Anybody Here Own LTC (Long Term Care)

[packrat44]

Are any of the retired military personnel familiar with what Tricare for Life covers in relation to what a typical LTC policy covers? :confused::confused::confused:

[oma]

Long-term care and any other service provided to assist a person with eating, dressing, bathing or performing activities of daily living, are not covered benefits under Medicare, under Medicare, TRICARE or TRICARE For Life. Whether the care is performed in a nursing home, assisted living facility or at a beneficiary's home, neither Medicare nor TRICARE will cover the cost of providing LTC. The cost of LTC coverage may vary and must be borne by the patient or through private long-term care insurance. To qualify for LTC benefits, most insurance carriers require that a person need assistance with at least two ADLs.
Long-Term Care Insurance Programs
As a result of fiscal year 2001 legislation, Congress authorized the Federal Long-Term Care Insurance Program (FLTCIP), sponsored by the Office of Personnel Management (OPM). Persons eligible to purchase LTC coverage provided by the government include: active duty and retired members of the Uniformed Services, certain members of the Reserves and their family members; employees of the federal government and their spouses, parents, step-parents, parent-in-laws and adult children. Additional information on federal long-term care insurance is available at Federal Long Term Care Insurance Program Home Page or by calling (800) LTC-FEDS or (800) 582-3337.

[jIMOh]

Is LTC similar to life insurance in that you must pay it every month until you need it (or policy lapses)?

[jimnjana]

Great discussion. Here is another take on funding LTC without having LTC insurance. My wife applied for the Fed program and was denied coverage. So, I don't think she will qualify under another program (perhaps at a premium cost). Our plan is that between her retirment pay, disability, social security and expected increases over the years, she will have an approx $150 a day "self funded" coverage(adjusted to inflation). In addition, I have purchased about $150K of whole life insurance thru the Army Airforce Mutual Aid Assoc. They have a LTC settlement option that allows for a 2.5% of policy value per month to cover LTC costs.

I'm planning on applying for coverage under the fed program in a year or two but there is a good chance that I will be denied coverage as well. If this happens then our back-up plan is similiar to the one I described for my wife. The unknown factor is to what extent LTC costs will exceed COLAs.

Purchasing whole life insurance is not something that I would necessarily recommend to someone, but the AAFMA insurance product is the best that I have found and it is allows for some peace of mind in our situation.

link to buyers guide: http://ltcpartnership.sd.gov/docs/LT...ide%5B1%5D.pdf

Jim

[grumpy]

To update a very old thread:

After having the LTC policies from CNA for 13 years we have just received our first notice of a premium increase. Both policy premiums are going up 15% ($116 increase per year for DW and $148 for mine). The combined premium for the two policies is now $2036. I still consider this a very reasonable price for the amount of coverage we would receive.

[Nords]

As long as we're updating:

In Dec '92 my father purchased $100/day of LTC coverage from John Hancock with a limit of $120K. It included a 20-year rider of 5% annual inflation. The semi-annual premium was $304.47.

He paid those premiums through this month, when we expect his claim to be approved. When I filed the claim last month, JH proclaimed the inflated coverage to be $241/day with a $288K limit. After much poking & prodding they "discovered" that the inflation rider will continue to accrue through its full 20 years, raising the total coverage by Dec 2012 to $265/day and $318K. The care facility is currently charging $214/day (in a major western city) and we expect them to still be below $265/day by the time the total coverage limit is reached.

So over the last 18.5 years my father paid just over $11K of premiums for $318K of coverage. I'd be astounded if that was available today, but perhaps $50K of premiums is not out of the question.

Inflation riders seem to be worth the price, too.

I've been told that there are tax deductions for long-term care benefits, too, so the total cost of this policy may be even lower. That's my next research project for Dad's 2011 tax returns.

[chinaco]

Quote:

Originally Posted by Nords As long as we're updating: ....

It sounds like your father had the foresight to not want to burden his family with that issue.

Many of us that buy LTCi are hoping we will not need it and perhaps the other guys uses our premium (at least, that is my goal).

But when a family is confronted with this sort of crisis, it sure seems like it was a good idea!


Thanks for posting.

[jIMOh]

In Ohio, there is a law which states long term care preserves a portion of your estate. For example if you have a benefit of $300/day for 3 years (3*365*$300=$328,500) then you have to spend your estate down to $328,500 and then medicaid kicks in after that.

So if portfolio was $1 M (drawing 4% SWR...)
LTC would cover the first $328,500
then you would spend the $1 M down to $328,500
then medicaid pays for the nursing home
and your beneficiaries can inherit $328,500

Do other states work this way?

I have also heard some variable annuities have long term care riders (limited underwriting)- anyone familiar with those?

Thx.

[grumpy]

Just did the calculation on the 5% escalation of benefits on our LTC policies. Policies originally covered $100 per day in nursing home with no lifetime limit. That has grown to $208 per day ($75920 per year). As I live in a high cost area that might not cover the full yearly costs but should take care of the bulk of it. The rest could easily be covered out or our portfolio.

[Nords]

Quote:

Originally Posted by grumpy Just did the calculation on the 5% escalation of benefits on our LTC policies.

The human heuristically-thinking brain just doesn't appreciate the power of compound math, and 5% compounds pretty darn quickly.

I think the inflation rider is the most important part of my father's LTC policy, and also the part that wipes out the insurance company's profit margins.

Although I don't have enough experience (yet) or data to confirm this claim, my father's care facility says that their fees have about 2% inflation because they're in a large metropolitan area with lots of competition. Their billing & documentation is certainly far more advanced (and responsive) than John Hancock.