"75 Must Know Statistics About Long-Term Care: 2018 Edition"
- Taylor Larimore
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"75 Must Know Statistics About Long-Term Care: 2018 Edition"
Bogleheads:
Long-term care is one of the most difficult problems investors face.
Morningstar's Christine Benz, who will be on our Panel of Experts at the Boglehead Convention in October, has compiled a list of statistics to help us understand and (hopefully) solve the long-term care problem. This is the link:
75 Must Know Statistics About Long-Term Care: 2018 Edition
Best wishes
Taylor
Long-term care is one of the most difficult problems investors face.
Morningstar's Christine Benz, who will be on our Panel of Experts at the Boglehead Convention in October, has compiled a list of statistics to help us understand and (hopefully) solve the long-term care problem. This is the link:
75 Must Know Statistics About Long-Term Care: 2018 Edition
Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Thanks for sharing Taylor.
I just read through the article. My wife and I plan to purchase within the next year or so. It is a complex consideration.
Cheers
I just read through the article. My wife and I plan to purchase within the next year or so. It is a complex consideration.
Cheers
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Thanks for posting, Taylor. This is indeed one of the thorniest problems in financial planning for seniors. Having the statistics and information helps us to make these decisions properly.
Garland Whizzer
Garland Whizzer
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
It's a positive irony that you as one of the older but still very active bogleheads are posting this. Thanks for sharing.
Long-term care is a very real issue - I'm also investigating this for an elderly relative - the costs are north of $4k per month (in Europe), and this is probably a quite reasonable price.
Long-term care is a very real issue - I'm also investigating this for an elderly relative - the costs are north of $4k per month (in Europe), and this is probably a quite reasonable price.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
We are 66/68 and have had a Genworth Calif Partnership policy for 4 or 5 years.So far they have not raised it and we are paying about 3500 per year.We will see what happens if they raise the rates.
K.I.S.S........so easy to say so difficult to do.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Ugh!! Where is the definition of "long-term care"??? These "statistics" are meaningless without terms defined and without a further breakdown of which aspects of "long-term care" are accessed.
http://www.ache.org/PUBS/1mccall.pdf
Having just come off the roller coaster nightmare of hospital, home health, (brief) independent living, hospice, and end of life caregiving, I can state from experience that many aspects of what might be considered "long-term care" were accessed. I'm not sure if we even spent $5,000 for all of it, as the HMO covered virtually everything, and most of what we did spend was for hired personal care (which Medicare does not cover). What's significant is that no ADHC or nursing home was involved but hospice was accessed instead based on my relative's choice).
From everything I've read, my relative had an exceptional end of life as a result of our commitment to excellence throughout.
http://www.ache.org/PUBS/1mccall.pdf
Having just come off the roller coaster nightmare of hospital, home health, (brief) independent living, hospice, and end of life caregiving, I can state from experience that many aspects of what might be considered "long-term care" were accessed. I'm not sure if we even spent $5,000 for all of it, as the HMO covered virtually everything, and most of what we did spend was for hired personal care (which Medicare does not cover). What's significant is that no ADHC or nursing home was involved but hospice was accessed instead based on my relative's choice).
From everything I've read, my relative had an exceptional end of life as a result of our commitment to excellence throughout.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This is extremely misleading:
$123,600: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.)
The institutional spouse can transfer $123,600 of his or her own assets to the healthy spouse -- that's true. But the healthy spouse can retain an unlimited amount of his or her own assets as long as they are titled in his or her own name and the institutional spouse will still qualify for Medicaid.
Example: Institutional spouse has IRA in his/her name only worth $123,600. Healthy spouse has IRA in his/her name only worth $1,230,600. Institutional spouse transfers the $123,600 to healthy spouse. As long as all of the other Medicaid requirements are met, Institutional spouse can qualify, even though the healthy spouse is a millionaire. The way her blurb reads you would think that the healthy spouse also has to spend down his or her assets too to get to $123,600 -- that's not the case as long as they are titled separately.
$123,600: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.)
The institutional spouse can transfer $123,600 of his or her own assets to the healthy spouse -- that's true. But the healthy spouse can retain an unlimited amount of his or her own assets as long as they are titled in his or her own name and the institutional spouse will still qualify for Medicaid.
Example: Institutional spouse has IRA in his/her name only worth $123,600. Healthy spouse has IRA in his/her name only worth $1,230,600. Institutional spouse transfers the $123,600 to healthy spouse. As long as all of the other Medicaid requirements are met, Institutional spouse can qualify, even though the healthy spouse is a millionaire. The way her blurb reads you would think that the healthy spouse also has to spend down his or her assets too to get to $123,600 -- that's not the case as long as they are titled separately.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
My wife and I pay a combined $715/month for a policy that currently allows for 1.1 million dollars per person for the total insured amount (with $700/day coverage). Cost of living raises are optional to raise the coverage every few years.
It's a hefty payment, but it lets me sleep at night and not worry much about every running out of money or needing to save for this.
