Anybody Here Own LTC (Long Term Care)

[unclemick]

Hmmm - dumb question.

If people can now go overseas(Thailand,India,Mexico??) and do medical 'on the cheap' so to speak - is LTC there yet?.

If not - why not?

heh heh heh

 

[Rich_by_the_Bay]

R-in-T,

That is the nature of insurance.

I realize I didn't make myself clear. In the case of LTC of course you hope you never have to use it. But with the whole system so murky just a few years into the future, even if you do have to use it it may well be inadequate or unnecessary or the premiums may rise so fast and high given the uncertainties that you feel you can't afford it, and you stop with nothing to show.

Unlike life insurance where dead is dead, LTC may transform into any number of unpredictable scenarios; carriers may be forced to change terms or premiums just to stay afloat with runaway costs or technologies. If you don't feel like keeping up with them passing these along in the form of skyrocketing premiums, you have lost both future protection and past premium. Uncertainties and risks cannot be avoided, but in this arena, the uncertainties and risks are chaotic and not actuarial.

I don't know that there is any right answer, but I feel likes I'd be playing a game whose rules I don't know and which might change markedly at any time. No thanks.

 

[Nords]

I'll stick with trying to save the biggest nestegg I can and hope for the best. Big risks either way.

Those premiums won't seriously impact my FIRE lifestyle but the cost of uninsured years in a nursing home for either me or DW would certainly have a very severe impact. Therefore, I gladly pay the premiums.

I don't know that there is any right answer, but I feel likes I'd be playing a game whose rules I don't know and which might change markedly at any time. No thanks.

All excellent points, and a pretty strong incentive to sit on the sidelines for another decade or two...

 

[samclem]

I think that the federal insurance is actually written by John Hancock & Metlife, but that could have changed in the last few years.

When I offered my Dad the chance to buy the federal LTC insurance two years ago, it turned out that he had a better deal directly from Hancock.

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/assessing_your_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.

 

[Outtahere]

I've thought about buying LTC for my dh since he's 12 years older than me. I worry that something will happen and he'll wipe out our funds, if we were closer in age and I don't think I'd worry so much.

 

[honobob]

REWahoo

You've changed my paradigm!   When I bought my LTC I bought for life.  That was my commitment.  That's usually how I make a decision but it makes you bite off the whole thing at once.  Makes the decision harder.

You've basically made a term life insurance decision for LTC that I had never considered.  So if 10-20 years down the road I don't like the deal or decide that a rental property would serve better use as my LTC backup then I'm free to cancel, or keep the benefits that I locked in at a much younger/better health time.

You've covered yourself during a period when an event, altho unlikely, could have a potentially devastating impact on all your past and future plans.  I'll have to refer to your concept whenever I'm making the big decision.

Grumpy

Very concise post on the nature of insurance.

This is what I enjoy most from this forum.

 

[jclarksnakes]

....This thread is another one here on the forum that makes me thankful that I am retired military. Tricare For Life covers almost everything related to LTC.
jc

 

[Nords]

....This thread is another one here on the forum that makes me thankful that I am retired military. Tricare For Life covers almost everything related to LTC.

JC, that's a research project I haven't started yet and we were already more or less on the self-insure path. However you've piqued my curiousity.

If TFL covers everything related to LTC then why does the federal govt offer their insurance? Is it intended mainly for civil service?

More to the point, do you have a TFL link that explains what LTC they offer? (I've already been traumatized by my visit to Tripler's VA wing and I'm not repeating that process.) You'd think that all of TRICARE's reimbursement cutbacks would have hollowed out any LTC benefits.

 

[samclem]

....This thread is another one here on the forum that makes me thankful that I am retired military. Tricare For Life covers almost everything related to LTC.
jc

jc,
I wish it were true--but it's not. TFL covers about what Medicare covers, which is almost nothing

From the site of the Army Medical Center at beautiful Ft Hood:
http://www.hood-meddac.army.mil/default.asp?page=t4l_myths&vi=n&mnu=0


"Myth #8: "TRICARE For Life will pay for long-term nursing care services, so I won't need long-term care insurance."

