thoughts on long term care policy

[Corporateburnout]

Quote:

Originally Posted by Katsmeow That seems really expensive. I had thought about looking into it, but we are quite a bit older than that so it would clearly be too expensive at this point if those are typical prices.

Earlier this year we were quoted premiums from 6 companies ranging from $8000/year to $2000 for both of us. We went with MOO policy for 3 years 200/day with a 3% inflation and a premium of $2800 but since DW was denied for medical reasons I lost the spousal discount and ended up paying $1900/year.

BTW I will be 60 in a few months. I hope this helps.

[Brat]

I think that in addition to actuarial issues the fact that interest rates are very low is contributing to the increase in costs. Insurance companies aren't getting much of a return on their customary investments.

[wmc1000]

Here is an article to cover some situations where income exceeds medicaid eligibility - Qualifying for Medicaid with Miller, Pooled or other Income Cap Trusts - Paying For Senior Care

and if only 1 spouse need scare here is some info that might be of use -

Qualifying One Spouse for Medicaid
Often times, one spouse will require care in a residential facility and the other remains healthy and living at home; the spouse living at home is known as the “community spouse”. Their income, if pooled, can disqualify the needy individual for Medicaid. However, it is possible to separate their incomes and allocate proportionally so that the needy individual qualifies for Medicaid and the community spouse maintains enough income to continue living independently. If done incorrectly, the community spouse may not have enough income to live on and the home could be forfeit to the state. For these reasons, it is strongly recommended that couples in this situation consult with Medicaid qualification expert.

[pb4uski]

DW and I are 58 and got quotes recently that were annual premiums of $3,000-$6,000 for a $150/day benefit and policy max of $270k (today's $ and ~ 5 years). Local nursing home private pay rates are ~$280/day so the insurance would only cover a little over half the cost.

At this point I am like a deer in the headlights. The cost seems high in relation to the benefits even before considering the risk of premium hikes so for now I'm self-insuring.

[Purron]

Quote:

Originally Posted by Jack_Pine Ballpark......cost..if you are willing to share? /have they changed over the years?

We pay $351/month for a "cadillac" policy for both of us purchased through the Federal Employees LTC Insurance program when it was first offered. It's gone up about $70/month since we purchased it.

[JakeBrake]

DW and I bought two identical John Hancock LTC policies through my Megacorp at age 60. No employee or spouse could be excluded for health reasons. This policy is no longer offered. The coverage for each policy is as follows:

Nursing Home Daily Maximum Benefit $230.00
Home Health Daily Maximum Benefit $172.50
Lifetime Maximum Benefit $419,750.00
Monthly Premium For Each Policy $131.96

JH can make inflation adjustments, but we are allowed to keep the same coverage at the same premium. Our area is way below the national average for LTC costs.

[Newventurer]

I agonized about this for a few months.

DW had a Genworth plan available to her at work. I could have also qualified but I decided that we would play "'one in and one out". Since MY DW is a few years younger and supposed to live longer decided to gamble that way.

The thing that bothered me about the comment some make "I am self insured" is that it may not take into account a covered illness in the near term, unless the funds are already set aside, up front.

Details

DW - 49

monthly expense $57.98
Elimination period 90 days
Lifetime max $108,000
Facility care max $3000 per month
Nursing facility benefit $3000
Assisted living facility benefit $3000

[Katsmeow]

What type of medical things disqualify someone from long-term care insurance? I mean I know that anything showing current dementia/Alzheimers or inability to take care of oneself would disqualify.

But I was under the impression (perhaps wrongly) that there wasn't the kind of stringent underwriting that you see with medical insurance.

[Newventurer]

Since DW qualified I can't say exactly what might have disqualified her, but the medical questionnaire was excruciating. And of course they did follow up with her doctor to verify it all.

[Chuckanut]

Here are a few things I read today while listening to a consumer radio show.

1. Insurance companies are losing big on past LTC policies. They figures most people would keep them only a few years and drop the insurance before needing it, or, that if they used the insurance it would only be for a few months at most. Both, turned out to be wrong.

2. Insurance companies have over reacted to the the above and as a result current new policies are too expensive for what they offer. Today is not a good time to buy this product. It may take a few years for things to settle out.

3. Some insurance companies are tying life insurance to a rider for LTC. The jury is out on whether this is a good product.

4. Buying insurance in the lower 50's or younger is a bad idea since there is no guarantee that it will be affordable 30-40 years in the future when you will most likely need it. You may end up paying for years, cancelling when you can no longer afford it, and thus lose the benefits of these payments exactly when you are most likely to need it.

Take what you like and leave the rest.

[tuffshed]

Quote:

Originally Posted by Jack_Pine So who here does LTC?

I purchase it a few years back from my Megacorp. When I married the DW was able to get on the plan as well but pays for it separately. At 58 and 52 we have a pretty good deal and can continue it for the same price after leaving Megacorp so it makes sense right now to keep a spouse from going bankrupt or even just weathering an extended stay as these are allowed as well. If your Megacorp offers a plan I would seriously consider it.

[Chuckanut]

Here's an article on the three risks insurance companies took when they issued LTC policies,how things went wrong, and why LTC premiums have gone up so much:

Life, Investments & Everything: Insurer Nastygrams: When Long Term Care Insurance Premiums Rise

[youbet]

Quote:

Originally Posted by tuffshed so it makes sense right now to keep a spouse from going bankrupt

I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans.

In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished."

In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially.

Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

[lauren tilbury]

Can someone explain self insure, please?

[REWahoo]

Quote:

Originally Posted by lauren tilbury Can someone explain self insure, please?

Pay for care out of your own pocket by setting aside money dedicated for LTC use.

[MichaelB]

Quote:

Originally Posted by youbet I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans. In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished." In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially. Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

That's a good point. I don't have any numbers handy but my guess is this was a real problem before the rule change that allows assets to be divided. Now the stay at home spouse can keep the house, some pension income and financial assets that are not unlimited but also keep the spouse above "impoverished".

[travelover]

Quote:

Originally Posted by lauren tilbury Can someone explain self insure, please?

For some people, I think it means a .38 in the bedstand.

[JakeBrake]

Quote:

Originally Posted by MichaelB That's a good point. I don't have any numbers handy but my guess is this was a real problem before the rule change that allows assets to be divided. Now the stay at home spouse can keep the house, some pension income and financial assets that are not unlimited but also keep the spouse above "impoverished".

This is only true if your LTC plan in to rely on Medicaid.

[Bikerdude]

Here's an article published today:

Surprise! Your long-term care insurance won’t cover it - MarketWatch

"There is only one insurance carrier left offering true Group LTC Insurance, and they are very selective about the groups they will write. The other major carriers stopped selling the product over the past few years. Group insurance pricing is based on a steady flow of new entrants into the group. These group LTC policies are now closed blocks of business and as such are subject to multiple rate increases in the future. As these rate increases occur, many of the healthy lives will drop out of the group, which worsens the group experience, creating a never ending spiral."

[brewer12345]

Quote:

Originally Posted by youbet I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans. In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished." In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially. Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

The problem with trying to hedge the risk with the products offered today is that they do not cover the truly devastating long term stays, only the 3 year stuff that many ER board denizens could survive. All the lifetime coverage policies are gone from the marketplace.