One of our grandmothers was in a home when she got old and has a nice private room, but she exhausted her savings and she had to use Medicaid and they moved her to some sort of terrible ward and she was miserable and she died shortly thereafter.
So you get what you pay for it seems and I don't want to look forward to that. So I believe in LTC even if it's expensive. I don't see an alternative unless I could have million+ at least set aside over and above a retirement portfolio, and that's just not going to happen.
It's a hefty payment, but it lets me sleep at night and not worry much about every running out of money or needing to save for this.
One of our grandmothers was in a home when she got old and has a nice private room, but she exhausted her savings and she had to use Medicaid and they moved her to some sort of terrible ward and she was miserable and she died shortly thereafter.
So you get what you pay for it seems and I don't want to look forward to that. So I believe in LTC even if it's expensive. I don't see an alternative unless I could have million+ at least set aside over and above a retirement portfolio, and that's just not going to happen.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This is the scary one to me:
I guess I’ll hope medicine advances with targeted and genomic treatments that this burden will shift from ‘long term care’ that is not covered by health insurance, to dimentia causing diseases which can be treated medically which is covered under health insurance. Of course, that probably means health insurance rates over the coming decades will rise as well…
I wondered why LTC insurance policies were not available to cover the long tail more cheaply, with a 3-5 year self-pay deductible. Now I know. The long tail is also fairly fat.14%: Percentage of people who will need long-term care for longer than five years.
I guess I’ll hope medicine advances with targeted and genomic treatments that this burden will shift from ‘long term care’ that is not covered by health insurance, to dimentia causing diseases which can be treated medically which is covered under health insurance. Of course, that probably means health insurance rates over the coming decades will rise as well…
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I looked into Long Term Care Insurance a few years ago. A few thoughts. First it seems that you can leverage with a LTC Policy about 3:1 of what you could do on your own with invested money. Second, it is discouraging to see Insurance companies drop out of this insurance market, Met Life being the most famous example. Also check out the stock price of Genworth which is not terribly inspiring. Third, I wonder if insurers will have to raise rates, not something you want to get hit with during your eighties. This is something that takes a lot of careful thought. Not sure these policies were priced correctly to begin with.
A fool and his money are good for business.
- Earl Lemongrab
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
None of those numbers were particularly scary. I don't bother with insurance because I have sufficient assets to cover most scenarios. For a single person, there are some aspects that work in your favor. If you go into long-term full care (nursing home) then most of your other expenses basically stop. You don't need a house or a car. No utilities, no food.
For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Even if I wildly exceeded the average for this sort of thing, like 20 years in memory care, I don't think there would be any problem for the portfolio to handle it. I could have retired at age 55, when full pension benefits would be available, but I thought the portfolio size at that time was too risky.
I think the most likely outcome is that I won't really touch savings at all, and all the money will go to the family. That's okay, I like them pretty well.
For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Even if I wildly exceeded the average for this sort of thing, like 20 years in memory care, I don't think there would be any problem for the portfolio to handle it. I could have retired at age 55, when full pension benefits would be available, but I thought the portfolio size at that time was too risky.
I think the most likely outcome is that I won't really touch savings at all, and all the money will go to the family. That's okay, I like them pretty well.
- abuss368
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Hi Taylor -Taylor Larimore wrote: ↑Mon Aug 20, 2018 10:26 am Bogleheads:
Long-term care is one of the most difficult problems investors face.
Morningstar's Christine Benz, who will be on our Panel of Experts at the Boglehead Convention in October, has compiled a list of statistics to help us understand and (hopefully) solve the long-term care problem. This is the link:
75 Must Know Statistics About Long-Term Care: 2018 Edition
Best wishes
Taylor
Thank you for sharing that eye opening information.
John C. Bogle: “Simplicity is the master key to financial success."
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Thank you for sharing this.
Another consideration is the willingness of the LTC policy to actually pay out. A relative purchased LTC policies for parents, and the insurer kept denying the claims, stating they did not believe the person could not do the requisite number of ADL's without assistance, despite obvious evidence they could not. While the parents were ill, nobody had enough time to fight the insurance company, but at least they put in the claims. The siblings were able to fund the care out of pocket. One sibling took on the battle after the parents passed away. After spending a year writing letters and involving legal counsel, they finally got a significant portion of the costs reimbursed. Many would not have a successful outcome, particularly a senior with diminished mental capacity trying to get the LTC to pay when it is most needed...
Another consideration is the willingness of the LTC policy to actually pay out. A relative purchased LTC policies for parents, and the insurer kept denying the claims, stating they did not believe the person could not do the requisite number of ADL's without assistance, despite obvious evidence they could not. While the parents were ill, nobody had enough time to fight the insurance company, but at least they put in the claims. The siblings were able to fund the care out of pocket. One sibling took on the battle after the parents passed away. After spending a year writing letters and involving legal counsel, they finally got a significant portion of the costs reimbursed. Many would not have a successful outcome, particularly a senior with diminished mental capacity trying to get the LTC to pay when it is most needed...
