13 Years in Long Term Care by AALTCI

[capjak]

Not sure I would want to spend 9+ years in LTC:


"Insurers told AALTCI of one male policyholder who has received about $1.6 million in LTCI benefits, over a period of 9 years and 10 months.

The man paid $4,474 per year for the coverage, and he paid premiums for just 6 years and 6 months before he filed a claim.

The female with the largest known claim has received a total of $2.6 million in benefits over a period of 20 years and 9 months.
She began collecting benefits when Bill Clinton was president.

Her policy cost $2,600 per year. She paid premiums for 13 years and 9 months before her claim began, according to AALTCI data.x"


https://www.thinkadvisor.com/2018/04/26/aaltci-updates-tales-of-long-term-care-insurance-c/

 

[pb4uski]

Those numbers make no sense:

$1.6m divided by 9.833 years is $163k a year.
$2.6 million divided by 20.75 years is $125k a year.

Do people really buy policies with such high benefits? Sounds like a lot of spin to me.

 

[JoeWras]

Those numbers make no sense:

$1.6m divided by 9.833 years is $163k a year.
$2.6 million divided by 20.75 years is $125k a year.

Do people really buy policies with such high benefits? Sounds like a lot of spin to me.

Not anymore, but there was a time...

 

[pb4uski]

Keep in mind that those would be averages over the last 10 years and 21 years, respectively....NFW.

 

[capjak]

Keep in mind that those would be averages over the last 10 years and 21 years, respectively....NFW.

You can still buy policies with unlimited benefits so that part is possible even today. However the cost of care seem fishy, however I think I have seen where someone was a paying $10,000+ per month for a spouse in nursing home reported boglehead forum

Edit: I found it on the forum it was a reported nursing home for a relative at $12,000 per month so $144,000 per year so I guess it can happen.

 

[pb4uski]

Yes, but if those were averages they would have to be the annual amount paid 5-10 years ago... seems very fishy and self-serving. Doesn't pass the smell test.

But OTOH, an association of insurers wouldn't possiblt try to mislead us would they?

 

[upset264]

You can still buy policies with unlimited benefits so that part is possible even today. However the cost of care seem fishy, however I think I have seen where someone was a paying $10,000+ per month for a spouse in nursing home reported boglehead forum

Edit: I found it on the forum it was a reported nursing home for a relative at $12,000 per month so $144,000 per year so I guess it can happen.

My fathers bill at a nursing home in Connecticut for January 2016 was $13,020.
That's room, board and basic care. No extras. Payable monthly, in advance.

 

[Dtail]

Yes, but if those were averages they would have to be the annual amount paid 5-10 years ago... seems very fishy and self-serving. Doesn't pass the smell test.

But OTOH, an association of insurers wouldn't possiblt try to mislead us would they?

Hey there.
Just checked and my mothers policy yearly payout would be 125k and she is paying 7.7k yearly in premiums. The amount of payout is unlimited.
The policy was bought in 2002.

 

[Newventurer]

Yikes! Mom’s assisted living care, level 2, is $56,400 a year, $36,000 a year max paid by her LTC policy, which we are very grateful she bought. Nursing home level of care sounds almost unbeleivable, to the point you could almost pay a full time person for individual care it seems.

 

[MichaelB]

Yes, but if those were averages they would have to be the annual amount paid 5-10 years ago... seems very fishy and self-serving. Doesn't pass the smell test.

But OTOH, an association of insurers wouldn't possiblt try to mislead us would they?

+1

At the very least, we need some more information. For the numbers to be that high there has to be some exceptional circumstance.

 

[donheff]

My LTC plan maximums are a little over $200K/yr for an unlimited period. Originally, the daily limit was higher than currently but as the program proceeded the premiums were increased to a prohibitive level so I dropped it back to a still reasonably high but more affordable level. The new premiums have been stable for quite a few years -- we shall see.

 

[CardsFan]

+1

At the very least, we need some more information. For the numbers to be that high there has to be some exceptional circumstance.

Following some of the links in the original article, I found this: https://www.thinkadvisor.com/2018/04/10/group-defends-stand-alone-long-term-care-insurance/

According to this, in 2017 the industry paid out $9.23B for 295,000 claims. So the average claim, last year, was about $31,300 per year per claimant. So, yeah, the numbers cited in the original article sound like major outliers, considering they cover a 10-20 year time frame.

I don't suppose this lobbying group is going to publish how much the insurers take in every year, or how many people never make a claim.

