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Old 01-09-2015, 05:57 PM   #81
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I am not sure about Missouri. I think you would have to show me.
Come on down, we'll show you. In respect to assited living and nursing home costs, this state is great for now.

Last century there were some reports of improper care. I believe those issues are fixed.

Three of my former co-workers have lost both their parents in facilities in the last year. All of them thought their parents received great care.
As with everything depends where you reside, facilities.... and.... YMMV.


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Old 01-09-2015, 06:02 PM   #82
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Please. If you delay SS to age 70 that is all the LTC insurance you need in order to never have to eat dog food. Also Medicaid will not take a house away from a spouse until they die.

I get so tired of the "you are going to eat cat food/dog food responses...
+1000
Exactly this.
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Old 01-09-2015, 06:42 PM   #83
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Please. If you delay SS to age 70 that is all the LTC insurance you need in order to never have to eat dog food. Also Medicaid will not take a house away from a spouse until they die.
That is a big part of my LTC plan. Another smaller part is buying a few extra years of service on my pension. Between the two, I think much of my LTC needs will be met. Of course, I also must have good medical insurance.

And, if I don't need LTC, I get to spend the money on fun stuff.

Just my 2 cents. YMMV.
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Old 01-10-2015, 11:16 AM   #84
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I am not sure about Missouri. I think you would have to show me.

Lived here my whole life and never had to shoot an intruder yet! But it is loaded and ready if the opportunity arises... Nursing homes here in outstate MO are plentifully under 50k a year. I'm with you Fermion on LTC insurance. LTC is like auto and home insurance as they are "low probability" occurrences. But auto and home are also "low cost" insurance so I do not mind paying for that security. But like hell am I wasting money on LTC with no guarantee of affordability to pay it when I may need it. Besides I have no intention of ever going there anyways.


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Old 01-10-2015, 11:53 AM   #85
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IMHO, if LTC policies had some type of cap on their premiums they might be more desirable. Under the current situation one can buy the policy in one's 50's, pay the premiums for 30 years, and then be priced out of the market just as the need for the insurance is greatest. Not so good.
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Old 01-10-2015, 11:59 AM   #86
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But auto and home are also "low cost" insurance so I do not mind paying for that security. But like hell am I wasting money on LTC with no guarantee of affordability to pay it when I may need it.
+1

You have hit my #1 problem with the current LTC insurance market.
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Old 01-10-2015, 11:59 AM   #87
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IMHO, if LTC policies had some type of cap on their premiums they might be more desirable. Under the current situation one can buy the policy in one's 50's, pay the premiums for 30 years, and then be priced out of the market just as the need for the insurance is greatest. Not so good.
When my ltc was increased the offered to reduce the benefits to what you were paying, or pay the increase, or just stop paying and get insurance equal to what you have paid. Of course the whole married thing (I have never been) makes one think that divorce and shacking up at 65 might make sense. All you would really loose is the estate tax exemption for passing to the spouse. (The rest could be managed by documents a good lawyer could handle)
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Old 01-10-2015, 12:01 PM   #88
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+1

You have hit my #1 problem with the current LTC insurance market.
+2
Couldn't have said it better.
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Old 01-10-2015, 01:13 PM   #89
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IMHO, if LTC policies had some type of cap on their premiums they might be more desirable.
They all do have some sort of cap: the premiums can't be raised on a single policy, only on the whole class of policies after approval of state regulators. But those regulators have been willing to allow these raises when the insurance companies show they are losing money and threaten to close up shop (at least in that line of business). I don't know how it would be possible to prevent the rates from rising or benefits from being cut in this circumstance (insurance companies mis-estimating lapse rates and faced with low returns on fixed income investments) unless there was some sort of government backup to the guarantees. And that just moves the liability to taxpayers.

Agreed--not a great product as it's currently offered.
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Old 01-10-2015, 01:29 PM   #90
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I've said this before in other polls about long term care... we're self insuring with a specific plan.

