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Long term care insurance?

justme says

Long term care insurance?

Yes.

Be careful, only buy from a solid company. But even they are raising their prices and cutting plans. You don't know what will be available when the time comes that you need it, if the company is still solvent. There are all sorts of policies out there.

However, since prices are rising and there's no guarantee that the company will be around, why not invest the cost of the premium and self-insure? You can put the $ aside and when you run out of money, apply for medicaid.

I'd seriously consider seeing an Elder Law Attorney and doing planning - it would be worth your while to see if you even need such a policy. Also, with Obama care and all the other stuff, you don't know what you'll need. You probably have 30 years before you need the money.

Insurance is good, but sometimes you don't need it.

elliemae says

Be careful, only buy from a solid company. But even they are raising their prices and cutting plans. You don’t know what will be available when the time comes that you need it, if the company is still solvent. There are all sorts of policies out there.
However, since prices are rising and there’s no guarantee that the company will be around, why not invest the cost of the premium and self-insure? You can put the $ aside and when you run out of money, apply for medicaid.
I’d seriously consider seeing an Elder Law Attorney and doing planning - it would be worth your while to see if you even need such a policy. Also, with Obama care and all the other stuff, you don’t know what you’ll need. You probably have 30 years before you need the money.
Insurance is good, but sometimes you don’t need it.

Thanks Elliemae, your advice make a lot of sense. I got a quote the other day and it's more than I was expecting. Even though I'm forty-seven and healthy, I would be paying $4,000.00 annually for an unlimited policy, and around $3,000.00 for a six-year. I think I will hold off for now and just save save save! Luckily, my property has been valued at $1.5, and I expect it hold it's value for a long time. Insurance is always such a gamble!

I have worked briefly as a financial planner type, had various insurance, annuity, securities licenses, etc. so I was "in the business" so to speak. Not that this makes me any more expert than anyone else.
I would not buy this kind of insurance myself. I don't think it's worth it usually.
My other perspective is very hands on and personal. My own mother who was 86 became sick and I relocated to help her, and I saw many old people. A nursing home where she had post surgery rehab was instructive.
Men do not live very long in an incapacitated state. In other words, you'll die before you need this kind of long term care benefit probably.
The cost of the premiums is very high, you would be better off saving and investing this money yourself and keep it ready for the contingency of paying someone to care for you for your last few weeks alive when you are incapable of doing things for yourself.
A better insurance, if you really worry about this, is insurance to provide income if you are hurt or too sick to work, like that Aflac stuff.
Everyone's circumstances vary but I saw very healthy robust people in their 80's very suddenly go downhill.
My mother was very typical, she wanted to live in her own place which was familiar, safe, attractive, home, and she was the master there. The nurses who came in the last 6 months were polite as they were visitors. If you are in a facility, everyone pops in whenever they feel like it.
End up in a nursing home and you are going to hate it, whether or not some insurance pays will not matter to you.
My siblings were annoyed with me for helping my mother stay in her own home.
The reason Medicare has a 6 month hospice benefit is that a person's duration of being really sick doesn't usually last so long.
One more thing. When I need real *help*, I want to have cash to be able to pay for help. Insurance as you well know pays out in the manner and to the person the insurance company sees fit. I want total control when the time comes. I will have CASH ready to pay this cost because I can't take it with me.
I say this to everyone, you cannot have enough dough around when your time is near. Save the premiums and invest this money into an account for this purpose just in case.
You may just be struck by lightening leaving the titty bar on your 100th birthday, in which case your named beneficiary will throw you a nice funeral.

My mom had a LTC policy and it was great. She was in assisted living for six years prior to her passing and it paid out $32,000 per year. It saved our asses financially. But, rates have gone up since then, and coverage, down....

The nursing home where my mother had her rehab was 24 hour round the clock with RN and aides, etc. It was $14,000 per month. When she was done with rehab, I took her home.
I don't understand the need to buy insurance for "assisted living" if you have children or a spouse, or own assets like a house, but this is just my perspective.
I won't be buying long term care insurance for myself, regardless of how wealthy I become.

clambo says

The nursing home where my mother had her rehab was 24 hour round the clock with RN and aides, etc. It was $14,000 per month. When she was done with rehab, I took her home.

I don’t understand the need to buy insurance for “assisted living” if you have children or a spouse, or own assets like a house, but this is just my perspective.

I won’t be buying long term care insurance for myself, regardless of how wealthy I become.

