Anybody Here Own LTC (Long Term Care)

[Sheryl]

My company pays $119/mo for my long term care insurance. This covers $4,000/month benefit for a period of 6 years. There is 5% compound inflation protection, and a lifetime maximum of $288,000 which increases with the inflation terms. It covers in home or facility care.

I have the option of continuing it at same price when I leave this employer, but I doubt that I will.

[wabmester]

Quote:

Originally Posted by MasterBlaster How much should your net-worth be for you to self-insure LTC and forego any insurance policies ?

Seems like the worst-case is both spouses needing long-term care for 10+ years, which would cost something like $1.4M in today's dollars.

For the average case, we're talking about a 60% probability of 5 years for one spouse, so closer to $360K on average.

For me, the decision hinges more on making it easier for family members than the financial impact. * If you decide to self insure, it seems like your kids should be in on the decision.

[youbet]

Quote:

Originally Posted by wab For me, the decision hinges more on making it easier for family members than the financial impact. * If you decide to self insure, it seems like your kids should be in on the decision.

I didn't make the kids part of the decision, but I have reviewed my written instructions for handling my investments in the event I am suddenly incapacitated and cannot do so myself with them.* This includes withdrawal strategies for funding my self-insured LTC plan.

[Nords]

Quote:

Originally Posted by wab Can anybody comment on the worst-case term length for long-term care?

Senile dementia.

My grandfather probably became incapable of higher-level functioning around 1985, but unfortunately the problem didn't really come to anyone's attention until 1988 (when he stopped paying his rent).

"Incapable" meant that he was taking the mail out of the mailbox and putting it in the drawers, closets, and corners of a two-bedroom apartment. (Six days a week for two years, and he got a lot of junk mail.) He stopped paying his taxes in the early 1980s. He stopped paying his utility bills in 1985. He emptied his safe-deposit box contents into a valise that he carried in the trunk of his car for over a year. He ate the same breakfasts, lunches, & dinners at Friendly's for well over a year (but he was very popular with the staff).

A body that can survive a Friendly's diet is darn near indestructible. He was in full care until early 2002, and it was only because of a respiratory virus that developed into pneumonia.

I have to admit, though, that the same senile dementia that landed him in the facility also made his final decade one of the happiest of his life...

[mathjak107]

Quote:

Originally Posted by MasterBlaster Here's a question for the forum: How much should your net-worth be for you to self-insure LTC and forego any insurance policies ?

its not about net worth as much as it is lifestyle effected...like the old its not how much you make its how much you save..origionally we were going to self insure...we would sit 300,000 on the side in a conservative investment and not figure it in our lifestyle planning..this way it wouldnt effect the remainings spouse's ability to pay bills and survive without living in poverty ... worst case was the surviving spouse would get it or the kids if it wasnt used ....we are still undecided what to do but we just may take some kind of catastrophic insurance

[Brat]

To the senile dementia I would add Parkinson's, MS, and Altzheimer's... particularly in combination with brittle bones. Don't forget head injuries (motor cycle accidents). Any condition that can make you unable to shower, toilet, transfer without help.

Sheryl, I know it seems expensive, but I would keep that policy if you might develop any of the above.

[Sheryl]

Well, anyone might develop one of the above, but I seem to have settled in with a group of diseases that are more chronic but less disabling. Still, if it stays in the same price range I would probably hang onto it - they have four years that they can't raise the price, after that, we will see.

[oldcrowcall]

I would not assume the feds group LTC is cheaper than individual. If you are in good shape, under 60 with good family history, you should do better with an individual policy.