We have a paid for home in a very high COLA. The community spouse could downsize to a condo or smaller home and pull out several hundred k$ to cover the expenses. We've seen a couple of neighbors handle it this way... most recently our next door neighbors - they just moved to an assisted living facility together (he has dementia, she has cardiac and ortho issues). They have enough money from the sale of their home to cover 7 or 8 years. Since they are age 88 and 90 - that should cover it. I assume they have savings as well.
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Old 01-10-2015, 03:00 PM   #91
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Some ramblings about our strategy for LTC...

To use convenient figures, I estimate that the LTC lifestyle will run an individual about $100K per year including health insurance deductibles, co-pays (we have a good wrap-around policy). Food and housing costs get absorbed into the facility fees. DW should be able to remain in current house, or maybe purchase a small unit in the LTC community if available.

On the other hand, I have avoided decades of LTC premium costs and the possibility of their rising or the policy disappearing. If we paid in at $4k x 20 years it would have covered almost one year's expenses in saved premiums alone.

We are planning on spending around $100k x 3-4 years if chronic care becomes necessary. Then you die. If you are a long term survivor, for better or worse, the plan continues, though the estate may take a few dents.

We are fortunate to have sufficient assets to make this feasible and are painfully aware that others may have different challenges.

Just sharing some ideas and a sanity check.
PS: These are figures for the $an Franci$co dollars. YMMV.
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Old 01-10-2015, 05:25 PM   #92
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A personal view.
In our 79th year, and with a limited nest egg, some thoughts on the subject.

First... if we had it to do over again, we probably wouldn't have taken insurance, although DW with stroke at age 55, and me with cancer at age 53, it seemed prudent at the time. So, with inflation, $100 then would be $164 today... our policy was for $100/day and no inflation adjustment, so the payment continue to stay near the original rate. . For the 2 of us, our total cost since signing on 20 years ago, is just about $50,000, and the policy payout would be $36K/yr per person.

When we signed on, the cost of a nursing home in our part of FL, was about $55K/year. Now in our CCRC, nursing home cost is about $80K.

Those are the basic real life numbers. How does this fit in with our longer term plans? With one person in the nursing home for three years, it would begin to stress our savings. As mentioned in some prior threads, our back-up plan is owning our home, and being able to have the other spouse live there as Medicaid takes over the nursing home expense.

We are reasonably healthy. Had we been younger, let's say age 60 or 65, and faced with 3 to 5 years in a nursing home (as the case with three of our neighborhood friends in the past 8 years), the situation would have been very, very different. We'll stay with the idea of owning, rather than renting just in case.

Planning for 5 or 10 years is much easier than planning for 30 or 35 years of retirement. Real dollars are much easier to understand than projections.

BTW... our premiums only went up once over 20 years, and by a relatively small amount. That said... the policy went through four different companies over the years, and is now handled by the SHIP ltc trust in Pennsylvania.
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Old 01-10-2015, 08:56 PM   #93
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Interesting article on new LTC study indicating that previous LTC research may have been inaccurate.
Only one out of five men and 1/3 of woman benefit from LTC. Why purchase it?
Fewer Need Long-term Care Insurance | Squared Away Blog
As ClifP mentioned, that study inspired me to write the post about my Dad's experiences.

All of the charts for long-term care are bell curves with fat tails. There is no statistical way to analyze that distribution. (And we saw how well statistics handled the "normalized" investment returns bell curves during the 2008 financial crisis.) Over 10% of the LTC patients are still in care after 10 years-- how can that be?!? The statistics don't apply to the individual.

My Dad's father lived with dementia for nearly 20 years, over 14 of them in a care facility. He died of the flu at age 97. The biggest problems he had were emphysema and dementia. The only reason he died was the flu, and if he'd been in home care then he might even have avoided that.

He had no LTC insurance but he had savings and a decent pension. He was about six months from Medicaid when he died.