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I agree that complying with the filing requirements of the LTC company would tax any senior who was in true need of the LTC benefits, not only one with diminished mental capacity. There is a great deal of documentation required to have a carrier pay benefits. Most older seniors have had years of coverage on Medicare plans where the patient is not directly involved with filing of claims, and are not capable of scanning & downloading in order to submit for LTC reimbursement.Saving$ wrote: ↑Tue Aug 21, 2018 8:28 pm Thank you for sharing this.
Another consideration is the willingness of the LTC policy to actually pay out. A relative purchased LTC policies for parents, and the insurer kept denying the claims, stating they did not believe the person could not do the requisite number of ADL's without assistance, despite obvious evidence they could not. While the parents were ill, nobody had enough time to fight the insurance company, but at least they put in the claims. The siblings were able to fund the care out of pocket. One sibling took on the battle after the parents passed away. After spending a year writing letters and involving legal counsel, they finally got a significant portion of the costs reimbursed. Many would not have a successful outcome, particularly a senior with diminished mental capacity trying to get the LTC to pay when it is most needed...
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This reinforces the widely held belief that most insurance companies are deadbeats outside of the most common use cases.Saving$ wrote: ↑Tue Aug 21, 2018 8:28 pm Thank you for sharing this.
Another consideration is the willingness of the LTC policy to actually pay out. A relative purchased LTC policies for parents, and the insurer kept denying the claims, stating they did not believe the person could not do the requisite number of ADL's without assistance, despite obvious evidence they could not. While the parents were ill, nobody had enough time to fight the insurance company, but at least they put in the claims. The siblings were able to fund the care out of pocket. One sibling took on the battle after the parents passed away. After spending a year writing letters and involving legal counsel, they finally got a significant portion of the costs reimbursed. Many would not have a successful outcome, particularly a senior with diminished mental capacity trying to get the LTC to pay when it is most needed...
I don't carry a signature because people are easily offended.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Was this a major insurance company that denied claims? Thank you. Just curious.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Wade Pfau also has statistics on this, including a breakdown of length of stay in a Forbes article:
I find the breakdown more useful than averages.
In my case (Male), it appears that I have a 71% chance of a stay of 2 years or less, and an 89% chance of 5 years or less.
Stays of 2 years or less fits easily in our plan. My MIL was just in such a facility, so we know the current costs. A 5 year
stay would cut out most of the discretionary part of my wife's portfolio after my demise. For her, a long stay would
not be disastrous financially, since she would have the full net worth to draw on, cars and house can be sold, no property tax,
no travel.
Our plan would fail if both of us were in long-term care for 10 years, but the odds of both of us needed more than 5 years is
3% . (11%*28%)
There are many other risks of that magnitude that we have to accept.
It comes down to whether I can really trust the LTCi company.
I just don't trust LTCi companies to treat me and my wife well when we are in our 80's and 90's.
We have also demonstrated to our kids that a widowed mom does not have to go into LTC until absolutely necessary,
as was demonstrated to both my wife and I.
Code: Select all
https://www.forbes.com/sites/wadepfau/2016/01/05/costs-and-incidence-of-long-term-care/#617c9d794ceb
In my case (Male), it appears that I have a 71% chance of a stay of 2 years or less, and an 89% chance of 5 years or less.
Stays of 2 years or less fits easily in our plan. My MIL was just in such a facility, so we know the current costs. A 5 year
stay would cut out most of the discretionary part of my wife's portfolio after my demise. For her, a long stay would
not be disastrous financially, since she would have the full net worth to draw on, cars and house can be sold, no property tax,
no travel.
Our plan would fail if both of us were in long-term care for 10 years, but the odds of both of us needed more than 5 years is
3% . (11%*28%)
There are many other risks of that magnitude that we have to accept.
It comes down to whether I can really trust the LTCi company.
I just don't trust LTCi companies to treat me and my wife well when we are in our 80's and 90's.
We have also demonstrated to our kids that a widowed mom does not have to go into LTC until absolutely necessary,
as was demonstrated to both my wife and I.
- willthrill81
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Buckle up.
http://www.investmentnews.com/article/2 ... average-58Genworth Financial Inc. received approval from state regulators this year to raise costs an average 58% on some long-term-care insurance policies, affecting tens of millions of dollars' worth of annual insurance premiums the company receives from consumers.
The Sensible Steward
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm None of those numbers were particularly scary. I don't bother with insurance because I have sufficient assets to cover most scenarios. For a single person, there are some aspects that work in your favor. If you go into long-term full care (nursing home) then most of your other expenses basically stop. You don't need a house or a car. No utilities, no food.
"Don't be downhearted, I can fix it for you sonny. It won't take too long, it'll just take money."
-Alan Jackson
As it stands right now, it seems very unlikely that one spouse will consume more than $500k of long-term care. For most Bogleheads, who have in excess of $1M by the time that they are likely to need LTC, this shouldn't be a real problem as they can just pay for this outright, leaving the healthy spouse with a smaller portfolio but very likely lesser expenses as well.
The all too widespread notion that there is a significant chance that you'll spend more than $1M in today's environment on LTC is a scare tactic used by insurance salespeople.