Reality: TFL does not cover long-term custodial care. Medicare and TRICARE cover certain "medically-necessary" skilled nursing care either in a Skilled Nursing Facility (SNF) or at home. Such services are very different from long-term care services. SNF care may be needed following a period of hospitalization for rehabilitation or for stabilization of a condition. Long-term care, also called "custodial or personal care", is for people who require permanent assistance in activities of daily living, such as eating, bathing, dressing and physical movement. Beneficiaries are solely responsible for paying for custodial services. Beneficiaries desiring such coverage may want to purchase long-term care insurance, but they will have to meet certain "medical underwriting conditions" as determined by an insurance carrier."

 

[2B]

When my MIL had surgery, USFHP paid for 120 days of skilled nursing care and a few sessions of physical therapy. She's been in a nursing home now for over a year and it is now all out of their pocket. My FIL has Alzheimer's and is in assisted living. There is no USFHP benefit for him either.

I will say USFHP is a fabulous medical benefit. Since DW and I are managing their assets, their medical costs are almost nothing. USFHP appears less flexible than Tricare but it has much lower copays.

For all you ex-military folk, why would you take Tricare over USFHP?

 

[Alan]

We have LTC insurance but hope to be able to cancel once we have enough money to affectively self insure. We each pay $800/year and took out the policy 5 years ago, but if all goes to plan and we RE in 4 years we should have enough to not need the insurance. We have a couple of young relatives who needed, and may still need nursing home care so we decided a little extra insurance was worth the peace of mind.

 

[samclem]

I will say USFHP is a fabulous medical benefit. Since DW and I are managing their assets, their medical costs are almost nothing. USFHP appears less flexible than Tricare but it has much lower copays.

For all you ex-military folk, why would you take Tricare over USFHP?

I'd never heard of USFHP. From the web site, it looks like they primarily cover NY state.

 

[2B]

I'd never heard of USFHP.  From the web site, it looks like they primarily cover NY state.

I think it's for military retirees only and I know it works in Texas.

 

[Brat]

DH & I purchased LTC (paid up in 10 years couples contract) just before he turned 60, before OPM offered their program.  It is our take that modern medicine often prolongs the dying process - the odds of us needing some kind of care are high.

Here is my take on long term care: about 80% of the residents are women who survived their husbands after caring for him at home.  If you want care options and only can aford to insure one, insure the wife.  The best return on investment is the longer wait period, because you want to insure against depleated assetts.  Always buy the 5% compounded benefit.

The advantages of couples buying young is that if one becomes disabled the spouse won't need to quit work to care for the other.  Frankly, were I a young couple I would buy for both until retirement approached, then drop the husband's policy.  It is my observation that most men fail relatively quickly after needing care.

 

[honobob]

It is my observation that most men fail relatively quickly after needing care.

As a member of the weaker sex I resemble that remark. Did you stop to think that maybe we just missed our DW's great care and would rather die than put up with inferior care? Are we not the sacraficing/appreciative sex?

Otherwise, Great Post!

 

[jclarksnakes]

.....SamClem is exactly right and I was wrong. Tricare for life does not cover extended care. It does cover skilled nursing facility care though. It was not very long ago that I visited the Tricare website and saw some very different information than what is there now. http://www.tricare.osd.mil/Factsheets/viewfactsheet.cfm?id=258
I am going to have to rethink this issue though my gut feeling is that I would rather be dead than living in a nursing home.
jc

 

[2B]

Tricare for life does not cover extended care. It does cover skilled nursing facility care though.

There is a 120 day limit to the Tricare skilled nursing.

 

[audreyh1]

It seems like $500K in todays dollars would easily cover several years of nursing home stay. So if you could afford to deplete your nest egg by that amount without lowering the standard of living too much for the surviving spouse, then you can self insure.

Of course it depends on what part of the country you live. Yet another reason to avoid areas of the country where the cost of living is high.

Then the surviving spouse has the whole rest of the nest egg to pay for LTC if necessary - if you are in LTC, what else are you going to spend money on? - nothing.

Audrey

 

[Brat]

It is my observation that most men fail relatively quickly after needing care.

As a member of the weaker sex I resemble that remark.  Did you stop to think that maybe we just missed our DW's great care and would rather die than  put up with inferior care?  Are we not the sacraficing/appreciative sex?

Otherwise, Great Post!