My Dad lived alone and fiercely independently with Alzheimer's (in retrospect, quite dangerously) for nearly three years. For at least a year of that he was chronically malnourished. The perforated ulcer was the leverage to get him into a care facility.

Today he's nearly 81 years old and, despite all the physical trauma, extraordinarily healthy. His appetite is back. His blood pressure is under control with Lisinopril, he survived his 2012 chemotherapy for multiple myeloma, he's on a low dose of Lexapro, and he's mobile and articulate. If you met him in a coffee shop, it'd take you 30 minutes of social chitchat to realize that he has dementia. He has certainly used up his quota of luck, but his longevity seems indefinite. He's healthier and happier today than he has been for over a decade. Unless the elder flu or pneumonia get him, or unless Alzheimer's strangles a few critical neurons, he could easily survive for another two decades.

I'm a nuke, so I have a spreadsheet. Even with my ridiculously conservative assumptions, Dad's pension and investment income will pay for at least another decade of care before Medicaid kicks in. Even when his assets are depleted and he "goes on Medicaid", he'll still have about $3600/month of income (in today's dollars) from pension & Social Security.

The only "statistics" which apply to me are my patrilineage and my personal habits. I'm in much better health than Grandpa and Dad, and I'm pretty sure that I can break triple digits. The only question is when my cognition will decline, and it's possible that I'll have that answer in about 25 years. Hopefully later. Or best of all, it never gets a chance to decline.

Today my military pension income is $3566/month. I'll also have Social Security, and with my heritage I'm waiting until age 70 to start it. Who knows-- with telemedicine, self-driving cars, and personal robots then maybe my care expenses will be within my income and I'll never need my assets, let alone Medicaid. As long as the robot can surf, I'll be fine.

If a better policy comes along then I'm willing to reconsider. But first my spouse and I will talk with the claims department and a few of the clients who are getting payouts.

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That said, I have the same brand insurance as Nords dad and it is making me nervous.
You should be. I'd like to tell you that other companies do a better job, but John Hancock is one of the largest (if not the largest) LTC insurance companies. My father bought his policy in 1992 from Time, which later was bought by Hancock. So I suspect they've been rolling up the industry-- losing a little on every transaction but planning to make it up on volume.

The worst part of the process has been the tracking burden. I had to wrestle monthly invoices out of the care facility, get them to John Hancock, wait a month for the paper check (which could get lost in the mail), and make sure it got deposited (again by mail). When I eventually got an iPad to read eBooks, I kicked myself for not starting mobile deposit earlier. Hancock finally shifted to electronic deposits but the paper invoices continued.

And then I discovered that nobody had even been tracking the total payments at Hancock. When Dad bought the policy in late 1992, it included 20 years of 5% inflation adjustments with a cap on the total payout. By conventional math (the kind I like to use) the 20th adjustment would have been in late 2012. Yet in late 2013 Hancock actually applied a 21st inflation adjustment to the payments. (In retrospect, they did not raise the cap by 5%.) The net effect was to make the policy reach its cap a little faster, but it proved to me that nobody at Hancock was watching the books. At one point my spouse and I had a discussion about whether Hancock would just keep paying right through the cap, and how much further would we let them go? We decided that we'd only return the money once they woke up and asked for it. Of course that was before they tried to stiff us for the last $6175 out of a $318K payout. They had no documentation to back up their numbers, and it looked as if they were just makin' stuff up.

It's hard to tell whether Hancock is truly that incompetent, or simply breathtakingly negligent, or merely evil.

If you have a chance to exchange your policy then I'd take it. Maybe you should drop it. Better still, describe the claims process to your prospective caregivers and see whether they want to deal with it. My spouse says she'd rather spend the money on us now (while I'm as cognitive as I'll ever be) instead of trying to get it back from an insurance company later.