The Sensible Steward
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
We had found that LTCI was valuable much earlier than in retirement as the costs with one of us needing care were problematic and costly.
While it is less likley that you need it at a younger age what would you do if your spouse needed care for a year or so with recuperation?
It is also less costly when you are youunger.
While it is less likley that you need it at a younger age what would you do if your spouse needed care for a year or so with recuperation?
It is also less costly when you are youunger.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
What’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm None of those numbers were particularly scary. I don't bother with insurance because I have sufficient assets to cover most scenarios. For a single person, there are some aspects that work in your favor. If you go into long-term full care (nursing home) then most of your other expenses basically stop. You don't need a house or a car. No utilities, no food.
For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Even if I wildly exceeded the average for this sort of thing, like 20 years in memory care, I don't think there would be any problem for the portfolio to handle it. I could have retired at age 55, when full pension benefits would be available, but I thought the portfolio size at that time was too risky.
I think the most likely outcome is that I won't really touch savings at all, and all the money will go to the family. That's okay, I like them pretty well.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
- Earl Lemongrab
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
It's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Here is another useful web site that shows long term care costs by location, and the costs vary greatly.
https://www.genworth.com/aging-and-you/ ... -care.html
I am fortunate to live in Georgia where the costs are below the national average.
The costs in Georgia are not dramatically higher than our normal retirement budget so that LCT costs would be pretty manageable if only one of us is surviving when it is needed.
https://www.genworth.com/aging-and-you/ ... -care.html
I am fortunate to live in Georgia where the costs are below the national average.
The costs in Georgia are not dramatically higher than our normal retirement budget so that LCT costs would be pretty manageable if only one of us is surviving when it is needed.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
If you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
- Earl Lemongrab
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmIf you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
With the assets, I can get into most any place I want without problem.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
To leave money to your family?Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pmI don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmIf you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
With the assets, I can get into most any place I want without problem.
I agree not all do; but in LCOL areas it is almost always a mix. And Medicaid patients do get in, in LCOL anyway; again, the nursing homes are there to make money and they won't survive if it wasn't for Medicaid.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Thank you, Taylor. This is an issue many of us will face and I appreciate learning more about the issue.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
So you are saying you can protect your assets and use Medicaid to get into a good nursing home facility, provided you are flexible as to which state/area you live in? I thought that a) protecting your assets was tricky and that b) finding a good Medicaid-sponsored nursing home was also tricky? How are you suggesting to plan out this strategy so you can execute it when LTC is needed?DC3509 wrote: ↑Wed Aug 22, 2018 7:47 pmTo leave money to your family?Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pmI don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmIf you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pm
What’re you projecting for the cost of a good facility?
With the assets, I can get into most any place I want without problem.
I agree not all do; but in LCOL areas it is almost always a mix. And Medicaid patients do get in, in LCOL anyway; again, the nursing homes are there to make money and they won't survive if it wasn't for Medicaid.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Thanks! I agree that $120k/year or $330/day looks like it should cover a decent LTC place.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Now the question is, how do I calculate whether LTCi is a good deal or not provided I would need $120k/year. Let’s say $95k/year if Social Security provides $25k/year. So that’s $260/day.
For example, if LTCi costs $2k/month, or $24k per year, then after 20 years that results in $480k in premiums. But if you had to go into LTC during that time, it would pay for itself in 4-5 years.
I seem to remember the LTCi policies I had looked up as covering about $150/day though. And I don’t remember what the premiums were or if I got that far.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
- willthrill81
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
That's the $64k question, and the LTCi actuaries aren't very forthcoming with the data needed to address it properly.finite_difference wrote: ↑Wed Aug 22, 2018 9:36 pmThanks! I agree that $120k/year or $330/day looks like it should cover a decent LTC place.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
Now the question is, how do I calculate whether LTCi is a good deal or not provided I would need $120k/year. Let’s say $95k/year if Social Security provides $25k/year. So that’s $260/day.
For example, if LTCi costs $2k/month, or $24k per year, then after 20 years that results in $480k in premiums. But if you had to go into LTC during that time, it would pay for itself in 4-5 years.
I seem to remember the LTCi policies I had looked up as covering about $150/day though. And I don’t remember what the premiums were or if I got that far.
If you're able to self-insure, then the math says that you're generally better off doing so. Considering how relatively few people need more than three years of full-blown $100k+ LTC, I'd say that if a $300-$500k LTC event wouldn't place too big of a financial burden on the well spouse and/or others, you should be fine. But if a LTC event did occur when both spouses are still alive, setting up a Medicaid-compliant annuity may be worthwhile.
The Sensible Steward
- Earl Lemongrab
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
What make you think I won't leave money for my family?DC3509 wrote: ↑Wed Aug 22, 2018 7:47 pmTo leave money to your family?Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pm I don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?
With the assets, I can get into most any place I want without problem.
