Long Term Care

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Don
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Long Term Care

Post by Don » Sat Oct 20, 2018 11:17 am

I'm curious what people here think about long term care. LTC is, to many, an esoteric issue that most of us don't want to think about today. Is it worth buying? What about self-insuring instead?
I'm 62 and beginning to think about these things now. Thanks!
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Re: Long Term Care

Post by l82start » Sat Oct 20, 2018 11:24 am

I was signed up for a long term care plan for a brief while, and the maths seemed to sense.. but it was all based on getting a plan before age 50 and the lower rates and better benefits that came with it. changes to my personal situation resulted in my dropping it, but there is something to be said for having this in place if you can get a decent deal, I have family members (parents) who have it and have made use of it successfully..
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Re: Long Term Care

Post by ochotona » Sat Oct 20, 2018 1:34 pm

Don what is your net worth?
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Re: Long Term Care

Post by Don » Sat Oct 20, 2018 11:45 pm

ochotona wrote:
Sat Oct 20, 2018 1:34 pm
Don what is your net worth?
It's considerable. Let's leave it at that.
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Re: Long Term Care

Post by ochotona » Sun Oct 21, 2018 5:22 am

Lately I've heard that north of $3 million it's feasible to self insure.
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Re: Long Term Care

Post by WiseOne » Sun Oct 21, 2018 9:01 am

I looked at LTC insurance, but the limits on coverage (2 years, pays only about 2/3 expenses, and has lots of little "gotcha" exceptions that I'm sure would kick in when it comes time to make claims) didn't seem worth the expense. Because it's virtually a certainty that we will all need LTC eventually, it's not so much insurance as a cost-sharing pool with a big slice of management overhead.

My insurance policy is the equity in my apartment plus core savings that can be spent down. If I needed more than that, I think a life insurance policy with ability to withdraw funds early would be a better choice. I also have an intangible advantage: I will be able to stay where I am quite happily for a lot longer than someone who lives in a surburban house with a yard and is car-dependent. I remember a great-aunt who never learned to drive as was often the case for women of that era. She had to move to a nursing home even though she was cognitively intact after her husband died, because she had limited mobility (knee problems) and lived in a typical car-dependent suburb. So sad. Yes, you can move to an apartment when necessary and I know people do this, but the longer you wait the harder it gets. Plus, most apartment complexes don't solve the transportation problem, because they're often stuck in the middle of nowhere with nothing to walk to except the grounds.
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Re: Long Term Care

Post by ochotona » Mon Apr 08, 2019 6:05 am

MangoMan wrote:
Sat Oct 20, 2018 2:46 pm
I think LTC insurance would be worth considering if the rates they quote you initially would be guaranteed not to increase beyond X%/year for the life of the policy, with X=twice the rate of inflation, or something else reasonable. But since that is not the case, I can't see where paying for a bunch of years and then dropping it later when you are closer to needing it because it is no longer affordable is a good idea.
CNA keeps raising our premia, and I want to diversify our response function away from their product.

I am looking at life insurance with LTC rider, and deferred income annuity which would start age 80-85 as alternatives. Getting quotes from Fidelity and Schwab.

Will let everyone know how it goes.
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Re: Long Term Care

Post by Don » Mon Apr 08, 2019 7:37 am

ochotona wrote:
Mon Apr 08, 2019 6:05 am
MangoMan wrote:
Sat Oct 20, 2018 2:46 pm
I think LTC insurance would be worth considering if the rates they quote you initially would be guaranteed not to increase beyond X%/year for the life of the policy, with X=twice the rate of inflation, or something else reasonable. But since that is not the case, I can't see where paying for a bunch of years and then dropping it later when you are closer to needing it because it is no longer affordable is a good idea.
CNA keeps raising our premia, and I want to diversify our response function away from their product.

I am looking at life insurance with LTC rider, and deferred income annuity which would start age 80-85 as alternatives. Getting quotes from Fidelity and Schwab.

Will let everyone know how it goes.
I had a banker at Chase pitch me the life insurance with the LTC rider but it sounded too good to be true so I haven't done it.
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Re: Long Term Care

Post by WiseOne » Mon Apr 08, 2019 8:02 am

Definitely let us know!

