Long term care - slight reassurance from Scott Burns

[athena53]

Instead of protecting a low priced manufactured home, buying one with 8 times the value could help to protect our limited assets. As I mentioned in some previous posts, we watched dear friends see their nest egg depleted because of selling their precious (expensive) home to downsize into a manufactured home with a less than $40K value. They thought they were doing the right thing, but when the wife went into the nursing home for 5 years, they paid out of their nest egg, leaving him to live on his Social Security when she passed away..

Nothing illegal in doing this preplanning.

Yes, but I'd be very wary about Medicaid as a long-term care plan. It seems to be pretty common and my concern is that as states become more and more strained by the increasing costs of caring for the nursing home population, reimbursements won't keep up with inflation, higher-quality nursing homes will take fewer (or no) Medicaid patients, and what most people will get will be close to warehousing. You'd also have to prepare for the costs of maintaining the house in which the community spouse (the one not in LTC) lives. If you bought too much house to shelter your assets, someone in their 80s may have to hire out a lot of the work- cleaning, shoveling snow (where applicable), yard work, etc. There are also higher utility costs and property taxes.

 

[Options]

It's not always that clean. Despite advanced directives, POAs, family unanimity and other planning steps, it can get complicated fast.

Example: white night cousin (who hasn't seen the patient for years) from across the country flies in at the last second and goes on a rampage against a DNR order and throws the whole plan on its ear. Advanced planning can mitigate this but not always.

Example: Competency can be difficult to diagnosis in the presence of certain drugs, complications and can fluctuate.

Example: Well-meaning doctor may exaggerate the benefits of a proposed treatment plan or may play down the risks.

Your points are very well taken. Make sure if you can that your POA for health care is strong, knows your wishes, and is prepared to hold the ground on your behalf. Dying is hard.

I'll be more blunt: Due to my serious health condition, I had every intention of killing myself before I became incapacitated. It was a personal plan, extremely detailed, and it came very close to being executed. Those close to me knew about it, and knew about all other detailed directives. I got well, however, so I didn't need it.

That situation taught me that I wouldn't hesitate to do the same in the future. Unhealthy conditions including nursing home stays described by others here do not constitute living to me. YMMV.

 

[Walt34]

That situation taught me that I wouldn't hesitate to do the same in the future. Unhealthy conditions including nursing home stays described by others here do not constitute living to me. YMMV.

That can work if you have both the physical and mental abilities to do that. A stroke, for example, may take that option away. If you can't move your arms or think clearly that plan doesn't work.

 

[Options]

That can work if you have both the physical and mental abilities to do that. A stroke, for example, may take that option away. If you can't move your arms or think clearly that plan doesn't work.

Well I'll end this here but let's just say I would use the same contingencies in the future as I had then for any such situation. I believe planning for end of life issues such as physical and cognitive decline is just as important as financial planning.

OTOH, planning seems to be a trait of everyone on this board so I don't see it being a problem for those here.

 

[Htown Harry]

Nords wrote a relevant blog post about a month ago.

Summary: insurance companies are a pain.

Why I Won't Buy Long-Term Care Insurance - Military Guide

 

[SJ1_]

Unfortunately, finding a LTC policy which actually covers LONG TERM stay in such a facility is nearly impossible. Virtually all the policies have 3-5 year limits on payouts, so these not actually insuring against the particular situation that we most need to be insured against.

That is what I found last time I researched the subject.

And let's not forget Jim Kramer's Dad

..we had to fight those sons of bitches who wrote the policies to get the money they owed him to pay the nurse. I hate those guys because they tried to beat their obligations. We wouldn't let them get away with it, but don't tell Pop, because getting them to keep their word cost us almost as much as what the reimbursement was worth. I won't mention the company's name, but it was a disgrace, and if you have that insurance or your loved ones do, be prepared for them to try to screw you. I hope they won't. But many will try. I know that now...

