LTC -- how do you plan on covering this risk?

[Amethyst]

People appear to be living longer, but not better. Hardly seems worth it, and I wonder why people bother. I am being serious.

 

[NW-Bound]

People's survival instinct is very strong. We do not know how we will really feel and act until we are there.

My father lingered on for a long time when it was so hopeless, and was willing to take any step to stay alive, although he was confined to a bed and asleep all the time during his last 3 months. In talking to a nurse, I learned that it meant he was not in pain and only felt very lousy, as terminal cancer patients tend to want to die to end the pain. My father died from complications caused by kidney failure.

And on the other hand, a distant relative of mine was diagnosed with kidney failure, refused to have dialysis and died from it. He was in his 70s.

 

[youbet]

It is also worth noting that the majority (I think) of states have filial responsibility laws that enable them to sue seeking reimbursement from one or more of your children if they so choose. Granted, to date, these laws have not been aggressively enforced, but that may be changing.

What future decades will bring is certainly hard to predict. But I'm confident that even in ultra-broke Illinois, we won't be responsible for a penny of MIL's expenses while she's in a NH on Medicaid. You may think this, but I think you're wrong.

 

[2017ish]

What future decades will bring is certainly hard to predict. But I'm confident that even in ultra-broke Illinois, we won't be responsible for a penny of MIL's expenses while she's in a NH on Medicaid. You make think this, but I think you're wrong.

Illinois currently does not have a filial responsibility law. If it enacts one, the exact (or inexact) language of the statute (as always) would govern any responsibility that you might have. Given the status of executive/legislative relationship in the state right now, it is not likely that anything will happen soon...

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Edited to add:

Just as an example, Tennessee claims the right, to the extent permitted by federal law, to seek reimbursement for medicaid expenses from "parents, spouses, children, and guardians" "for any benefit or benefits rendered to the recipient." That's pretty broad and unambiguous....

 

[mathjak107]

The LTC insurance is very expensive, so we are putting aside some money in order to cover our needs. Will it be enough is hard to say but similarly I can ask could you overpay insurance company for an amount you may need? Will the insurance company you pay to be there when you need it?

i would say with most states backing them and with most states requiring healthy company's to take over weaker ones when asked i would say they stand a better chance of the money being there when you need it then your own volatile portfolio does .

 

[Bestwifeever]

Illinois currently does not have a filial responsibility law. If it enacts one, the exact (or inexact) language of the statute (as always) would govern any responsibility that you might have. Given the status of executive/legislative relationship in the state right now, it is not likely that anything will happen soon...

___________________
Edited to add:

Just as an example, Tennessee claims the right, to the extent permitted by federal law, to seek reimbursement for medicaid expenses from "parents, spouses, children, and guardians" "for any benefit or benefits rendered to the recipient." That's pretty broad and unambiguous....

Well, there we go, finally a solution to funding LTC care! We will just move from Illinois to a state with filial responsibility and then our survivors can pay for our LTC whether they choose to or not. And they can do the same, and so on, and so on, and so on....

 

[youbet]

Just as an example, Tennessee claims the right, to the extent permitted by federal law, to seek reimbursement for medicaid expenses from "parents, spouses, children, and guardians" "for any benefit or benefits rendered to the recipient." That's pretty broad and unambiguous....

And that's why I don't think it's going to happen. The first time a state goes after an adult child to pay back a parent's Medicaid expenses will begin the process of demonstrating how arbitrary and capricious it will be.

For example "a 60 year old dad has to give up his own kids college savings to pay the state for his estranged (hasn't seen in 40 years) father's Medicaid-paid NH bills." I don't think so......

I understand politics is involved so anything is possible. But, like eliminating SS, this would be election-suicide for whoever pushes it.

The real answer is to extend look-back periods to beyond 5 years so a person's resources can never be transferred to someone else in order for them to qualify for Medicaid and to make Medicaid paid NH stays be in NH's with fewer amenities. For example, Medicaid might only pay for mom or dad to be in a 4 - 6 bed ward. That would make for less incentive to hide resources in order to qualify for Medicaid yet still provide basic care.

 

[youbet]

i would say with most states backing them and with most states requiring healthy company's to take over weaker ones when asked i would say they stand a better chance of the money being there when you need it then your own volatile portfolio does .