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Everything he says is true and if anything, understated IMO. My mother's experience with the same LTC insurance was probably worse, if anything. After years and years of paying through the nose on her premiums, when she was in her mid 90's the time came for her to make a claim. She had a number of very upsetting phone conversations with them. She couldn't get a dime out of them until she had her grandson (a forceful and high powered NYC attorney) contact them. According to him and my brother, the grandson/attorney said the exact same things she had been saying, but they paid attention to him, not her.

She was lucky that she had a grandson in that occupation who was willing to go to bat for her. What good is insurance if you need to hire an expensive attorney as advocate? Pfft. Plus, it didn't really pay that much anyway IIRC.

I'm self insuring and I will be able to come up with more than the total amount the insurance company would promise to pay (which often isn't much). This way I can avoid dealing with CROOKS LTC insurance companies when I am at my weakest and most vulnerable.

YMMV but I just don't personally happen to care for these policies.
I think the worst part was when the insurance company acknowledged that he couldn't live safely on his own, but since he could still handle the six activities of daily living then he wasn't eligible for long-term care. Or maybe the worst part was having to pay nearly $4000 to have a neuropsychologist document a conversation with Dad to validate the claim, when it would've cost less to fly the Hancock claims department out to the coffee shop where they could talk with Dad and see for themselves within the first 30 minutes.

At least the neurospych's assessment was also admissible as evidence in probate court for our guardian & conservator's petitions.

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One of the arguments I read on M* for LTC insurance was how difficult it might be to manage your money and cash flow to pay for your care if self-insured. And all I could think of was that sounded way easier than riding herd on the LTC insurance company to pay claims.
That's pure fear marketing. You have to manage your money and cash flow whether you're self-insured or fully insured. The only difference is that when the claim pays out then (hopefully) you're managing two different streams of money, but you're getting paid the same amount of hourly wage that you were getting for the first stream...

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I am not sure about Missouri. I think you would have to show me.
That humor might have been a little too subtle for some of this group.
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Old 01-10-2015, 09:14 PM   #94
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That humor might have been a little too subtle for some of this group.
Yeah, it seemed to have zoomed right over the head of everyone so I just let it slide.
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Old 01-10-2015, 09:27 PM   #95
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It's hard to tell whether Hancock is truly that incompetent, or simply breathtakingly negligent, or merely evil.

If you have a chance to exchange your policy then I'd take it. Maybe you should drop it. Better still, describe the claims process to your prospective caregivers and see whether they want to deal with it. My spouse says she'd rather spend the money on us now (while I'm as cognitive as I'll ever be) instead of trying to get it back from an insurance company later.
Well, you have me thinking, Nords. Thanks for sharing your experiences.

The lack of acknowledgement about the ADL impairment is eye-opening. My dad had moderate dementia and sounds a lot like your dad. Even though he needed memory care, it sounds like they'd be fighting it if he had the insurance. (He did not.)

For DW and I, the thought was more of us having a stroke or similar in our 60s or 70s. My grand dad was in this situation and it was three years of hell. The idea would be to take pressure off the surviving spouse.

But if it is a fight with the insurance company, is it worth it?

It is going to take some thought and investigation. My big concern is protection for the surviving spouse. DW and I both have good positions in our 401ks. I'm going to start looking into this further with regard to asset protection. In other words, are there other things we can do to protect the surviving spouse. Each of us would also be able to buy care for many years until medicaid kicked in. I don't like the idea of medicaid, but it is there for the most extreme cases anyway.

Maybe off topic: but some think that the Captain and Tennille divorce situation may be a strategy to deal with the Captain's health situation.
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Old 01-10-2015, 11:01 PM   #96
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Yeah, it seemed to have zoomed right over the head of everyone so I just let it slide.

I thought it was good, that is why I responded....but of course I live in the state so I better "get it".


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Old 01-11-2015, 12:04 AM   #97
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Yeah, it seemed to have zoomed right over the head of everyone so I just let it slide.
Got it. It was witty. (Missouri is the "show me" state.)