I agree not all do; but in LCOL areas it is almost always a mix. And Medicaid patients do get in, in LCOL anyway; again, the nursing homes are there to make money and they won't survive if it wasn't for Medicaid.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I know a lot of facilities have Medicaid beds, but I've never heard that it's just as easy to get into the ones you want as it is with cash.finite_difference wrote: ↑Wed Aug 22, 2018 9:28 pmSo you are saying you can protect your assets and use Medicaid to get into a good nursing home facility, provided you are flexible as to which state/area you live in? I thought that a) protecting your assets was tricky and that b) finding a good Medicaid-sponsored nursing home was also tricky? How are you suggesting to plan out this strategy so you can execute it when LTC is needed?
- willthrill81
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
The question is what price are you willing to pay for that ease. It may be very steep indeed.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 11:36 pmI know a lot of facilities have Medicaid beds, but I've never heard that it's just as easy to get into the ones you want as it is with cash.finite_difference wrote: ↑Wed Aug 22, 2018 9:28 pmSo you are saying you can protect your assets and use Medicaid to get into a good nursing home facility, provided you are flexible as to which state/area you live in? I thought that a) protecting your assets was tricky and that b) finding a good Medicaid-sponsored nursing home was also tricky? How are you suggesting to plan out this strategy so you can execute it when LTC is needed?
The Sensible Steward
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Setting up the asset protection part is not that difficult -- place your non-retirement fund assets into an irrevocable trust at an age when you are very unlikely to need LTC in the next five years. Ideally this would be done in your mid 60s or so. If you survive the 5 year look-back -- and statically you should -- then any of the assets in the irrevocable trust generally cannot be touched by Medicaid. It is tricky, but there are a lot of elder law attorneys out there who specialize in this and know exactly how to do it correctly. It sure costs a lot less than paying LTCI premiums.finite_difference wrote: ↑Wed Aug 22, 2018 9:28 pmSo you are saying you can protect your assets and use Medicaid to get into a good nursing home facility, provided you are flexible as to which state/area you live in? I thought that a) protecting your assets was tricky and that b) finding a good Medicaid-sponsored nursing home was also tricky? How are you suggesting to plan out this strategy so you can execute it when LTC is needed?DC3509 wrote: ↑Wed Aug 22, 2018 7:47 pmTo leave money to your family?Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pmI don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmIf you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pm
It's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.
With the assets, I can get into most any place I want without problem.
I agree not all do; but in LCOL areas it is almost always a mix. And Medicaid patients do get in, in LCOL anyway; again, the nursing homes are there to make money and they won't survive if it wasn't for Medicaid.
On the second point -- I think it's important to keep in mind that a lot of Medicaid programs now are provided in-home -- these are called waiver programs. It is basically Medicaid providing you with what amounts to a home health care service because this is far less expensive than nursing home care itself. So if you have a house where you are living now and it is amenable to growing old in it (i.e. no stairs, one floor, etc.) -- then you can actually use Medicaid for in-home health services. If you have a big pot of money in an irrevocable trust you can further supplement that care with things like full-time geriatric care managers, and the like. That's one strategy.
I would not suggest moving to a low cost of living state that you have never lived in just so you can qualify for Medicaid at a better facility sooner -- though when I investigated all of this I was surprised to learn that there is no prior residency requirement for Medicaid in most states -- i.e. you don't need to have lived there for a few years. You can hypothetically move there tomorrow and qualify the next day, if you meet all of the other requirements.
But taking that far-fetched idea off the table -- I do think it makes sense for people who think they might end up on Medicaid to allow this to be at least one aspect of where they should live pre-nursing home. Obviously, it is easier to investigate nursing homes, get to know the administrators, etc. if you live there and can visit things in person. Put another way -- if you have say two choices in your early 70s on where to live -- one is a LCOL with lots of Medicaid beds and fairly decent Medicaid facilities versus a HCOL with Medicaid beds that are only in dungeons and lots of private pay only facilities -- I think you should strongly consider living in the former, not the latter, if there is a prospect you will end up on Medicaid.
Anybody who is smart enough to navigate through very complicated LTCI policies can certainly execute the strategies discussed above.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I should further add -- I realize these strategies are not for everyone -- and are probably not the right fit for most people here. But I do think more people should look at these options than currently do, and that executing some of these options may be better than LTCI with premiums that become unsustainable precisely at the moment when you need the policy the most. Just food for thought on the subject. I have done a lot of my own research on this lately for my parents and I was surprised at what I learned and it challenged many of my pre-conceived notions.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
By having a lot of assets, one has choice. It's really a low-probability chance that it will be necessary. Most people don't spend decades in such a facility. But should that happen, the money is there. If it's not needed, it's used for other purposes.willthrill81 wrote: ↑Thu Aug 23, 2018 12:15 amThe question is what price are you willing to pay for that ease. It may be very steep indeed.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 11:36 pm I know a lot of facilities have Medicaid beds, but I've never heard that it's just as easy to get into the ones you want as it is with cash.
For me, the choice comes down to whether to spend on LTC insurance or self-fund. The Medicaid option doesn't appeal for a few reasons. So I don't bother with the insurance.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This is another thing that gives me pause. The famous Jim Cramer had similar problems when caring for his father. His comments about the insurance company is not repeatable in a family oriented forum.Saving$ wrote: ↑Tue Aug 21, 2018 8:28 pm Thank you for sharing this.
