ltc insurance

[Huston55]

So, now on CCRC's let me pose this thought:

"Hybrid's" are a melding of life insurance and long term care insurance to solve the problem of handling long term care needs financially.

It occurs to me that CCRC's are a melding of housing "leasing" and long term care services to handle long term care needs financially.

Any comments on that idea? I guess a question I have implicit in that thought is: when one enters into a CCRC contract, one is guaranteed a "lease" on a housing unit (of some type, and that type may change over time), and also guaranteed LTC care services as needed? Does one have incidents of ownership in CCRC contracts?

Just trying to get a handle on the nature of the beast.

The vast majority of the CCRCs in the SF Bay Area are analogous to leasing. I believe this is true throughout the US. However, there are some that include (require) unit ownership. While that might sound like a good thing to some, I view it as a disadvantage because one (or one’s heirs) typically continues to pay the monthly fee until the unit is sold. And, there is a limited buyer population for such units so, it can take a while.

 

[ChrisC]

The vast majority of the CCRCs in the SF Bay Area are analogous to leasing. I believe this is true throughout the US. However, there are some that include (require) unit ownership. While that might sound like a good thing to some, I view it as a disadvantage because one (or one’s heirs) typically continues to pay the monthly fee until the unit is sold. And, there is a limited buyer population for such units so, it can take a while.

I'm on the wait list for a CCRC in my neck of the woods. It's a Type C business model with equity ownership -- you own the unit and pay-as-you go for home care or skilled nursing care if you can no longer independently care for yourself. The wait list is 4 plus years long and there's never been a shortage or timing issue with new residents taking over units once they become available. Typically, new residents customize their units, which might take up to 4 months. I'm not aware of this CCRC charging heirs any monthly maintenance fees once the owner has left the campus -- and even if they did, this would be a very minor expense given the speed in which these units are sold and the appreciation in value these units have had over the 22 years this CCRC has been in existence.

I also have LTCi, 5 year coverage, with a daily benefit of $303. My LTCi coverage would dovetail nicely with the coverage provided with this CCRC. With the CCRC, care in the SNF is free for the first 90 days, afterwards you pay a per-diem cost for care, currently $270 a day (which the CCRC says is a discounted rate). This CCRC is well versed with LTCi and would handle claims processing and advocacy for the resident. My LTCi has a 90 days elimination period and then daily benefits coverage would apply.

We're very risk adverse to LTC with parents and siblings who have had long goodbyes in skilled nursing and assisted living facilities. Our Plan A is to stay at home and receive home care if necessary. Plan B is the CCRC

Covid 19 has caused us to rethink our preferences for CCRC units. Our CCRC campus has single family homes (cottages they call them) and condos in multi-unit buildings (villas they call them). In light of Covid 19 and potential pandemics, we will try to avoid all congregate living in multi-unit housing. Covid 19 has spread like wildfire in the congregate components of virtually every CCRC, nursing home or asssited living facility in our area.

 

[CRLLS]

For those not aware of coverage, DMIL is starting the benefit stage of her LTCi. She needs a lot of care but wants to stay at home as long as she can. She is getting 12 hr per day care. Her cost for home care is considerably more than if she was in a facility. In addition, the LTCi pays less per day for in home care than it would for 24 hr care in a facility.

 

[latexman]

Dad and Mom's LTCi was my sister. Sis and her hubby lived on Dad and Mom's 40 acre farm. Dad and Mom's house was just down the hill from Sis's house, about 150 yards away. Sis paid the taxes on her tract, but no rent, for years. I thought it was a sweet deal for her for the longest time, but when Sis stepped up to help Mom and Dad and eventually quit her job for 2-3 years when they needed even more care, I realised it wasn't so sweet a deal then, and Sis was paying for the investment Mom and Dad made in her. Mom and Dad passed 4 and 3 years ago, repectively. Sis is my hero!

 

[Trooper]

Timely thread for DW and I. We, just last month, decided to cancel our LTC policies that we've had since 2005 (we were in our late 40s at the time).

Reasons were the same as many have indicated:
- 3rd straight annual increase of 20% or more
- Skepticism regarding insurer's willingness to pay claims should they arise
- Ability to self-insure. I'm taking my employer's moderate pension offering as a lump sum. We'll invest that and earmark it for LTC. This, plus equity in our home should be sufficient.