Jim Cramer on His Dad: ‘Our Last Day Together Was Our Best One’ - TheStreet

 

[H2ODude]

Medicaid is no panacea. Long story, but moved MIL from our home after 8 years (couldn't take the repeated falls and other issues) into a nice AL facility that assured us they would take her on Medicaid when her $20k ran out. When that approached went to Social Services. After 3 hours learned that her $1,250 a month SS exceeded the $1,150 limit so no Medicaid. Now BIL and us are each coughing up $1,500 a month to keep her in AL (bounces in and out of hospital and rehab for pneumonia, falls, and c diff). We can afford it but it was a shock; well worth it to have her out of our home.

So, in eyes of the state of NC an 89 yo woman who can hardly walk with a walker and continuous health issues is well able to afford life on $1,150 a month! Really? Have no idea what would happen if BIL and us turned our back on her.

 

[jim584672]

Medicaid is no panacea. Long story, but moved MIL from our home after 8 years (couldn't take the repeated falls and other issues) into a nice AL facility that assured us they would take her on Medicaid when her $20k ran out. When that approached went to Social Services. After 3 hours learned that her $1,250 a month SS exceeded the $1,150 limit so no Medicaid. Now BIL and us are each coughing up $1,500 a month to keep her in AL (bounces in and out of hospital and rehab for pneumonia, falls, and c diff). We can afford it but it was a shock; well worth it to have her out of our home.

So, in eyes of the state of NC an 89 yo woman who can hardly walk with a walker and continuous health issues is well able to afford life on $1,150 a month! Really? Have no idea what would happen if BIL and us turned our back on her.

This doesn't seem right to me. Usually any income is "spent down", which means $1250 income - $1150 medical bills = $100 income for the month which would qualify for Medicaid. If any resources are available they must be under the limit set by your state. You need to get the Social Services Department to make a spend down budget. The social worker at the nursing home would be able to help with this.

 

[rodi]

H2Odude. Could it be because she's in an assisted living situation, not a nursing home? My understanding (which could VERY well be wrong) is that medicaid doesn't cover assisted living, only skilled nursing home.

And once the assets are depleted they take the SS first, then cover the balance... so the government is only on the hook for the balance above any pension/SS.

 

[2B]

Nords wrote a relevant blog post about a month ago.

Summary: insurance companies are a pain.

Why I Won't Buy Long-Term Care Insurance - Military Guide

It's an interesting tale. I will agree with him that Alzheimers' care will take a very heavy toll on the caregiver. My DW tried to manage her fathers issues for a few weeks before it became obvious. He was still in the early stages but it was obvious that he needed full time supervision. It was either us or an assisted living facility. We picked the facility.

I don't agree with Nords' healthy lifestyle reduces Alzheimers'. I've seen no studies that confirm anything about the condition. The cause, the progression, etc. I've seen lots of articles saying you should do puzzles, be vegan, lose weight, exercise more..... Unfortunately at this point, it just happens. Maybe real science will eventually give us real answers.

 

[MichaelB]

Federal law requires states to cover skilled nursing facilities, including nursing homes, for Medicaid patients. The states are free to provide for other LT care options for seniors, such as in-home care and assisted living facilities, but are under no obligation to do so.

 

[rodi]

Thanks for clarifying that Michael.

 

[H2ODude]

H2Odude. Could it be because she's in an assisted living situation, not a nursing home? My understanding (which could VERY well be wrong) is that medicaid doesn't cover assisted living, only skilled nursing home.

And once the assets are depleted they take the SS first, then cover the balance... so the government is only on the hook for the balance above any pension/SS.

Yes, she's in assisted living (but on the verge of needing more with CHF and really bad back, as well as periodic acute health issues like C diff and pneumonia) hence the no help. Social Services indicated that if she developed memory issues or went into skilled nursing she would qualify. She basically has spent it all down, has nothing but the ~$1,200 a month SS: and what her two children pitch in. I even called an eldercare attorney who advised that yes, no help for her now and in the near future it was generally agreed NC would eliminate even what was available for assisted living. It just leaves me scratching my head as to what this woman would/could do to live on only SS were it not for her two kids assistance. Bear in mind she did work 30 hours up until 80 working retail; that's when we took her in 9 years ago.