If there were such a thing as long term care insurance with indefinite coverage but a long elimination period (e.g. 3 years, the average nursing home stay), or an equivalent deductible eg $300K, I'd definitely consider it. That's something you might call "insurance", since it's insuring against a low probability, high cost event. Whereas the policies I've seen have benefit caps designed to pay for only 2-3 years, with just a 90 day elimination period at most. This is "insuring" for a cost that I know I can handle and is very likely to occur. That's not really insurance. Hence, there is no actual product out there that I want!

Not only that, but as the boomer generation moves through nursing homes, insurance companies are likely to start playing every trick in the book to avoid paying out on policies. Like, just denying everything and forcing you to fight for reimbursement. They will undoubtedly be aware that by the time you need nursing home care, you're not going to be in any condition to fight. And nursing homes simply won't have the bandwidth to deal with it. They'll just boot you out to make space for the next person on their waiting list.

If you look up info on maximum length of nursing home stays (e.g. pubmed articles), a typical number is 10 years. Multiply by $150,000/year (or price out good quality nursing homes in your area - that's what it is in mine). If $50K/year is covered by fixed income sources (Social security, pension, annuity, RMDs), that leaves $1M to be funded. No problem for a single person with a paid off home and a responsibly sized retirement nest egg, but more difficult for a couple. It should be possible to plan for this with the type of life insurance products Ochotona is looking into though - let us know what you find!
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Re: Long Term Care

Post by mathjak107 » Mon Apr 08, 2019 8:13 am

we have a very nice ny state partnership plan .

most states now sponsor plans that are partnerships.

you buy your plan from an approved insurer and the state agrees that in exchange for buying this plan they agree to certain things.

in our case ,ny, they agree:

not to touch assets at all if you buy 3 years of coverage for nursing home /6 years in home or assisted living .

no 5 year look back


no cap on the income the stay at home spouse gets

when the insurance runs out you go on a special version of medicaid and they pick up the bill.

nys gives us a 1600 dollar a year tax credit for having it too .

we bought it for the perks after the insurance is up , not for the 3 years care or 6 years in home care.

you need to qualify and being obese or unhealthy knocks you right out of the box . our agent was over weight and was denied a plan .

everything is clearly spelled out in the plan in simple english .. there are no gotcha's .

it is great you protected a million dollars in assets through trusts but now try drawing it to live on . medicaid will take every thing above around 3k a month in our state from the stay at home spouse .

so living in queens in nyc where we do that feature is a huge plus .


each state likely has a plan but they vary as to the perks after the insurance runs out .
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Re: Long Term Care

Post by mathjak107 » Mon Apr 08, 2019 4:46 pm

ochotona wrote:
Sun Oct 21, 2018 5:22 am
Lately I've heard that north of $3 million it's feasible to self insure.
The problem with self insuring is it sounds good but most people do not do anything to self insure ... insurance money needs to be kept safe ,secure and available and that means investments that are low yielding .. I would not even consider the pp a choice for insurance money since as we saw rising rates can be kryptonite ....

By getting a separate policy we can just keep that money invested as it typically is and with a small portion of the gains pay the premiums ..

Our attorney said most of his clients are the self insurers .. like Tyson said , everyone has a plan until they get punched in the face ... once the stay at home spouse realizes they can be impoverished and the money they were self insuring with is actually their same portfolio creating the income stream to live they freak out and want protection.

So self insuring is really not a great idea unless you can do it right and act as an insurer
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Re: Long Term Care

Post by ochotona » Mon Apr 08, 2019 9:08 pm

Self insurance not for us. We won't have enough. The more I think about it, keeping some LTC and layering on a 2-life deferred income annuity makes sense.
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Re: Long Term Care

Post by mathjak107 » Tue Apr 09, 2019 2:43 am

be very careful with these hybrid life insurance policies ...on the outside they look like a good deal because of how they appear to turn in to a life insurance policy if you don't use it on care ... under the hood they end up being incredibly expensive for what you get .

remember they control the interest on your policy over the years ..they don't have to raise you in premium ... they keep all the interest you get and the higher rates go the more that policy cost you...
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Re: Long Term Care

Post by mathjak107 » Tue Apr 09, 2019 7:22 am

mathjak107 wrote:
Tue Apr 09, 2019 2:43 am
be very careful with hybrid life insurance policies , they have become popular ...on the outside they look like a good deal because of how they appear to turn in to a life insurance policy if you don't use it on care ... under the hood they end up being incredibly expensive for what you get .

remember they control the interest on your policy over the years ..they don't have to raise you in premium ... they keep all the interest you get and the higher rates go the more that policy cost you...
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Re: Long Term Care

Post by WiseOne » Tue Apr 09, 2019 8:04 am

Something to remember about an extended nursing home stay: it's a one way trip.