[mathjak107]

Average stay in a home in new york is 120-140,000 per year .There is a survey here they publish in the newspapers every year comparing year after year at all the local nursing homes.we need a plan that pays 350a day here in new york.Heres a sample plan and rates
350 a day 5% compound inflation protection, 5 years ,180 day elimination period. $5103.00...20% discount for spouse. this is with john hancock

[mathjak107]

we had quotes up to 6,500.00 for 400 a day ,90 day elimination ,and instead of them paying your bills they pay you the amount per day and you pay the bills .the ones that pay you are more money as you get that amount per day regardless of what the bills are.That quote was from met life

[2B]

Quote:

Originally Posted by mathjak107 Heres a sample plan and rates 350 a day 5% compound inflation protection, 5 years ,180 day elimination period. $5103.00...20% discount for spouse. this is with john hancock

I am assuming that this plan pays $350/day and increases up to 5% per year based on some measure of inflation. The coverage would also be for up to 5 years after 180 days of confinement without any benefits. The cost for this plan is $5103 per year for one person and the spouse can be covered for $4082 per year. What's missing is how old the person covered is now and soon the premium can be raised and if there is any limitation on how much it is raised.

Quote:

Originally Posted by mathjak107 we had quotes up to 6,500.00 for 400 a day ,90 day elimination ,and instead of them paying your bills they pay you the amount per day and you pay the bills .the ones that pay you are more money as you get that amount per day regardless of what the bills are.That quote was from met life

The same questions here. You also didn't list how long the coverage would be for. The coverage of $400 per day is pretty rich by my humble Texas standards -- $140 is a real nice place.

[mathjak107]

yes 5 years is the coverage ,im 54* and my wife 56,no info pertaining to raises.The scarey part is the raises that can happen.

[Brat]

In some contracts there is a 'bucket' of money. If your care costs less than the daily contract rate it lasts longer.

[FIRE'd@51]

Like Brewer, my biggest concern is what exactly are you buying when you buy LTC?

If we look at health insurance as a possible guide for premium increases - well, everyone knows what's happened there.

Also, how do the risk pools work? With individual health insurance, healthy participants usually leave to purchase a cheaper policy from someone else, leaving the remaining folks in the pool to bear even higher premium increases. This spiral continues until finally the insurance company decides to pull out of the market altogether and cancels all the policies in that group. Could this happen with LTC? And even if it couldn't, what happens to the policy-hoders of a company that miscalculated the costs? Does it go belly-up? Either way the policy holders are left high and dry; and if their health is failing they almost certainly will be rejected by another carrier.

[samclem]

Quote:

Originally Posted by FIRE'd@51 Also, how do the risk pools work? With individual health insurance, healthy participants usually leave to purchase a cheaper policy from someone else, leaving the remaining folks in the pool to bear even higher premium increases.

I don't believe this will happen as readily with LTC policies carrying "inflation protection." With these policies, you lock in the rate for your age, and it doesn't go up. It is very expensive for an insured individual to change his mind a few years later and buy a new policy. The rates would be higher due to higher age and the inflation that has taken place. Plus--lower rates MIGHT mean a less financiallly stable insurance company--a bigger factor in LTCI than in health insurance.

Quote:

Originally Posted by FIRE'd@51 If we look at health insurance as a possible guide for premium increases - well, everyone knows what's happened there.

My guess is that LTC costs will go up, but not skyrocket like health insurance has gone up. Increased "debilitated" longevity will increase costs, but there are unlikely to be any technological advances that wil increase the cost of walking Grandpa to the toilet.

Quote:

Originally Posted by FIRE'd@51 . . . what happens to the policy-hoders of a company that miscalculated the costs? Does it go belly-up? Either way the policy holders are left high and dry; and if their health is failing they almost certainly will be rejected by another carrier.

The comapny raises their rates for that class of insurance--it can be done with the approval of state insurance commissions. Higher premiums for the insured but hopefully better than being without coverage at all.

[outtarentals]

I started buying LTC insurance in my mid 50's - a policy with all the bells and whistles - inflation guard, unlimited time period etc and maybe it was overkill - but hindsight is 20/20. In those 14 years, the monthly premium has increased several times from $95 to $129. The company seems to be a good one and I have the premium deducted from my checking acct automatically each month and never give it a thought. It is like buying my house, car, rental and umbrella policies and hopefully I won't have to use it, but I buy it for peace of mind and so I won't be a burden to anyone. I wouldn't want to be starting to buy it now though - it would be too expensive.

At the time I purchased this policy, I believe there was a time limit for taking LTC premiums as a tax deduction and my accountant at the time advised me to get in fast. I may be wrong, but I believe that has recently changed - but only if the total medical, dental, prescription medicine, eyeglass, etc expense for the year is 7.5% or more of adjusted gross income.

