Long Term Care, Real Cost , Real Inflation

[Carlos2]

Medical is now needed

Over the last couple of years, some LTC insurers have made physicals a requirement now. Newer policies are more expensive with less benefits.

 

[imoldernu]

About company stability....
Our insurance is now handled by SHIP... a Trust, established to accept policies where the companies had gone under, or divested themselves of the responsibility.
We started out in Travelers, moved to Continental, then Conseco, and now Senior Health Insurance Company of Pennsylvania. Same original policy. The original policy (1993) had some strict limits on how much and when policy rates could be raised. Has to do with some obscure formula that involves all health policies. So far increases have been minimal, although what used to be a "couples" policy for both of us, has now been separated into his and hers... hers being higher premiums, though the toal remains the same.
SHIP - History

 

[shotgunner]

While I understand your reasoning, insuring for the worst possible case in terms of length of stay can be cost prohibitive. Looking at the chart below and seeing that the vast majority of NH stays were less than three years led me to choose 36 months as the length of coverage for our policies. Even if that doesn't fund the entire cost, it will certainly cover a large portion of the expenses.

Insuring for the worst possible case for a NH means enjoying a WHOLE LOT less of my money and time in my life when I can enjoy it. Odds are in my favor that my stay will be brief.

It's the same mentality as making sure one has 100% certainty of not running out of money at age 95 when there is only an 18% chance one will live that long.

If one is so risk averse how did they ever retire early in the first place?

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.

 

[Independent]

And how is the cost model set up? Is it like health insurance that if you are already on meds for this or that, you are uninsurable for LTC? I am 55 and haven't bothered to look into LTC yet. Do you have to go get a physical and all that?

I just read an article by AARP written June 2012 and it said

Long-Term Care Insurance - Inflation Protection, Jane Bryant Quinn - AARP

This may be the reason everyone's rate is going up. Another reason may be (see below.)

And this below is some crazy inflation rate.

They are going to look at your health, just like major med or life insurance. How carefully depends on the company, your age, maybe how much you're buying, and any red flags that come up on the initial screening.

Your 30-50% partially connects to the prior quote on interest rates. If we pick the right dates, we can probably find long term bonds with prices that have gone up that much. Insurance companies use the premiums that people pay at age 60 to buy bonds which will eventually pay the claims incurred at age 80. I've heard that claims experience is also worse than expected.

 

[Independent]

While I understand your reasoning, insuring for the worst possible case in terms of length of stay can be cost prohibitive. Looking at the chart below and seeing that the vast majority of NH stays were less than three years led me to choose 36 months as the length of coverage for our policies. Even if that doesn't fund the entire cost, it will certainly cover a large portion of the expenses.

Yep. I'll say there's a difference between looking at that chart and buying a three year benefit and looking at that chart and buying nothing.

(Note, however, that I still haven't bought a LTCi policy. I'm still weighing pros and cons.)

 

[shotgunner]

Yep. I'll say there's a difference between looking at that chart and buying a three year benefit and looking at that chart and buying nothing.

(Note, however, that I still haven't bought a LTCi policy. I'm still weighing pros and cons.)

It's not just looking at the chart for me. It's watching what has happened to the generations above me 4 for 4 with nursing home stays of under 6 months.

That is if you lose the lottery and end up in a NH which is a 1 in 3 chance.

http://www.payingforseniorcare.com/longtermcare/statistics.html

 

[Independent]

It's not just looking at the chart for me. It's watching what has happened to the generations above me 4 for 4 with nursing home stays of under 6 months.

That is if you lose the lottery and end up in a NH which is a 1 in 3 chance.

Long Term Senior Care Statistics

To me, insurance is supposed to be for things that are unlikely but expensive.

I don't have any immediate family members who have lost houses due to fire or tornado, but I carry home owners insurance. I don't have any who have been sued for large amounts following an auto accident, but I carry auto liability.

My problem with LTCi isn't that really expensive NH stays are rare, it's that it's hard to find a policy that only covers the very rare events.

I'll probably end up buying a 365 day elim if I can find one, and hope that I never collect a dollar of NH benefits.

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.

Maybe you could expand on this with some numbers.

 

[aja8888]

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.

You mean "principal"?

But please explain how this would work?

 

[meierlde]

?

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.

Also if you want to do so you can purchase a funeral policy (to pay for the funeral) and that is not counted in the total. The idea there is of course to ensure that when the time comes you do not burden the state with burying you.