You've stated that that is the case in your own personal situation and I understand how folks can get into that predicament. But it's not the case in my scenario and I assume not in the scenario of many others.

 

[2017ish]

And that's why I don't think it's going to happen. The first time a state goes after an adult child to pay back a parent's Medicaid expenses will begin the process of demonstrating how arbitrary and capricious it will be.

...

It's happened in Pennsylvania. (There, the law allowed the Nursing home itself to successfully file the suit.) That was several years ago....

I agree that n one level it looks bad. OTOH, if I were representing the state, I'd be able to make a very good argument that kids who were raised and educated by the indigent person and made a great deal of money (compared to the jury or judge) shouldn't be able to foist their obligations off onto the public at large. (Note, too, that some of the statutes have outs for children who've been estranged for lengthy periods of time).

 

[youbet]

It's happened in Pennsylvania. (There, the law allowed the Nursing home itself to successfully file the suit.) That was several years ago....

I agree that n one level it looks bad. OTOH, if I were representing the state, I'd be able to make a very good argument that kids who were raised and educated by the indigent person and made a great deal of money (compared to the jury or judge) shouldn't be able to foist their obligations off onto the public at large. (Note, too, that some of the statutes have outs for children who've been estranged for lengthy periods of time).

What are some of the guidelines you'd use? Multi-millionaire children get sued? Or maybe also kids with one million? Maybe kids who are solidly middle class but really don't have anything "extra" unless they sell the house, pull their kids from college, etc. How about kids just barely getting by and currently ill-prepared for retirement? Would you sue them? Give us some examples of where you'd draw the lines.

 

[2017ish]

What are some of the guidelines you'd use? Multi-millionaire children get sued? Or maybe also kids with one million? Maybe kids who are solidly middle class but really don't have anything "extra" unless they sell the house, pull their kids from college, etc. How about kids just barely getting by and currently ill-prepared for retirement? Would you sue them? Give us some examples of where you'd draw the lines.

If I were representing the state, it would not be my call as to the decisionmaking criteria. That is an executive/political decision. Given the text of the statutes, though, I suspect that they wouldn't much care. Going after someone who was "barely getting by and currently ill-prepared for retirement" would not be prudent on a cost-benefit level though.

How about you? If you were my state-executive client and charged with faithfully executing the laws and guarding the public fisc, where would you draw the line?

 

[youbet]

it would not be my call as to the decisionmaking criteria

OK. Mine neither.

 

[bingybear]

If I were representing the state, it would not be my call as to the decisionmaking criteria. That is an executive/political decision. Given the text of the statutes, though, I suspect that they wouldn't much care. Going after someone who was "barely getting by and currently ill-prepared for retirement" would not be prudent on a cost-benefit level though.

How about you? If you were my state-executive client and charged with faithfully executing the laws and guarding the public fisc, where would you draw the line?

I would think the state would have to enforce the law uniformly. If the law does not define limiting rules and guidelines, they likely could have counter suits and appeals to the Supreme Court of the state.

I could see this stuff if $ were shifted late in life, but not just because someone is related. JMO

 

[2017ish]

I could see this stuff if $ were shifted late in life, but not just because someone is related. JMO

Bingybear, I don't disagree. It makes me really uncomfortable to envision enforcement of these laws. Sure, there are easy cases at both extremes--but those are extremes.... Frankly, I haven't given it the thought it would require to work through all of the policy ramifications....

 

[bingybear]

i would say with most states backing them and with most states requiring healthy company's to take over weaker ones when asked i would say they stand a better chance of the money being there when you need it then your own volatile portfolio does .

quote below from link

OLDWICK, N.J., Feb 13, 2015 (BUSINESS WIRE) -- A.M. Best has downgraded the financial strength rating (FSR) to A- (Excellent) from A (Excellent) and the issuer credit ratings (ICR) to “a-” from “a” of Genworth Life Insurance Company (GLIC) (Wilmington, DE), Genworth Life Insurance Company of New York (New York, NY) and Genworth Life and Annuity Insurance Company (Richmond, VA), the key life/health subsidiaries of Genworth Financial, Inc. (Genworth) [NYSE: GNW]. Additionally, A.M. Best has downgraded the ICR to “bbb-” from “bbb” of Genworth and its existing debt ratings by one notch. The ratings had been under review with negative implications since Dec. 18, 2014. The outlook assigned to all ratings is stable. (Please see below for a detailed listing of the debt ratings.)