One item of note: We chose the "Contingent Benefit Upon Lapse" option, which allows us to stop making payments, but entitles us to a benefit equal to what we've paid in premiums thus far. If you considering canceling, ask about this.

 

[nwsteve]

We are in a Type A (Life Care) CCRC and moved in when we were 72 (about 2 years ago). Earlier than planned but the timing fit other desires to be closer to grandkids and being closer to an aging (95) parent.
Our property was a new build by an established Life Care Community org. so there was no wait list. One other benefit is that demographics are much younger than with established properties. Our average age is currently 78 versus the 82 at our 20 year old sister property which has a long waiting list.
Selecting a CCRC requires you to parse which type of CCRC you want. Type C is closer to rental model with moves to higher level care coming at rates closer to market driven by level of care. Only Type A (Life Care) provides no cost moves to higher level of care. Type B is more a blended model with moves from Independent Living to Assisted/Skilled Nursing/Memory at a discount to market but definitely not no cost. For example, we had a resident here who suffered a stroke and moved to Memory Care ($10000/mon market price) while his spouse remained in their IL apt. Only increment in cost was the additional cost meals served which our state mandate advance care providers deliver. He was there for about six months and was able to move back to his IL apt with his spouse due the care and medication bringing him to a manageable condition for his spouse.
Also, you find some properties are for-profit while most are non-profit. Just learn which ones are which as your long-term costs will likely to be much different.
Your upfront entry cost is greatly impacted by not only how elaborate of a property is but also how much you want to have refund (usually to your heirs). Our CCRC offered a limited refund period (5 years) and then none but also up 95%. Our heir is unlikely to need to inherit to have a good life so we chose the no refund option cut our entry cost by 40%.
CCRC are complex and offer a lot of choices of life style. Life care properties fully replace a traditional LTC policy and add so much more including immediate benefit vs waiting until you are too impaired to enjoy. It also liberates your children from the decision of where to put Mom & Dad. We preferred to make our own choice ;-)

 

[Koolau]

Plus if your homeowners or auto policy goes up 100% (which happened to my mother's LTC policy) you can usually find another insurer at a cheaper rate--not so with a LTC policy. If you are age 80 and your LTC policy goes up 100% you cannot find another policy, there is no way to shop around, you are stuck.

Very true. In fact when our premiums for LTC almost doubled, I looked around to find another policy. All policies which even approached our coverage cost MUCH more than we were paying - even with the doubled premiums. YMMV

 

[RetireeRobert]

We are in a Type A (Life Care) CCRC and moved in when we were 72 (about 2 years ago). Earlier than planned but the timing fit other desires to be closer to grandkids and being closer to an aging (95) parent.
Our property was a new build by an established Life Care Community org. so there was no wait list. One other benefit is that demographics are much younger than with established properties. Our average age is currently 78 versus the 82 at our 20 year old sister property which has a long waiting list.
Selecting a CCRC requires you to parse which type of CCRC you want. Type C is closer to rental model with moves to higher level care coming at rates closer to market driven by level of care. Only Type A (Life Care) provides no cost moves to higher level of care. Type B is more a blended model with moves from Independent Living to Assisted/Skilled Nursing/Memory at a discount to market but definitely not no cost. For example, we had a resident here who suffered a stroke and moved to Memory Care ($10000/mon market price) while his spouse remained in their IL apt. Only increment in cost was the additional cost meals served which our state mandate advance care providers deliver. He was there for about six months and was able to move back to his IL apt with his spouse due the care and medication bringing him to a manageable condition for his spouse.
Also, you find some properties are for-profit while most are non-profit. Just learn which ones are which as your long-term costs will likely to be much different.
Your upfront entry cost is greatly impacted by not only how elaborate of a property is but also how much you want to have refund (usually to your heirs). Our CCRC offered a limited refund period (5 years) and then none but also up 95%. Our heir is unlikely to need to inherit to have a good life so we chose the no refund option cut our entry cost by 40%.
CCRC are complex and offer a lot of choices of life style. Life care properties fully replace a traditional LTC policy and add so much more including immediate benefit vs waiting until you are too impaired to enjoy. It also liberates your children from the decision of where to put Mom & Dad. We preferred to make our own choice ;-)

Wow! Very informative post. I see I will have to research what models CCRC's even exist here in my neck of the woods where my three kids are. Thank you for taking the time to post!