Another consideration is the willingness of the LTC policy to actually pay out. A relative purchased LTC policies for parents, and the insurer kept denying the claims, stating they did not believe the person could not do the requisite number of ADL's without assistance, despite obvious evidence they could not. While the parents were ill, nobody had enough time to fight the insurance company, but at least they put in the claims. The siblings were able to fund the care out of pocket. One sibling took on the battle after the parents passed away. After spending a year writing letters and involving legal counsel, they finally got a significant portion of the costs reimbursed. Many would not have a successful outcome, particularly a senior with diminished mental capacity trying to get the LTC to pay when it is most needed...
A fool and his money are good for business.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
And then there are the small, home-based facilities that don’t appear on any list, don’t take Medicaid, and are mostly unknown , until the need arises. That doesn’t even take into account the possibility of care in one’s own home. My spouse was in the first type of setting for two years; now he’s in the second. They were both affordable to us on modest incomes, with modest assets, were, and are providing excellent care, and nothing provided by Medicaid in our senior-predominant area even approaches the quality of either.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pmI don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmEarl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pmWhat’re you projecting for the cost of a good facility?Earl Lemongrab wrote: ↑Tue Aug 21, 2018 2:10 pm For me, I would still have my pension coming in, plus I or my POA would start Social Security if not already going (assuming this is after my next birthday). Those two probably pay half of costs at a good facility currently, but it's difficult to project with certainty too far into the future as the pension is non-COLA.
If you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.
With the assets, I can get into most any place I want without problem.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
You do realize that Medicaid provides in-home and uses the same in-home health care providers that are otherwise private pay -- right?littlebird wrote: ↑Thu Aug 23, 2018 11:50 amAnd then there are the small, home-based facilities that don’t appear on any list, don’t take Medicaid, and are mostly unknown , until the need arises. That doesn’t even take into account the possibility of care in one’s own home. My spouse was in the first type of setting for two years; now he’s in the second. They were both affordable to us on modest incomes, with modest assets, were, and are providing excellent care, and nothing provided by Medicaid in our senior-predominant area even approaches the quality of either.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 7:09 pmI don't have insurance. I'd be a cash payer. While it's true that most facilities have some Medicaid and Medicare beds, not all do. I was reviewing the "top performers" from US News and some don't. It also doesn't that any Medicaid patient can get in. Yes, you can try to get in as paid and deplete and stay as Medicaid, but why in the world would I go through that?DC3509 wrote: ↑Wed Aug 22, 2018 5:56 pmEarl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pmIt's always difficult to accurately predict price increases, especially in health care, but I've been using a notional figure of 120k/year. That might be high, especially as I'm in a LCOL area, but again you need a number to work with. Some online sources say that current averages for private rooms in the area are around $180 a day, with a high of about $380/day. I would want to get a nice facility. I don't know if the top end would be necessary or even what all the cost drivers are.finite_difference wrote: ↑Wed Aug 22, 2018 2:18 pm
What’re you projecting for the cost of a good facility?
If you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.
With the assets, I can get into most any place I want without problem.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Yup; insurance companies are dropping like flies. I've chosen to spend the next umpteen decades saving so I can self-insure when the time comes. I don't trust this long-term care rubbish. My uncle just purchased a policy; he's exceedingly well-trained in finance, economics, and quantitative analysis, and he still had to be very careful.nedsaid wrote: ↑Tue Aug 21, 2018 12:42 am I looked into Long Term Care Insurance a few years ago. A few thoughts. First it seems that you can leverage with a LTC Policy about 3:1 of what you could do on your own with invested money. Second, it is discouraging to see Insurance companies drop out of this insurance market, Met Life being the most famous example. Also check out the stock price of Genworth which is not terribly inspiring. Third, I wonder if insurers will have to raise rates, not something you want to get hit with during your eighties. This is something that takes a lot of careful thought. Not sure these policies were priced correctly to begin with.
Global stocks, US bonds, and time.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Insurance generally works best for low probability high impact events for both the insured and the insurance companies. What makes LTC problematic is it covers high probability high impact events. Currently still leaning towards self insurance but keeping an open mind.
Adapt or perish
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Yeah considering ~15% of folks over 71 experience symptoms of Alzheimer’s or dementia, it does seem rather high probability.. perhaps a 1 in 4 chance of needing LTC for a significant (3+ year) period of time? Not sure if this article addresses thatTop99% wrote: ↑Thu Aug 23, 2018 8:27 pm Insurance generally works best for low probability high impact events for both the insured and the insurance companies. What makes LTC problematic is it covers high probability high impact events. Currently still leaning towards self insurance but keeping an open mind.
Edited to add: yes! The article states that 14% of people need LTC longer than 5 years.
So if you can comfortably afford self-insuring 10 years of LTC and you are a little bit of a risk taker on top of that, then self-insuring doesn’t seem like such a bad option.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
I feel that I never want to be in a place where my services are being paid by Medicaid (on a Medicaid level).