Children can't always provide the level of care needed! Some parents don't want to burden their children with this responsibility, too.

clambo says

The nursing home where my mother had her rehab was 24 hour round the clock with RN and aides, etc. It was $14,000 per month. When she was done with rehab, I took her home

I'm assuming that the $14,000 was the amount paid by Medicare for rehabilitation services. These services include Physical, Speech & Occupational Therapies as well as 24 hour nursing , much of which is provided by a Registered Nurse. Medicare pays room & board in a nursing home for rehab because it's cheaper to pay for the patient to stay in the nursing home than to send 3 hours of therapy into the home every day. The Medicare benefit provides for 20 days at 100%, and the next 80 days with a co-pay that's currently $141.50 per day. This can be covered by a supplemental (Medigap) policy.

This is not the same amount as room & board for your normal daily care. Private pay rates in California start at about $230/day and go up from there. Depending upon the state in which you live, rates start at around $125/day. Your average patient requires this type of care.

There are exceptions, however; G-tube feedings are at least another $100 a day, none of which is covered by health insurance such as Medicare. Wound care for such things as bedsores (decubitus ulcers) also drive up costs - whether or not the ulcers were caused by the nursing home. And a patient who is on a ventilator can cost upwards of $750/day.

Most people can't afford these rates - and they end up spending their savings and going on Medicaid or MediCal or whatever the program is called in their state. It's possible for a married couple to have one partner in a nursing home whiile the other remains at home with a chunk of his/her income to sustain the household.

Clambo mentions that he (she?) saw people who were previously in great health for their age deteriorate rapidly - and blame the decline on the nursing home placement. Isn't it possible that the opposite is true - that they were placed in the nursing home because they were rapidly declining? That their bodies gave out after a long life - and that the nursing home provided care at the end of their lives that they couldn't have afforded at home?

clambo says

I don’t understand the need to buy insurance for “assisted living” if you have children or a spouse, or own assets like a house, but this is just my perspective.

If you're wealthy, you can afford to pay for placement - but most wealthy people buy long term insurance because they can afford the rates and don't want to pay the full cost out of pocket.

So far as Assisted Living, the rates are substantially cheaper than a nursing home and provide assistance with bathing, dressing, toileting, etc. There are also smaller facilities that provide much the same care as nursing homes that charge about 2/3 of the nurisng home rate as well - so there are options for those people who aren't able to maintain their independence. Neither assisted livings nor these smaller facilities are staffed by nurses 24/7, but in the event of emergency they do the same thing a nursing home does and call 911.

clambo says

The cost of the premiums is very high, you would be better off saving and investing this money yourself and keep it ready for the contingency of paying someone to care for you for your last few weeks alive when you are incapable of doing things for yourself.

It used to be that the average stay in a nursing home was 1.8 months - but I believe this number has gone up. This is based on my own observation. And since most long term care policies pay for assisted living or in-home care, I'd dare say that most people do use their insurance. Unfortunately, most people live far away from their family members, who rarely are able to afford to quit their jobs and stay with an ailing senior. Clambo was able to care for mom with the help of hospice workers (I'm assuming), but if she had not had the services of the hospice CNA's and nurses he probably had to hire someone in the home. This can be expensive - and hospice provides for respite care so that people can get a break. No one pays for respite if the patient doesn't receive hospice services.

clambo says

The reason Medicare has a 6 month hospice benefit is that a person’s duration of being really sick doesn’t usually last so long.

Sorry, clambo - on this point you're incorrect. The Medicare hospice benefit is for people who are dying - and they had to set the hallmark somewhere. The criteria is that the patient will probably pass away if the disease runs its normal, natural course... but the patient can stay on hospice as long as he continues to meet the criteria for hospice - several years if necessary. Hospice is a program that provides end-of-life care - but it doesn't provide 24 hour care to these patients. It supplements the care in the home (or nursing home or assisted living) but doesn't replace it.

Clambo's perspective is one I see alot - when the system works well for a fairly healthy patient whose family members can afford to stay home and care for them with the help of an in-home provided paid by insurance, it's awesome. But most people require more assistance and either have to pay out of pocket, use a long-term care policy, or go into a nursing home on state/federal aid.

(All of this info is covered in the Nursing Home Survival Guide, at the top of the Nursing Home Forum on this site.)

The best thing is to simply not get old, by the way.

