medicaid. I view LTC coverage as health custodian and legacy planning for my family. I don't want my spouse or children to be forced to take care of me if I need long-term care, and if my children take care of us, I want them to get paid for their care, which these plans permit.

[Goonie]

Originally Posted by Jeb-NY

What level of insurance are people getting?

I have looked at getting LTC for at least 10 years and probably should talk to a salesman. The numbers I have seen in ads and articles usually talk about $100-$150/day, well that is only $35K-$55K/year, and they normally have a 3 year limit on coverage. For that level of coverage I can self insure. The problem is I keep hearing about local nursing homes charging $300-$400/day, I could probably still self insure for a few years with out to many problems but I have had two grandparents, one from each side, that spent close to 10 years each in a nursing home.

I would really like a policy that takes over after 6 months or even a year and then pays till death. I can self insure for the short term it is the long term I'm afraid of.

Jeb

The Prudential LTC policy that I have has 10 years of coverage, starting at $150/day plus 5% automatic inflation protection per year (so it's $157.50 this year), 90 day elimination period. It covers nursing home, assisted living center, or home care. For home care it covers professional assistance and/or family member, other relative, or friend. My premium is $184 per month.

The Prudential rep that I dealt with went over a multi-page, 'multiple choice' booklet that let ME tailor the policy coverage to fit MY desires. I had studied up a bit on LTC before I met with him, and I knew pretty much what I wanted. He explained all of the various options to me, one at a time, as we went along. He never said "You might want to increase that amount" or "You might want to add this benefit", etc......there was NO coercion or pressure to get me to buy anything I didn't want. He DID make a few recommendations that would have LOWERED my premiums, but I knew what I wanted, and that's exactly what I got.....nothing more....nothing less.

The nursing homes in my area range from approximately $2900 mo. (<$100/day) to about $5000 mo. (~$167/day). The Assisted Living Centers are about $4300-$5600 mo. (~$144-$187/day). A friend of ours is in one of the best nursing homes in town, recouping from a broken hip/hip replacement, and he said that he's paying $4500/month ($150/day). He said that covers everything including his daily physical therapy sessions.

Everyone has their own opinions, and thoughts about LTC, so it's very much an individual choice. Whether "Yes" or "No" to having LTC.....How much coverage or how little.....How long the coverage should last or how short......How long or short the elimination period should be....etc. My choices may not fit any other person in the universe......BUT they fit ME!

YMMV

[Jeb-NY]

Thanks ChrisC and Goonie, looks like I need to move to a different area before I go to the "Home". I guess I need to talk to a real salesman as much as I hate to, the policy Goonie has sounds closes to what I would buy and if I can get a deal on covering me and DW but only paying for the first one to need it, I might consider it as a backstop.

Jeb