Edelman - Change in thinking about LTC insurance

[athena53]

Continuing to self insure. If we can't cover potential costs given net worth then neither will 99% of the country.

Same here-and some nursing homes are willing to take you if you have enough to self-pay for X years and then will accept Medicaid. I'd be darned skeptical of that promise but do know at least one person who said her mother had that deal and they kept their word. I figure I'll be better off than people who have Medicaid only, or LTC coverage that covers only a fraction of the costs.

 

[mathjak107]

Everybody needs to make up their own mind and it's sounds like you did want you wanted/needed. For us though, I hated the use it or lose it aspect of a standalone LTC policy. With a LTC rider, the cash and or the death benefit is still there if you don't use the policy.

years ago money magazine did a story on my wife and i . they wanted to pit me and my do it yourself planning against their team of pro's .

the one area we differed is on self insuring ltc.

i wanted to self insure and they were against it for lots of reasons .

i realized they were right .

there were just so many negatives to it as well as the fact most folks really do not self insure .

they just have their portfolio invested as it always is as the money is all lumped together and worse is counted as part of the income stream .

don't forget a safe withdrawal rate assumes that income can drive the balance left over to near zero .

on top of which a sudden need for that money may find markets have a substantial piece gone , or gains did not keep up with inflation or you just don't have enough saved .

what happens too is the stay at home spouse goes in to survival mode and money that should be spent on better levels of care now begins to have 2nd thoughts attached .

we use one of the most popular estate attorneys in nyc and long island and the bulk of his cases are the so called self insurers who just had reality dropped on them and now the stay at home spouse is in panic mode .

self insuring , really means setting a side a large sum of money , safe and secure as an insurer would where it is always there and ready and not in the income stream and that means low returns .

the math said that the average returns we get being able to invest normally and taking a policy instead would actually pay for the policy and provide more left over then self insuring would .

what really was the deal maker was the perks after the insurance ran out .

we have 100% asset protection with no asset shifting , a special form of medicaid picking up the bills as long as it is accepted by the home and most important no income limitations for the stay at home spouse .

it can be great you preserved a million bucks in assets , but now try having the stay at home spouse living on it if medicaid is needed . you can't , as they will normally take everything over your states max allowed .

we have total asset and income protection with our partnership plan . as long as the premiums are manageable by us we will kweep it going .

if not , well we were covered up to that point . my co-worker had a stroke at 55 and his stay at home spouse is now impoverished . so it isn't like you are paying for the future only .

 

[tps7742]

Doctors view end of life scenarios differently than the general population:

How doctors die. It’s not like the rest of us, but it should be – Cancerworld



emphasis added

Thanks for sharing this was a very interesting article allot of could learn from IMO. But I guess the will to live usually over rides reality in several cases?

 

[samclem]

The benefits of the State Partnerships can really be a significant help to many of the folks on this board (who have assets that their spouse might need if the first spouse goes into LTC).

we have 100% asset protection with no asset shifting , a special form of medicaid picking up the bills as long as it is accepted by the home and most important no income limitations for the stay at home spouse .

So, like those of us who may be planning to shift assets and tough things out for the 5 year Medicaid lookback period, you still need to count on finding a nursing home that will accept the Medicaid rate, right? I don't know how big a problem that would be now, or how big it will be 2 or 3 decades down the road.
And as far as the "100% asset protection", your assets are protected (from being considered re: Medicaid eligibiliity and for post-death recovery of costs by the state) only up to the limit of the insurance policy you bought, right? That can still be very significant, but in most state partnerships of which I am aware, the only assets that are "protected" are those under the value of the LTC policy (e.g. buy a LTC insurance policy with $500K in benefits, then you can be eligible for Medicaid coverage once you've spent down your assets to the $500K level).

 

[mathjak107]

nope , our assets are protected unlimited . what you are referring to is a dollar for a dollar plan . that is where assets are protected only up to what medicaid spends .

in ny we have 2 plans available , dollar for a dollar which is cheaper or total asset and income which is what we have .

out of state our total asset plan would revert to dollar for a dollar so it really needs to be used here .

we have the total asset 3/6/50

http://www.nyspltc.org/expansion.htm

 

[samclem]

nope , our assets are protected unlimited

Thanks. I don't think that is available in many partnerships.

what you are referring to is a dollar for a dollar plan . that is where assets are protected only up to what medicaid spends .

That's not the way I understand it. It doesn't matter what Medicaid spends--once you've spent your assets down to the coverage limit of your policy and you've used up the benefits of the policy, then Medicaid starts making payments at their regular rate. This is the most common form of asset protection available through the LTC State Partnerships.

 

[mathjak107]

well read the above . that is not how it works for the ny total asset plan . we have two plan types available. dollar for dollar is the one you are referring to. total asset is covered regardless what is spent .

 

[mathjak107]

nice summary here :

" The original Partnership plan, known as a total asset protection policy, offers 3 years of nursing home coverage or 6 years of home care or assisted living coverage or any combination of the two. Home care and assisted living benefits are fifty percent of the selected nursing home benefit. If you exhaust the benefits of the policy and still need care, you can apply for Medicaid without having to spend down any of your assets.

Currently, an individual would have to spend down to approximately $14,200 in order to apply for Medicaid; the approximate spend down for couples is up to a minimum of $75,000 and a maximum of $115,000.
In addition to the spend down requirements, there are also transfer of asset rules known as the “look back” period and “penalty” period. According to the law office of Bertine, Hufnagel, Headley, Zeltner, Drummond and Dohn, “when an individual applies for Medicaid, Department of Social Services servicing the county in which the applicant resides will look back at the individual’s records for a five year period to determine whether any gifts were made.“

“If any gifts were made during the look back period, a penalty period will be imposed and the individual will be ineligible for Medicaid benefits for the duration of the penalty period. The length of the penalty period is always measured in months and it is calculated by dividing the amount of the gift by the average monthly cost of nursing home care for the area in which the applicant lives.”

Currently, there are three NYS Partnership total asset protection policies for which there are no look back or penalty periods. There is the original Partnership plan known as Total Asset 3/6/50 as well as Total Asset 2/4/50 and Total Asset 100. "


as far as income protection , at the moment they request you contribute 25% of the income over the medicaid limits for care but right now it is a request . even if it is made a mandatory 25% , 25% of a 6 figure income is a great deal compared to the 2990.00 a month allowed in ny if medicaid is used . living in nyc on 2990.00 would be pretty miserable for us .

 

[gerntz]

We bought LTC insurance nearly 30 years ago thru mega corp. Dail coverage amount & premiums have increased a lot, but today yearly premiums represent about a week's worth of daily payout - which is 60-80% of daily rates. Also covers assisted living at 80% of nursing home. DW is all for it given her mother spent 5 yrs in nursing home and my mom a year+ in assisted care. So we pay on.