Thanks Elliemae, again. One top of it, my mom had a mental illness, making it much more difficult for me to care for her. She lived in assisted care where a nurse was on staff and she was very happy those last years of her life. She was finally under a doctor's care and eating well. I never had a good or close relationship with her, but I made darn sure she was well taken care of.

I tell people all the time that their obligation isn't to provide care for the patient, but to make sure that the patient is cared for. So you did a good job. :)

re: L Term Care
1. m caid pays for most ppl . must have no assets
2. LTC 'insurance" pays least ( as % of all ppl in ltc homes)
3. 'buy term (life insurance) in vest rest"
4. Calif. n. 'homes" $6k/m, s. of border us$500/m five
hund.
5. us states now lien on yr r. estate...even if u have m.caid
when u sell house you must pay them something from sale!

Elliemae, I am aware of what hospice is all about. The hospice kicks in when a doctor believes that death is about 6 months or so away, but some people live longer. Being "really sick" to me means you are not going to live very long. What else could it mean?
The reason I answered the original question that it is NOT financially wise usually to buy long term care insurance is that if you are healthy until you are older, the odds are you will die rather suddenly. The likelihood of the policy paying out much is actually lower the healthier and older person you are.
Since you refer to me, my "patient" was not fairly healthy in my mother's case.
I would buy long term care insurance for myself if I were 1. extremely rich 2. had no assets (not quite poor) 3. have bad genes (e.g. parents died young, you are sickly, obese, etc.)
There is a guy on the radio on KGO San Francisco who does elder care issues and whatnot and he also believes that long term care insurance is not recommended.

Fellow California Native:

PasadenaNative says

My mom had a LTC policy and it was great. She was in assisted living for six years prior to her passing and it paid out $32,000 per year. It saved our asses financially. But, rates have gone up since then, and coverage, down….

Fil-in the blank:

My (parent/grandparent/aunt/uncle/godparent/elder) had (socialsecurity/traditional pension/pbgc payout/medicare) and it was great. (S/he) received benefits for (xx years) and it paid out (xx) per year. It saved our asses financially....

Do you really expect, for us 40-somethings, the gravvy train of "pay now, get paid back your original investment plus more in future decades" to continue?

The best LTC insurance you can buy is to save and invest conservatively and
raise children whom you know that you can trust to act on your behalf when the time comes.

Clambo:
I didn't mean to offend you - and am not sure why you believe I'm a great supporter of long term insurance. For some people, it works very well. For others, it doesn't work at all.

elliemae says

Insurance is good, but sometimes you don’t need it.

However, in its current structure Medicaid doesn't pay for group or assisted living centers - so people have to go into nursing homes if they can't afford the cost of assisted livings. This will probably change as time goes on - ALF's are cheaper and can save the state millions of dollars in the long run.

clambo says

Elliemae, I am aware of what hospice is all about. The hospice kicks in when a doctor believes that death is about 6 months or so away, but some people live longer. Being “really sick” to me means you are not going to live very long. What else could it mean?

For a patient whose cancer is progressing slowly, it could mean thousands of dollars each month in wasted treatments. People should have the right to die with dignity, and not have to worry about the time frame. There are many disease processes that take their sweet-ass time.

t t top says

us states now lien on yr r. estate…even if u have m.caid
when u sell house you must pay them something from sale!

According to the Federal Budget Deficit Reduction Act 2005, if a person is in a nursing home via the Medicaid benefit they can keep their homes if they intend to return to it - but they can't keep any money to maintain it, and when they die the home must be sold to satisfy the amount that Medicaid paid out. Either that or the family can pay Medicaid back.

You might not think it's fair, but why should Medicaid pay out $$$ while the family benefits from the patient's estate? Especially considering that the act was passed during the largest RE bubble the US experienced, there was a lot of untapped equity that people were in heriting.

LTC insurance might be compared to a coin toss as the odds as to whether or not you'll need it might be roughly the same.

Also, because it is fairly new there will be unforeseen factors in the years to come. Ie. are there enough facilities coming online for 10,000 people turning 65 everyday?

Are the future cost assumptions the carriers are using likely to be accurate?

Some carriers have raised rates more than expected and others have left the market.

Some other types of insurance might be a better approach than LTC.

Forbes just posted an article on LTC

Obama administration shelves long-term care plan

http://www.forbes.com/feeds/ap/2011/09/23/business-us-long-term-care-program_8696691.html