 

[bigcmagor]

Yikes! Mom’s assisted living care, level 2, is $56,400 a year, $36,000 a year max paid by her LTC policy, which we are very grateful she bought. Nursing home level of care sounds almost unbeleivable, to the point you could almost pay a full time person for individual care it seems.

The problem with hiring 24/7 caregivers to provide care in Mom's own home is that you would need four of them, which makes $56,400 seem like a bargain.

 

[Newventurer]

The problem with hiring 24/7 caregivers to provide care in Mom's own home is that you would need four of them, which makes $56,400 seem like a bargain.

I agree, my comments were in regard to the amount others are paying for nursing home care.

 

[athena53]

I don't suppose this lobbying group is going to publish how much the insurers take in every year, or how many people never make a claim.

No, but it's pretty well-documented that LTC insurance has been a losing proposition for insurers and the vast majority of insurers have exited the market. They don't do that when the market is profitable.

 

[pb4uski]

+1 if it was lucrative then the first-tier insurers would be jumping back in.

 

[CardsFan]

No, but it's pretty well-documented that LTC insurance has been a losing proposition for insurers and the vast majority of insurers have exited the market. They don't do that when the market is profitable.

Understood. But the market must be profitable for some, or they would have ALL gotten out. I assume that those that are left have a better handle on the actuarial risks than they did 40+ years ago when these policies were first marketed.

 

[pb4uski]

Well. they think that they do.

 

[ncbill]

The amounts hopefully reflect that those policies also covered home care and so most of the care they received was at home.

Though older policies could restrict payment to just institutions.

IIRC, from reading posts from agents over on bogleheads, newer (& much more expensive( LTCi policies must also cover care at home, not just in an institution.

 

[MrsHaloFIRE]

The problem with hiring 24/7 caregivers to provide care in Mom's own home is that you would need four of them, which makes $56,400 seem like a bargain.

Also, you end up running a payroll office, an HR office, and at times a taxi service to get carers there 24 hrs if you do it yourself. Or pay through the nose to a private firm to do the staffing portion.

 

[athena53]

Also, you end up running a payroll office, an HR office, and at times a taxi service to get carers there 24 hrs if you do it yourself. Or pay through the nose to a private firm to do the staffing portion.

This would add up! Two years ago when DH was in his last days I used a private firm when I needed to be out of the house for an extended period. They charged $22/hour and this is a LCOL area. They were very good- would do light housework, laundry, fix meals, etc. Very expensive, though, if you needed them 24/7.

 

[pb4uski]

But it is rare that you need 24/7 coverage... when you get to that point then a nursing home is the most cost-effective answer.

 

[LARS]

But it is rare that you need 24/7 coverage... when you get to that point then a nursing home is the most cost-effective answer.

When you need 24 hr the most cost effective is hopefully Assisted Living.

Personally (and it is a personal thing) if I ever need 24 hr care in a Nursing Home setting (other than perhaps a very short stay) the "most cost effective" answer for ME is Death sweet Death.

IMHO way too much warehousing of flesh in horribly, miserable nursing homes.

So to my mind I don’t worry much about Nursing Home outrageous costs notwithstanding we could pay them if we had to...

 

[pb4uski]

I think have different definitions of assisted living. When you need 24/7 care... it is nursing home... and I agree with you... they are generally dismal places.

...Our research suggests that many families believe they need nursing homes for their ailing older loved one when in fact assisted living is the most appropriate option. An assessment by an Advisor or medical professional is the best way to determine the care type needed, but some general distinctions can be drawn between assisted living and nursing homes. For instance:

• Assisted living residents are mainly independent but may need help with daily living personal care tasks such as bathing and dressing, while nursing home residents tend to need 24-hour assistance with every activity of daily living
• Assisted living residents are mobile, while those who are bedridden require nursing homes
• Nursing home residents generally have a single or semi-private room, while assisted living residents typically live in a studio or one-bedroom apartment
• Nursing home residents require fully staffed, skilled nursing medical attention on a daily basis, while assisted living residents are more stable and do not need ongoing medical attention

https://www.aplaceformom.com/blog/things-you-didnt-know-about-assisted-living-2-19-2012/

 

[LARS]

I think have different definitions of assisted living. When you need 24/7 care... it is nursing home... and I agree with you... they are generally dismal places.



https://www.aplaceformom.com/blog/things-you-didnt-know-about-assisted-living-2-19-2012/

Note my use of "hopefully" in my original post!

We were fortunate with my parents. Notwithstanding they needed 24 hour care (Memory unit) that care didn’t extend to being bedridden, feeding tubes, etc. where Nursing Homes begin and most Assisted Living ends.