I can't find the link right now, but there was a paper some think tank wrote railing against all the legal Medicaid loopholes for long term care. It was quite an impressively long list. I think we have enough income to last in all but maybe the extreme cases for LTC, so for the majority of scenarios we can self insure and then after that the healthy spouse, maybe with the adult kids help by then, will have to resort to Medicaid and the list.
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Old 01-11-2015, 12:50 AM   #98
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Everything he says is true and if anything, understated IMO. My mother's experience with the same LTC insurance was probably worse, if anything. After years and years of paying through the nose on her premiums, when she was in her mid 90's the time came for her to make a claim. She had a number of very upsetting phone conversations with them. She couldn't get a dime out of them until she had her grandson (a forceful and high powered NYC attorney) contact them. According to him and my brother, the grandson/attorney said the exact same things she had been saying, but they paid attention to him, not her.

She was lucky that she had a grandson in that occupation who was willing to go to bat for her. What good is insurance if you need to hire an expensive attorney as advocate? Pfft. Plus, it didn't really pay that much anyway IIRC.

I'm self insuring and I will be able to come up with more than the total amount the insurance company would promise to pay (which often isn't much). This way I can avoid dealing with CROOKS LTC insurance companies when I am at my weakest and most vulnerable.


YMMV but I just don't personally happen to care for these policies.
To me one of the most powerful arguments against LTC is their complexity.

It is a similar to one of the problems with the fancy annuities. You may think you understand what you are paying, and you may actually understand it, but when it comes time to collect in 20,30,40 years. It is your word vs the insurance companies. Insurance companies have decades to make stealthy changes to the policy, to perhaps gain favorable interpretations on ambiguous sections from insurance regulators and whole host of legal but generally unethical tricks to reduce your benefits. Or least I am being too cynical
"Never attribute to malice that which is adequately explained by stupidity."

Unless you have somebody anal like Nords with meticulous records, or like your mom's grandson to act as your advocate I think you are likely to be hosed.
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Old 01-11-2015, 01:00 AM   #99
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Buying LTC is water under the bridge for DW and I. We're in our late 60's, have some minor medical issues and would not likely qualify for LTC at premiums we'd be willing to pay.


In retrospect, it seems that the way things have worked out we made the right decision (guess?) for ourselves to not buy LTC years ago when we first considered it.


I estimate that having an LTC policy would benefit our net worth about $200K if one of us is in LTC for a substantial amount of time. I calculated that by estimating we would have purchased a policy with a $300k payout max and we would have paid $100k (actual payments + forgone investment gains on the payment dollars we would have otherwise invested) for the policy. $300k max policy value - $100k policy cost = $200k higher net worth if LTC lasts at least to the max of the policy payout.


As things have worked out for us, would $200k likely mean the difference between the remaining spouse being impoverished or not? Almost certainly not.


Everyone needs to think about what their own situation will be when and if the need arises. Our case is not everyone's case.
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Old 01-11-2015, 01:35 AM   #100
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Some ramblings about our strategy for LTC...

To use convenient figures, I estimate that the LTC lifestyle will run an individual about $100K per year including health insurance deductibles, co-pays (we have a good wrap-around policy). Food and housing costs get absorbed into the facility fees. DW should be able to remain in current house, or maybe purchase a small unit in the LTC community if available.

On the other hand, I have avoided decades of LTC premium costs and the possibility of their rising or the policy disappearing. If we paid in at $4k x 20 years it would have covered almost one year's expenses in saved premiums alone.

We are planning on spending around $100k x 3-4 years if chronic care becomes necessary. Then you die. If you are a long term survivor, for better or worse, the plan continues, though the estate may take a few dents.

We are fortunate to have sufficient assets to make this feasible and are painfully aware that others may have different challenges.

Just sharing some ideas and a sanity check.
PS: These are figures for the $an Franci$co dollars. YMMV.
Makes sense to me Rich. We're following a similar path.


As we've both noted, these are personal decisions based on personal circumstances. Often when making the LTCI decision, folks will have to estimate what their financial and marital situations might be years ahead when/if they need to use the insurance.
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