 

[Brat]

The incidence of pneumonia in my apartment building is stunning. Two elderly (over 80 yo) were in the hospital for at least a week each, then to skilled nursing until they could regain strength. Another in her late 60s was confined to home for weeks.


I find jewels in the SOA website. For those who like to ponder this subject look here: https://www.soa.org/Library/Monogra...g-impact-ltc/2014/mono-2014-managing-ltc.aspx

 

[imoldernu]

The incidence of pneumonia in my apartment building is stunning. Two elderly (over 80 yo) were in the hospital for at least a week each, then to skilled nursing until they could regain strength. Another in her late 60s was confined to home for weeks.


I find jewels in the SOA website. For those who like to ponder this subject look here: https://www.soa.org/Library/Monogra...g-impact-ltc/2014/mono-2014-managing-ltc.aspx

+1

Thanks... a good find. The details in the different papers cover a lot of points that are easily overlooked by those who are facing Long Term Care for the first time. Almost everyone I know who has either gone into LTC or children who are struggling with relatives who are at that point... have made mistakes that could be avoided with more information up front.
The articles (papers) are long, but get into details for different income levels.
I thought I was reasonably knowledgeable about the subject, but will go through the different subjects more than once.
Points like this:

The Genworth 2014 Cost of Care
Survey determined that the median cost of a home health worker is $20 per hour, whereas the
median cost of nursing home is $212 per day.

Just think... LTC... means the rest of ones' life. Definitely worth the time.


One of the points that was interesting to me, was this life expectancy chart... with expectations based on disability.

 

[imoldernu]

In the SOA (Society of Actuaries) page referenced, the complete paper by Anna Rappaport... (Caregiving ,Family, Health)... a 20 minute read, includes an excellent series of questions to be asked about CCRC's.
https://www.soa.org/Library/Monographs/Retirement-Systems/managing-impact-ltc/2014/mono-2014-managing-ltc.aspx

 

[Brat]

The Society of Actuaries has a great website. I was one of those kids who teethed on a slide rule, so to speak. I would have loved to be an actuary. Today the number crunching is done by software, the important skill is what to include in your variables and the reliability of your underlying assumptions.

We purchased a 'paid up' LTC insurance policy and at a certain level hope it was a waste of good money.

 

[braumeister]

The Society of Actuaries has a great website. I was one of those kids who teethed on a slide rule, so to speak. I would have loved to be an actuary.

I had a good friend who became an actuary (several decades ago). He used to joke that an actuary was someone who wanted to be an accountant but didn't have the personality for it.

It was amazing to me that he said studying to become an actuary was the most challenging thing he had ever done. This from a guy who already had a Ph.D. in mathematics!

 

[Brat]

"Back in the day", as I recall, there was only one or two academic programs for future actuaries. Women and certain groups were not encouraged to apply. Not so today.

 

[athena53]

I had a good friend who became an actuary (several decades ago). He used to joke that an actuary was someone who wanted to be an accountant but didn't have the personality for it.

It was amazing to me that he said studying to become an actuary was the most challenging thing he had ever done. This from a guy who already had a Ph.D. in mathematics!

I'll agree with that (although I've got only a BA in Math). Actuarial programs were just opening up to women when I started in 1975. One huge benefit of those exams was that they were graded anonymously (and still are). You know the material, you pass. They have no idea of your age, gender, ethnicity, etc. If you were willing to put in the work it was a great way to get highly-respected professional credentials.

 

[woodosgood]

TransAmerica rate increase on 3/6/15

If you are in the market for LTC Insurance and are considering a policy from Transamerica, I understand they are making changes to the inflation protection rider and raising premiums for new policies, effective 3/6/2015. So if you are going with Transamerica, get your application submitted by Friday to take advantage of current rates. This is not an endorsement of LTC insurance or Transamerica, just a fellow retiree passing along some potential money saving advice.