 

[bolt]

I always recognize the solvency of all INSURANCE providers considering so many numerous LTC/and similar insurance providers will no longer offer LTC and many have gone into bankruptcy.

LTC.....no, I do not have or believe in LTC insurance being viable.

YMMV

 

[ncbill]

All I can say for those buying into CCRCs is I wish them luck getting a SNF bed that's actually at the CCRC.

Over the ~25 years my grandparents lived at the local top-rated (church-run) CCRC it demolished the existing SNF and rebuilt a much smaller one...private rooms only, but maybe 1/3 the capacity of the original...grandfather never needed it but grandmother barely got into a bed there (otherwise G_d only knows where they would have put her)

 

[nwsteve]

I can't speak for all CCRC's, but all the Type A CCRCs we shopped had provisions that if the CCRC's SNF beds were occupied, the CCRC would find comparable care in the community (still at no change in cost to a resident). Our property is, in fact, restricted from accepting any non-resident to our SNF/Asst Living after our official start-up periods ends. Any resident in an off-site property would be returned to the home property at first vacancy.
It is definitely an issue to understand well when shopping a CCRC.

 

[ChrisC]

I can't speak for all CCRC's, but all the Type A CCRCs we shopped had provisions that if the CCRC's SNF beds were occupied, the CCRC would find comparable care in the community (still at no change in cost to a resident). Our property is, in fact, restricted from accepting any non-resident to our SNF/Asst Living after our official start-up periods ends. Any resident in an off-site property would be returned to the home property at first vacancy.
It is definitely an issue to understand well when shopping a CCRC.

It's something you have limited control over in light of changing circumstances and demographics at a CCRC. Since we're still in the hunt for a CCRC back-up plan (even though we're on the waitlist for one), we study the CCRCs in our area to see current SNF capacity and expansion plans. One of the draws to us in a CCRC is the campus life care trappings afforded to residents, especially if one of us goes has to go into skilled nursing care. It is of incalculable value to us to remain together on one campus to visit each other if one of us winds up in skilled nursing care -- thus, it would be quite distressing if a SNF bed was not available to us on the CCRC campus, especially if the "comparable facility" was not located within a 5 mile drive from the CCRC. We place a very high premium on getting the SNF bed in the CCRC facility in which we would purchase a residence.

The CCRC we've waitlisted currently has 60 beds in it's SNF wing, which is now at full occupancy. It plans on expanding capacity and had developed construction plans to accomodate future needs. CCRCs have to carefully plan for potential demand.

 

[nwsteve]

The CCRC we've waitlisted currently has 60 beds in it's SNF wing, which is now at full occupancy. It plans on expanding capacity and had developed construction plans to accomodate future needs. CCRCs have to carefully plan for potential demand.

While still no guarantee, in your example, I would ask for a couple pieces of data:
1. the name of the facilit(ies), the CCRC is currently sending their overflow. I would then research those properties and their State's inspection ratings. This exercise should give an idea of how the management protects their residents.
2. For all residents who were moved off campus, how long before they returned to home campus.
3. Look at age demographics of current residents and ask for recent trends of residents entering asst living and/or their SNF.
4. Determine if building permits have been actually issued for their SNF expansion.

We considered originally going to a new building at a CCRC campus which was totally remodelling/expanding their SNF and adding a new IL building (our target). All the planning and design and plans were done and ground breaking scheduled in 12 months. Whoops, neighbors appealed expansion plans to city's planning board, but loss and appealed to courts. Three years later, still no ground breaking. We pulled our deposit when original groundbreaking didn't happen.
Let your instincts be your guide.

 

[Huston55]

The vast majority of the CCRCs in the SF Bay Area are analogous to leasing. I believe this is true throughout the US. However, there are some that include (require) unit ownership. While that might sound like a good thing to some, I view it as a disadvantage because one (or one’s heirs) typically continues to pay the monthly fee until the unit is sold. And, there is a limited buyer population for such units so, it can take a while.