Perhaps I didn't state my observations as well as I should.  Almost every resident of an assisted living or nursing home establishment were cared for at home initially. The healthier spouse cares for the frail spouse.  It is more often the case that the eldest becomes frail first, most wives are younger than their husbands.  Men are most often moved to a care facility when the wife cannot transfer them from bed to chair/toilet - and most people don't live long once they reach that condition.  Just guessing here, six months might be 1.5 StD.

There are more widdows than widdowers.  When a widdow becomes frail there is no spouse at home to care for her.  She must either move in with the kids, receive care at home that is managed by the kids (note comments of others in another thread), or move to a group living situation.  That is when LTC insurance provises options.

This life process is exactly why DH and I plan to move to a continuing care community when he is in his mid 70s.  Social networks are important to healthy living.  Each move from one level of care to another trims that network. 

 

[audreyh1]

There are more widdows than widdowers.  When a widdow becomes frail there is no spouse at home to care for her.  She must either move in with the kids, receive care at home that is managed by the kids (note comments of others in another thread), or move to a group living situation.  That is when LTC insurance provises options.

It seems to me that the benefit of LTC insurance is to protect the nest egg against the first spouse's needs. The remaining spouse can deplete the nest egg for LTC. LTC insurance only helps if the cost of LTC is much higher than the annual income provided by the nest egg.

Audrey

 

[brewer12345]

Personally, I think that anyone who bought LTC insurance 5 or so years ago got a good deal, assuming that the company will still be around to honor the deal and doesn't jack premiums to the moon. To buy it now? I think you'd either need to have your head examined, or you'd have to have so much money that it would be a waste of time to fool with LTC insurance.

 

[saluki9]

Personally, I think that anyone who bought LTC insurance 5 or so years ago got a good deal, assuming that the company will still be around to honor the deal and doesn't jack premiums to the moon. To buy it now? I think you'd either need to have your head examined, or you'd have to have so much money that it would be a waste of time to fool with LTC insurance.

I'm guessing you don't know anybody who has had to use theirs?

Count me among those who need their head examined : I've been witness to too many fortunes drained by expenses that could have been avoided with LTCI

 

[brewer12345]

I'm guessing you don't know anybody who has had to use theirs?

Count me among those who need their head examined   :  I've been witness to too many fortunes drained by expenses that could have been avoided with LTCI

If you need LTC, you have to pay for it. That can be done via your checkbook, or via insurance. I've spent enough time dealing with the largest writers of LTC insurance and some of the biggest former writers of LTC insurance to form an opinion of the "paying with insurance" option.

 

[saluki9]

If you need LTC, you have to pay for it. That can be done via your checkbook, or via insurance. I've spent enough time dealing with the largest writers of LTC insurance and some of the biggest former writers of LTC insurance to form an opinion of the "paying with insurance" option.

And I've spent countless hours working with clients to liquidate tens of millions of dollars that have gone towards long term care.

As trustee on a family trust I have signed well over $1,000,000 of checks to pay long term care expenses for my grandmother that could have been avoided by a $5K annual premium.

 

[Rich_by_the_Bay]

Saluki,
You have personally seen "too many fortunes drained by expenses that could have been avoided with LTCI?" I understand your reasoning and concerns, and if you can afford the premiums perhaps it provides peace of mind, like insurance is supposed to do. But I have not often observed what you describe. Fortunes drained, yes. But prevention of this by LTC? Not often; slowing the "drainage" perhaps, but rarely prevented.

Benefits of $100 a day or more may still leave considerable unpaid expenses which will likely only worsen. The "gap" alone can drain an average nest egg pretty quickly; LTCI will partially mitigate that of course, but compared to the opportunity cost of years or decades of premium payments, it is not so clear. And like term life, the premiums will rise with age until often the buyer just can't justify it and they drop the policy after years of premiums, when they are most likely to benefit from it. Future costs and gov't coverage for LTC? Totally unknown and unpredictable, but probably not good news.

While I don't know the right answer for anyone (including myself), but I don't think it's quite the slam dunk. I've elected not to buy LTCI, trusting that if the need arises it'll be a sad swap between your FIRE money paying for the leisurely lifestyle you had hoped for, versus the high cost of a 3-year stay in a nursing home. More of a probability-based decision factoring in how much you have rather than one to make based on anecdotes. If it turns out to be one of the rare cases of a 10 year NH stay, everyone loses (even with LTCI) and it collapses into Medicaid.

Just food for thought.