I have Medicare and Tricare for Life - so I'm one of the very lucky ones there, but I'm considering dis-enrolling from Delta Dental which charges me $42.70 per month for a max payout of $1000 in benefits plus a free cleaning and one set of Xrays. Some years I don't use anything but the cleanings and x-rays and so far have never exceeded the $1000, though a crown these days costs $900 each.

[retiringby50]

Wow, one more thing to think about. I'm guessing we will self-insure. My mom fell into a coma and was in a LTC facility for about three weeks before she passed away. Her catastrophic insurance plan paid for it. My dad died at home at age 93; we hired a person to live with him for his last 3 1/2 years (cheaper in our case because we were able to hire a recent LEGAL immigrant who needed work and spoke his/our language). If we didn't, he would have needed assisted living at about $150/day which would have cost about $192K, still something that he could have paid out because we would have probably ended up renting out his home.

[chinaco]

DW and I each have a policy. Got it through the Mega Corp as a benefit in Group plan. The policies remain in the group plan if one separates from the Mega Corp.

The cost is about 1/3 of the cost of an individual plan. (I got a quote).

If the cost of our LTC policies were much higher, I think I would consider Rich's idea. It is worth a cost/benefit analysis. Especially if one has assets. The life policy will replenish the survivors funds.

No matter how you cut it, Insurance on an individual basis is expensive.

[oma]

Quote:

Originally Posted by samclem Right, John Hancock and Metlife still underwrite the federal program. The program for federal employees/military is a huge pot of customers, and what i meant to say is that there are some benefits of being part of that huge pot--the rates can only go up if they raise rates for everyone, and if either of these companies were to pull out of the biz, I think there'd be a big effort to fill the void. For those interested, here's a link to the federal OPM LTC Insurance Program rate calculator. https://www.ltcfeds.com/ltcWeb/do/as...needs/ratecalc Even folks who don't qualify for the federal program might want to see how the rates they've been offered stack up, and how the premiums change if they wait. As we covered in a previous conversation, the "inflation protected" premium plan is a little confusing. If you select "Automatic Compound Inflation Protection" (ACIP) then the premiums never change at all--a 5% annual escalation in the benefit is already built in. If you choose the "future purchase option" (FPO) then every two years you can buy more insurance to keep up with inflation. Here's the catch: Under the FPO plan you'll be buying insurance coverage for somebody who is your present age at that time. This resuts in skyrocketing premiums just when you are most likely to need the coverage. If we do end up buying insurance, I'm sure to buy the ACIP plan. To keep costs low, we'l probably buy just $125 per day coverage for 3 years each. That can be stretched to cover a longer period if we can use less expensive home care. The coverage period might also give the non-incarcerated still healthy spouse a chance to shelter at least some assets and stave off financial ruin while the affected spouse eventually qualifies for Medicaid (I think there's a 3 year lookback period now). Combined cost for both of us for this minimalist plan is approx $130 per month because we are fairly young. That premium is not supposed to jump. In the future, we'd be paying with inflation-reduced dollars, so the real bite goes down in later years. Still, $130 every month isn't peanuts--that's a lot of beer and pizza. Given the low-likelihood that we'll need it, I'm very tempted to just assume the risk. But--would I really be taking the risk, or am I passing it to my daughter? Definitely not an easy decision for us.

I think I'll dish out the $123/mo for a single payer under the plan you describe. I, too, plan on the ACIP. Outstanding post!

[freebird5825]

Quote:

Originally Posted by oma I think I'll dish out the $123/mo for a single payer under the plan you describe. I, too, plan on the ACIP. Outstanding post!

hi
i never saw the longer post by samclem before. glad you commented on it. TY.

i have Fed LTC, and second the motion to get the ACIP.

i signed up at age 46 (3 yrs ago) and took the minimum 30 day wait period, ACIP, and a higher weekly benefit (vs a benefit based per day). my premiums are $151 per month, for life. they may be higher now.

the options can be confusing. do you have a personnel specialist who knows LTC who can help?