Am I wrong on this?
Am I wrong on this?
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This is over simplified. In Michigan, qualified retirement savings titled in the healthy spouse's name are countable for Medicaid long term care eligibility. An Elder Law attorney confirmed this for me recently although she also mentioned that a court might be willing to rule that some (all?) of the healthy spouse's assets could be protected for their own use. Note that this approach doesn't help if the institutionalized spouse is the one with most of the qualified retirement savings in their name.DC3509 wrote: ↑Tue Aug 21, 2018 12:05 am This is extremely misleading:
$123,600: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.)
...the healthy spouse can retain an unlimited amount of his or her own assets as long as they are titled in his or her own name and the institutional spouse will still qualify for Medicaid.
Example: Institutional spouse has IRA in his/her name only worth $123,600. Healthy spouse has IRA in his/her name only worth $1,230,600. Institutional spouse transfers the $123,600 to healthy spouse. As long as all of the other Medicaid requirements are met, Institutional spouse can qualify, even though the healthy spouse is a millionaire. The way her blurb reads you would think that the healthy spouse also has to spend down his or her assets too to get to $123,600 -- that's not the case as long as they are titled separately.
It's worth noting that the rules around Medicaid and irrevocable trusts vary by state; in Michigan for example, Miller trusts aren't an option. Also, for families like mine where virtually all our assets are in qualified retirement accounts, setting up an irrevocable trust in advance isn't an option.DC3509 wrote: ↑Thu Aug 23, 2018 12:17 am
Setting up the asset protection part is not that difficult -- place your non-retirement fund assets into an irrevocable trust at an age when you are very unlikely to need LTC in the next five years. Ideally this would be done in your mid 60s or so. If you survive the 5 year look-back -- and statically you should -- then any of the assets in the irrevocable trust generally cannot be touched by Medicaid. It is tricky, but there are a lot of elder law attorneys out there who specialize in this and know exactly how to do it correctly. It sure costs a lot less than paying LTCI premiums.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
This is the main problem with LTCi, IMHO.Top99% wrote: ↑Thu Aug 23, 2018 8:27 pm Insurance generally works best for low probability high impact events for both the insured and the insurance companies. What makes LTC problematic is it covers high probability high impact events. Currently still leaning towards self insurance but keeping an open mind.
I think it is actually even worse than that because most policies available today only cover the medium impact events. What would be really useful to me is a policy to cover low probability (long exclusion period), high impact (decades in care) events. I believe most state regulations prevent such policies, even if there were a market for it.
A policy covering 3 to 5 years of stay has marginal value to me.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
For those who are/have veterans getting to the point of needing Long Term Care:
- Look into state veterans homes. Each state has different eligibility or prices, but the savings can be significant. In Massachusetts for example, the rate is only $30/day. $900 a month LTC is a great deal! As such, the waitlists can get lengthy (Massachusetts averages 8-12 months).
-If the veteran has a service connected disability rating with the VA of 70-100%, they can get their Long Term Care for free. Services may be provided at a VA facility, or utilize "VA contract beds", where certain nursing homes in the community have contracts with the VA, and the VA will foot the bill for eligible veterans to stay at that home.
- Look into state veterans homes. Each state has different eligibility or prices, but the savings can be significant. In Massachusetts for example, the rate is only $30/day. $900 a month LTC is a great deal! As such, the waitlists can get lengthy (Massachusetts averages 8-12 months).
-If the veteran has a service connected disability rating with the VA of 70-100%, they can get their Long Term Care for free. Services may be provided at a VA facility, or utilize "VA contract beds", where certain nursing homes in the community have contracts with the VA, and the VA will foot the bill for eligible veterans to stay at that home.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
You make a good point -- the rules do vary somewhat from state to state. I did not mean to imply otherwise. The other strategy you can use when the institutionalized spouse has most of the retirement savings -- beyond transferring a portion to the healthy spouse -- is to buy a Medicaid-compliant annuity. If you convert assets to income, you can qualify for Medicaid faster. But these roles also do vary from state to state.startwithtruth wrote: ↑Sat Aug 25, 2018 8:07 amThis is over simplified. In Michigan, qualified retirement savings titled in the healthy spouse's name are countable for Medicaid long term care eligibility. An Elder Law attorney confirmed this for me recently although she also mentioned that a court might be willing to rule that some (all?) of the healthy spouse's assets could be protected for their own use. Note that this approach doesn't help if the institutionalized spouse is the one with most of the qualified retirement savings in their name.DC3509 wrote: ↑Tue Aug 21, 2018 12:05 am This is extremely misleading:
$123,600: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2018. (Actual amounts vary by state.)
...the healthy spouse can retain an unlimited amount of his or her own assets as long as they are titled in his or her own name and the institutional spouse will still qualify for Medicaid.