The reason I can self insure is that the same retirement portfolio and owned home that supports me while I'm happily living independently, becomes an expendable source of funds to pay for nursing home care once I'm no longer independent. Definitely it's harder for a couple, but there's no fixed amount to save like $3 million. Do something like the calculation I posted about accounting for a worst-case 10 year nursing home stay, and either add to retirement savings goal or find some other way to plug the gap. The problem is that LTC insurance is unlikely to be much help, given the structure of covering only the first 2-3 years. For many people that's ok since most are in nursing homes less than that time, but by the same token that should be a piece of cake for a couple with a big retirement portfolio. It's the long-tail risk we're concerned with here, for which you currently cannot buy any form of insurance.

Of course there's always the option of the one way first class ticket to Switzerland :-).
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Re: Long Term Care

Post by mathjak107 » Tue Apr 09, 2019 8:50 am

if it wasn't for the fact we are a couple i would just let the portfolio exhaust itself .... but we each have a spouse to worry about .....

the new york state partnership plan is great ... we checked and we can get in almost anywhere as a paying customer ...once the 3 years insurance is up our plan calls for medicaid picking up the bills and they will take assignment after 3 years of paying .... we have no spend down , no income restrictions on the stay at home spouses income like regular medicaid and no look back .... we could not care less about the 3 years coverage ... it is the fact all assets are protected after the 3 years and medicaid will pick up the bills ..... only two states offer total asset protection plans and new york is one of them
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Re: Long Term Care

Post by Maddy » Tue Apr 09, 2019 10:01 am

WiseOne wrote:
Tue Apr 09, 2019 8:04 am
The problem is that LTC insurance is unlikely to be much help, given the structure of covering only the first 2-3 years. For many people that's ok since most are in nursing homes less than that time, but by the same token that should be a piece of cake for a couple with a big retirement portfolio. It's the long-tail risk we're concerned with here, for which you currently cannot buy any form of insurance.
I didn't know this. Very interesting, and a game-changer when it comes to planning for the worst. I doubt most people know this.

While my situation is a good deal more austere than yours, I'm thinking along the same lines. I'll just add that a property, house, or apartment is something that could potentially be willed to an in-home caretaker, whether that be a family member or someone else, making it possible to afford services that might otherwise require those assets to be spent down. If staying at home is your priority, you have to get creative!
Of course there's always the option of the one way first class ticket to Switzerland :-).
?? Could you explain?
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Re: Long Term Care

Post by mathjak107 » Tue Apr 09, 2019 10:57 am

i can tell you with my dad there was no way anyone of us could have taken care of him in our home .

usually by the time snf is needed it is well beyond family .

how it typically plays out is a family member gets hurt trying to move 200 lbs of limp flesh if they are moving someone paralyzed from a stroke and they are both in trouble or the person becomes violent with memory issues and someone gets hurt ...

the best way to bust up a family is have one sibling step up to the plate and take in a parent who needs care . odds are the other siblings step back and the battles begin .

usually the person providing the care takes a monetary hit , a career hit , a social hit and maybe even loses a job .

if you have a spouse odds are you can kiss that marriage good bye once the spouse starts on why do we have to do it and sacrifice so much and your brothers and sisters do nothing .


one of the worst things parents can do to their kids is drop their long term care burden on their children .

remember we are talking people who need a snf , not in home care or assisted living .
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Re: Long Term Care

Post by mathjak107 » Tue Apr 09, 2019 11:38 am

WiseOne wrote:
Tue Apr 09, 2019 8:04 am
Something to remember about an extended nursing home stay: it's a one way trip.