I'm on the wait list for a CCRC in my neck of the woods. It's a Type C business model with equity ownership -- you own the unit and pay-as-you go for home care or skilled nursing care if you can no longer independently care for yourself. The wait list is 4 plus years long and there's never been a shortage or timing issue with new residents taking over units once they become available. Typically, new residents customize their units, which might take up to 4 months. I'm not aware of this CCRC charging heirs any monthly maintenance fees once the owner has left the campus -- and even if they did, this would be a very minor expense given the speed in which these units are sold and the appreciation in value these units have had over the 22 years this CCRC has been in existence.

Two very different environments, and I expect this is very location and property dependent. Just one more example of CCRC research that should be done before making a decision.

 

[Huston55]

Wow! Very informative post. I see I will have to research what models CCRC's even exist here in my neck of the woods where my three kids are. Thank you for taking the time to post!

I believe Willamette View is a Life Care CCRC. I haven't checked it out but, you may want to.

 

[harllee]

I can't speak for all CCRC's, but all the Type A CCRCs we shopped had provisions that if the CCRC's SNF beds were occupied, the CCRC would find comparable care in the community (still at no change in cost to a resident). Our property is, in fact, restricted from accepting any non-resident to our SNF/Asst Living after our official start-up periods ends. Any resident in an off-site property would be returned to the home property at first vacancy.
It is definitely an issue to understand well when shopping a CCRC.

This is how our Type A CCRC operates--no outsiders allowed into the skilled nursing, etc. If there is no skilled nursing (or memory care) bed available they have to find you a comparable one. This CCRC has been in existence for about 20 years. I have asked and have been told that they have NEVER had to ship someone off for skilled nursing in another facility. They have a large skilled nursing/memory care building and when I look at occupancy rates there are always a few beds available. It is expensive to get in but worth it in my opinion (and the opinion of many others) hence the 10 year waiting list.

They are very strict about admittance. We know several people who could not get in because one of the spouses could not pass the memory test. If you have had cancer it is a 5 year wait. You cannot get in if you have Parkinsons or MS.

 

[Koolau]

We took "the tour" of a CCRC in our old area. They put quite the "rush" on us. The complex had a mix of cottages and apartment units up to 3 BR IIRC. Very nice, indeed. In all, it took up an area of perhaps 3 city blocks. When we stuck our heads in the door of the on-site SNF, it appeared to be a "ward" with maybe 8 beds (full). Our enthusiasm for CCRCs quickly diminished, though I'm sure there are some really good ones. YMMV

 

[nwsteve]

We took "the tour" of a CCRC in our old area. They put quite the "rush" on us. The complex had a mix of cottages and apartment units up to 3 BR IIRC. Very nice, indeed. In all, it took up an area of perhaps 3 city blocks. When we stuck our heads in the door of the on-site SNF, it appeared to be a "ward" with maybe 8 beds (full). Our enthusiasm for CCRCs quickly diminished, though I'm sure there are some really good ones. YMMV

Just guessing here but I suspect your CCRC trip was not to a Type A property. But your visit is a great illustration of the benefits of the personal visit. Experiencing is worth a lot more than a fancy brochure. ;-)

In our case, during our visits to the Type A properties (all non-profits), we never felt any pressure. In fact, it was much more of a facilitation to understand what our retirement objectives were and how their facility met those needs. We found it helpful to get a clear understanding prior to our visit what category a particular CCRC was positioned.
As a generalization, Type A properties recognize they are in the business of a life long decision and have no interest in a failed match. YMMV

 

[RetMD21]

In addition, the LTCi pays less per day for in home care than it would for 24 hr care in a facility.

Oh, I never thought of that. I just noticed that my mother would have received benefits only with the 2 ADL trigger. If one ADL you are on your own.

Timely thread for DW and I. We, just last month, decided to cancel our LTC policies that we've had since 2005 (we were in our late 40s at the time).

I would probably do the same. I had disability and life insurance at one time but dropped them when assets rose and the need for insurance receded. I was always skeptical that buying LTC while young would get you a better premium later.

 

[marko]

Having spent a lot of time in NHs and SNFs for my brother, the thing I observed is this:

Life changes for both spouses. The healthy spouse now spends most of his/her day visiting the sick spouse.