Example: Institutional spouse has IRA in his/her name only worth $123,600. Healthy spouse has IRA in his/her name only worth $1,230,600. Institutional spouse transfers the $123,600 to healthy spouse. As long as all of the other Medicaid requirements are met, Institutional spouse can qualify, even though the healthy spouse is a millionaire. The way her blurb reads you would think that the healthy spouse also has to spend down his or her assets too to get to $123,600 -- that's not the case as long as they are titled separately.
It's worth noting that the rules around Medicaid and irrevocable trusts vary by state; in Michigan for example, Miller trusts aren't an option. Also, for families like mine where virtually all our assets are in qualified retirement accounts, setting up an irrevocable trust in advance isn't an option.DC3509 wrote: ↑Thu Aug 23, 2018 12:17 am
Setting up the asset protection part is not that difficult -- place your non-retirement fund assets into an irrevocable trust at an age when you are very unlikely to need LTC in the next five years. Ideally this would be done in your mid 60s or so. If you survive the 5 year look-back -- and statically you should -- then any of the assets in the irrevocable trust generally cannot be touched by Medicaid. It is tricky, but there are a lot of elder law attorneys out there who specialize in this and know exactly how to do it correctly. It sure costs a lot less than paying LTCI premiums.
Agreed as well about the irrevocable trust -- it works best when you have assets outside of qualified retirement plans.
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Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
“You do realize that Medicaid provides in-home and uses the same in-home health care providers that are otherwise private pay -- right?”littlebird wrote: ↑Thu Aug 23, 2018 11:50 am
And then there are the small, home-based facilities that don’t appear on any list, don’t take Medicaid, and are mostly unknown , until the need arises. That doesn’t even take into account the possibility of care in one’s own home. My spouse was in the first type of setting for two years; now he’s in the second. They were both affordable to us on modest incomes, with modest assets, were, and are providing excellent care, and nothing provided by Medicaid in our senior-predominant area even approaches the quality of either.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pm
If you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.
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Only to the extent that it would be more economical to do so; if a few hours a week, for shopping and bathing, for example, would keep the elder out of a nursing home. But Medicaid is not going to pay the $50,000 for the 6 hours a day that it takes to care for my spouse at home that we have opted for, and that we are self funding on a modest income and assets (for Bogleheads). That’s not even mentioning the differences between choosing and negotiating the terms for your care yourself and having a government bureaucracy do it under their rules.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Only to the extent that it would be more economical to do so; if a few hours a week, for shopping and bathing, for example, would keep the elder out of a nursing home. But Medicaid is not going to pay the $50,000 for the 6 hours a day that it takes to care for my spouse at home that we have opted for, and that we are self funding on a modest income and assets (for Bogleheads). That’s not even mentioning the differences between choosing and negotiating the terms for your care yourself and having a government bureaucracy do it under their rules.littlebird wrote: ↑Sun Aug 26, 2018 9:42 am“You do realize that Medicaid provides in-home and uses the same in-home health care providers that are otherwise private pay -- right?”littlebird wrote: ↑Thu Aug 23, 2018 11:50 am
And then there are the small, home-based facilities that don’t appear on any list, don’t take Medicaid, and are mostly unknown , until the need arises. That doesn’t even take into account the possibility of care in one’s own home. My spouse was in the first type of setting for two years; now he’s in the second. They were both affordable to us on modest incomes, with modest assets, were, and are providing excellent care, and nothing provided by Medicaid in our senior-predominant area even approaches the quality of either.Earl Lemongrab wrote: ↑Wed Aug 22, 2018 2:36 pm
If you are in a LCOL area you will almost surely end up at a facility that accepts both Medicaid and private pay -- there are simply not enough private pay people to make the numbers work otherwise. Just something to consider that spending all that money on a LTCI policy is going to likely land you in the same place as people who just use the program that the government provides. There is a GIANT misperception that private pay places are "nice facilities" and Medicaid facilities are dungeons. In some HCOL areas, that's true; in the rest of the country, it is simply not. If you think a private room is the difference -- I concede that is an important consideration, but that can be had in most states on Medicaid if you simply do some asset protection planning, which is a tiny fraction of the cost of LTCI.
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I do not mean this sarcastically -- do you know that for a fact? Have you looked into it? It is my understanding from talking with several elder law attorneys that the Medicaid home health programs are actually very comprehensive and involve a lot more than just shopping and bathing -- it is essentially the same home health services that you would get from any agency (in fact Medicaid contracts with the same agencies that people pay for anyway -- Medicaid doesn't have its own home health agencies just like it doesn't have its own nursing homes).
https://www.payingforseniorcare.com/med ... -care.html
Yes, you can take the view that you don't want a government bureaucracy to do something you can do on your own -- so I suppose you can reject Social Security and Medicare because those are also government bureaucracies and involve some paperwork.
Re: "75 Must Know Statistics About Long-Term Care: 2018 Edition"
Decided to go for an LTC policy after years of research. I look at it as "insurance" on my savings that I want to pass on or use as I see fit. I do not see costs for care going down and my father has beginning of Az. Sleep better at night but I can see how it is not for everyone. Statistics in the article are useful, and could make someone feel good about being on either side of the LTC fence.