The reason I can self insure is that the same retirement portfolio and owned home that supports me while I'm happily living independently, becomes an expendable source of funds to pay for nursing home care once I'm no longer independent. Definitely it's harder for a couple, but there's no fixed amount to save like $3 million. Do something like the calculation I posted about accounting for a worst-case 10 year nursing home stay, and either add to retirement savings goal or find some other way to plug the gap. The problem is that LTC insurance is unlikely to be much help, given the structure of covering only the first 2-3 years. For many people that's ok since most are in nursing homes less than that time, but by the same token that should be a piece of cake for a couple with a big retirement portfolio. It's the long-tail risk we're concerned with here, for which you currently cannot buy any form of insurance.

Of course there's always the option of the one way first class ticket to Switzerland :-).
the new york state partnership plans are geared for the long tail risk after the insurance runs out ...that is why we buy them , certainly not for the 3 years of insurance
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Re: Long Term Care

Post by WiseOne » Tue Apr 09, 2019 6:42 pm

Maddy wrote:
Tue Apr 09, 2019 10:01 am
WiseOne wrote:
Tue Apr 09, 2019 8:04 am
The problem is that LTC insurance is unlikely to be much help, given the structure of covering only the first 2-3 years. For many people that's ok since most are in nursing homes less than that time, but by the same token that should be a piece of cake for a couple with a big retirement portfolio. It's the long-tail risk we're concerned with here, for which you currently cannot buy any form of insurance.
I didn't know this. Very interesting, and a game-changer when it comes to planning for the worst. I doubt most people know this.

While my situation is a good deal more austere than yours, I'm thinking along the same lines. I'll just add that a property, house, or apartment is something that could potentially be willed to an in-home caretaker, whether that be a family member or someone else, making it possible to afford services that might otherwise require those assets to be spent down. If staying at home is your priority, you have to get creative!
Of course there's always the option of the one way first class ticket to Switzerland :-).
?? Could you explain?
I didn't know this either until I read the fine print on the LTC policy offered through my employer. About 5 minutes later I decided it made no sense to buy it, and proceeded to ignore the beseeching emails pleading with me to change my mind. Nope sorry! However - if anybody hears of an insurance policy with a very large deductible (e.g. 2 years worth of nursing home costs) but no cap on benefits, I'll be interested to know about it.

Maddy, you might want to check the Medicaid long term care setup in your state. They allow a spouse (not sure if that includes "family member or someone else") to keep a home and some savings. I don't know if you can will it to someone while you're still alive though, plus there are "look-back" laws that go back as much as 5 years to prevent you from doing something like that and then claiming Medicaid benefits. I think you'll just have to arrange for those assets to be liquidated when you go into a nursing home. Needless to say, Medicaid nursing homes are not wonderful places to end up in.

Which brings me to your last question. Look here for the answer: http://www.dignitas.ch/

Basically, I'd opt for this over 10 years in a nursing home any day of the week. If I can no longer make decisions for myself, to me that's an instant indication to go comfort care only. Pneumonia? It's the friend of the elderly. Give me some oxygen, morphine, a dash of benzos, and a nice comfortable bed. You can only imagine what I think of cancer chemotherapy. Sick and throwing up for 6 solid months in order to extend my life for 3 months? oh right. Where do I sign up?
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Re: Long Term Care

Post by flyingpylon » Tue Apr 09, 2019 7:58 pm

This is an interesting article:

Why I Hope to Die at 75 by Ezekiel Emanuel

Sorry that it doesn't exactly help with the task of finding LTC options.
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Re: Long Term Care

Post by Kriegsspiel » Tue Apr 09, 2019 9:05 pm

WiseOne wrote:
Tue Apr 09, 2019 6:42 pm
Basically, I'd opt for this over 10 years in a nursing home any day of the week. If I can no longer make decisions for myself, to me that's an instant indication to go comfort care only. Pneumonia? It's the friend of the elderly. Give me some oxygen, morphine, a dash of benzos, and a nice comfortable bed.
Just think, the Romans used to put a sword under their ribs and tip over onto it. We've come so far.
You can only imagine what I think of cancer chemotherapy. Sick and throwing up for 6 solid months in order to extend my life for 3 months? oh right. Where do I sign up?
That seems like a much more common opinion among doctors than one would assume.
You there, Ephialtes. May you live forever.
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Re: Long Term Care

Post by mathjak107 » Wed Apr 10, 2019 2:40 am

WiseOne wrote:
Tue Apr 09, 2019 6:42 pm
Maddy wrote:
Tue Apr 09, 2019 10:01 am
WiseOne wrote:
Tue Apr 09, 2019 8:04 am
The problem is that LTC insurance is unlikely to be much help, given the structure of covering only the first 2-3 years. For many people that's ok since most are in nursing homes less than that time, but by the same token that should be a piece of cake for a couple with a big retirement portfolio. It's the long-tail risk we're concerned with here, for which you currently cannot buy any form of insurance.
I didn't know this. Very interesting, and a game-changer when it comes to planning for the worst. I doubt most people know this.