The ratings downgrade follows Genworth’s recent reporting of fourth-quarter 2014 results, which reflected the substantial completion of its long-term care insurance (LTC) active life margin review. Additionally, management confirmed its intention to conduct a thorough review of Genworth’s businesses, encompassing holding company debt reduction and a multistep restructuring plan to streamline operations.

Not the worst rating. I bet the states also have an interest in a piece of the insurance pie. Being partnership plans, I assume that the states get a piece of it to cover the added dollars excluded from medicaid extended benefits.

I have heard reports that Genworth's LTCi business is worthless (evaluating it as a standalone business). Would explain increasing premiums.

 

[Live And Learn]

People appear to be living longer, but not better. Hardly seems worth it, and I wonder why people bother. I am being serious.

Agree ! I have been spending some time thinking about the parameters where I would not want medical intervention. It's very difficult to determine where I would want the lines drawn. As I get older it may even become more difficult. I also have religious considerations which makes it even more complicated.

 

[jebmke]

People appear to be living longer, but not better. Hardly seems worth it, and I wonder why people bother. I am being serious.

I agree with you. I have no intention of dragging things out -- but my biggest fear is being physically or mentally incapable of taking matters into my own hand.

 

[Mulligan]

quote below from link





Not the worst rating. I bet the states also have an interest in a piece of the insurance pie. Being partnership plans, I assume that the states get a piece of it to cover the added dollars excluded from medicaid extended benefits.



I have heard reports that Genworth's LTCi business is worthless (evaluating it as a standalone business). Would explain increasing premiums.

I wouldn't be excited about that debt rating if I had an insurance policy. That is one notch above heading toward junk. I assume some state pools would back them up? I know it isn't near the stage of insolvency, but heck almost all of my low on the food chain preferred stocks have higher debt ratings than that.


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[bingybear]

I wouldn't be excited about that debt rating if I had an insurance policy. That is one notch above heading toward junk. I assume some state pools would back them up? I know it isn't near the stage of insolvency, but heck almost all of my low on the food chain preferred stocks have higher debt ratings than that.


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+1

 

[Mulligan]

+1

I guess it could be worse though Bingy.... A person 10 years ago could have put their LTC money into the stock of the company hoping to do better than the insurance policy. Well $100,000 of Genworth stock bought in 2005 would be providing you with $20,000 for LTC today.


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[LARS]

I agree with you. I have no intention of dragging things out -- but my biggest fear is being physically or mentally incapable of taking matters into my own hand.

The challenge is you have to be willing to leave some on the table so to speak. How to determine how much "some" you are giving up is the hard part.

 

[Amethyst]

At the point where others use my name in conjunction with the word "toilet," used as a verb. I don't want to be "toileted" on a continuing basis.

Amethyst

The challenge is you have to be willing to leave some on the table so to speak. How to determine how much "some" you are giving up is the hard part.

 

[athena53]

In the event of a major unexpected hit to our net worth, and the LTC was needed, the healthy spouse would remain in our home, and let Medicaid pay for the nursing home. I continue to be surprised at how few of the members here seem to be aware of this alternative. It allows for continuation of life in a normal manner without the upset of moving for the healthy spouse.

In effect, the medicaid solution avoids trauma, and obviates the sale of the residence. For us, it allows for simplified accounting, since the home value can be included as a liquid asset in planning. (You have to think on this.)

I don't know about the rules in your state but there are restrictions on how much of the assets the healthy spouse can keep; the rest is considered available to pay NH costs till it's gone.

Actually I'm concerned about the number of people whose long-term care "insurance" is Medicaid. Not on this board in particular, but in the general US population. I suspect that as states struggle to pay the bills and cut their rates to nursing homes, the NHs that take a big % of Medicaid patients will be pressured to keep cutting costs resulting in barely-adequate care. That's not how I want to spend my last days.

 

[jkern]

I plan to self insure. Since I am currently single, my plan would be to redirect income and rent my house to cover LTC costs. About $3000 per month from my current budget could go to LTC and about $4000 per month from renting out the house. I should be able to pay the annual costs without depleting assets.

 

[mathjak107]

i wish our area ran 3k it is 9-10k a month .