As a result, the cost of LTC is not in addition to your current expenses but your overall expenses change. No more vacations, expensive dinners, two cars, shopping, maybe get rid of that boat/second home. A lot of discretionary spending comes to a grinding halt.

So --depending on your healthy/current spending-- a LTC facility that costs maybe $80K a year might "only" be costing you an additional $40K a year as your spending profile shifts away from healthy spending which neither of you can no longer do.

 

[Koolau]

Just guessing here but I suspect your CCRC trip was not to a Type A property. But your visit is a great illustration of the benefits of the personal visit. Experiencing is worth a lot more than a fancy brochure. ;-)

YMMV

Agreed, an extensive tour is a minimal starting point.

I believe the complex we visited offered Type A and other contracts. I recall, for instance that they told us there would be a financial determination of whether we would qualify. Our discussion in their office indicated we would easily qualify.

I DO recall being "urged" to get on their waiting list. YMMV

 

[nwsteve]

I DO recall being "urged" to get on their waiting list. YMMV

Koolau, the "waiting list" option is just another component of managing timing while protecting your options. With ST interest rates in timing, you may want to consider a waiting list "investment" seriously if you believe you have found a potentially acceptable location.
At the properties we visited, all offered a pretty flexible waiting list policy and full refund. One property shared that one prospect had been on their "waiting list" for over 10 years. Every time they offered him a unit matching his requirements, he would tell them he just was not ready yet. I guess he was pushing 90 and still thinking about it. At this property, at least, he preserved his position on the list and so would had an easy move once he decide he was "ready".
We actually ended up moving our deposit from a property than ran into building permit issues to another property that was part of the CCRC parent operations. Turned out for the better in many ways.

 

[harllee]

Waiting lists for CCRC work in different ways. At the CCRC where we are on the waiting list it takes about 10 years for your name to get to the top of the list. Once you get to the top of the list you are offered an opportunity to move in 3 times and if you refuse 3 times you go back down to the bottom of the list. There is no "hard sell" to get on the list --the place is so popular they don't have to sell it. In fact to even get on the list you have to give them a financial statement to prove you can afford to move in and put down a deposit. The deposit is applied against your move in fee but if you never move in you lose your deposit.

 

[nwsteve]

Waiting lists for CCRC work in different ways. At the CCRC where we are on the waiting list it takes about 10 years for your name to get to the top of the list. Once you get to the top of the list you are offered an opportunity to move in 3 times and if you refuse 3 times you go back down to the bottom of the list. There is no "hard sell" to get on the list --the place is so popular they don't have to sell it. In fact to even get on the list you have to give them a financial statement to prove you can afford to move in and put down a deposit. The deposit is applied against your move in fee but if you never move in you lose your deposit.

Exactly why you want to ask any target CCRC very explicit questions about any and all financial and living parameters important to your decision. For that reason, we had a check list to be sure we got answers on each item. When we got to our final choice, compared our answers to what the contracts actually said. And I recommend you get your contracts well before you are going to sign. Ours made getting a mortgage look easy. ;-).
In our market, the CCRCs are more flexible than Harllee's market--key is to make no assumptions--look at the deposit docs and be sure there are no questions about a refund. All of CCRC of interest to us did ask for 10% deposit and one had no wait list--as in they weren't providing that choice.

 

[Dd852]

Dd852, I am so sorry about your mom and now you are having to deal with a LTC company that seems to be stonewalling you. And you even had a hard time getting them to stop taking the premiums after her death? What a racket. I am afraid the same thing is going to happen eventually with my mom's LTC policy. She has paid premiums for 35 years on the policy and may never get any benefit from it. Even if my mom where to somehow get the maximum amount under her policy she will never get her money's worth. In my opinion in most cases LTCI just is not a good deal financially. It seems sort of like dental insurance-- the maximum amount you can receive under the policy is not enough to justify the premiums paid in.

Funny enough, despite the agent agreeing on the phone that they wouldn’t take another premium, I just got a dunning letter — to my address so they clearly had updated their records, wanting a premium extending coverage five months past my mother’s death. I’ve simply passed to the lawyer handling her estate - let him fight it. But I must say Met Life has not impressed me.