While my situation is a good deal more austere than yours, I'm thinking along the same lines. I'll just add that a property, house, or apartment is something that could potentially be willed to an in-home caretaker, whether that be a family member or someone else, making it possible to afford services that might otherwise require those assets to be spent down. If staying at home is your priority, you have to get creative!
Of course there's always the option of the one way first class ticket to Switzerland :-).
?? Could you explain?
I didn't know this either until I read the fine print on the LTC policy offered through my employer. About 5 minutes later I decided it made no sense to buy it, and proceeded to ignore the beseeching emails pleading with me to change my mind. Nope sorry! However - if anybody hears of an insurance policy with a very large deductible (e.g. 2 years worth of nursing home costs) but no cap on benefits, I'll be interested to know about it.

Maddy, you might want to check the Medicaid long term care setup in your state. They allow a spouse (not sure if that includes "family member or someone else") to keep a home and some savings. I don't know if you can will it to someone while you're still alive though, plus there are "look-back" laws that go back as much as 5 years to prevent you from doing something like that and then claiming Medicaid benefits. I think you'll just have to arrange for those assets to be liquidated when you go into a nursing home. Needless to say, Medicaid nursing homes are not wonderful places to end up in.

Which brings me to your last question. Look here for the answer: http://www.dignitas.ch/

Basically, I'd opt for this over 10 years in a nursing home any day of the week. If I can no longer make decisions for myself, to me that's an instant indication to go comfort care only. Pneumonia? It's the friend of the elderly. Give me some oxygen, morphine, a dash of benzos, and a nice comfortable bed. You can only imagine what I think of cancer chemotherapy. Sick and throwing up for 6 solid months in order to extend my life for 3 months? oh right. Where do I sign up?

maybe you don't understand ---- there is zero reason for me to look in to protecting any assets outside of the new york state partnership plan ... that is exactly what the full asset protection plan we have DOES NOT REQUIRE YOU TO DO .

ALL assets are 100% protected with NO LOOK BACK , NO SPEND DOWN , NO CAP ON SPOUSES INCOME , ... when the insurance runs out after 3 years the bills merely get assigned to A SPECIAL VERSION OF MEDICAID created just for these plans ,..
so you are incorrect about the 5 year rule in this case .. it does not apply .

they offer different levels of coverage...you can get 100% asset protection which is what we took or you can take a dollar for a dollar plans which are cheaper.. in the dollar for dollar if medicaid spends say 300k then 300k in assets is protected ... only ny and Illinois have full asset protection plans , all other states only offer dollar for dollar ... you get none of this protection in a conventional long term care plan , it has to be specifically a state partnership plan

"

Name:NYS Partnership for Long Term Care
Description:
The NYS Partnership for Long-Term Care (NYSPLTC) is a unique Department of Health program combining private long-term care insurance and Medicaid Extended Coverage (MEC). Its purpose is to help New Yorkers financially prepare for the possibility of needing nursing home care, home care, or assisted living services someday. The program works by allowing an individual or couple who purchases a Partnership insurance policy and keeps in effect to hold onto all or part of their assets (depending on the type of policy purchased) under the Medicaid program if their long-term care needs extend beyond the period covered by their policy.

https://www.cnbank.com/Your_Bank/Educat ... are_Plans/
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Re: Long Term Care

Post by ochotona » Wed Apr 10, 2019 6:23 am

Mathjak when does one enroll in these partnership plans? I've not decided I'm going to live in my current State at retirement. Do I have until 65-67 to decide?
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Re: Long Term Care

Post by mathjak107 » Wed Apr 10, 2019 8:24 am

i look at this no different then any other insurance i have . it covers me for the year ... my dad was younger then me when he had a stroke and was paralyzed ..

this is our 4th year and so far not a penny in increases ... with the insurers ties to the state it is doubtful the insurers failure would mean much .. like most insurer failures another company picks up the plans .
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