A caution to those contemplating LTCI

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Browser
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A caution to those contemplating LTCI

Post by Browser »

Just read this post in Scott Burns blog regarding a LTCI policy. I've often wondered about just how good these things might be when you come knocking on the door of the insurance company. Especially if you are disabled enough to need the insurance, but don't have an advocate. Reading stories like this, which confirm my worst suspicions, I'm disinclined to buy LTCI and "self-insure" instead.
My mother in law is 93 years old. When she was in her late 70's her husband passed away and she decided to buy a Long Term Care insurance policy. Her account is now worth $146,000. Her intent was noble— she did not want to depend on anyone when she was aged and infirm. That’s the good news.

She has been pretty much incompetent since this spring. She suffered a stroke three years ago, then developed fractures in her vertebrae. This year she has slipped to the point that she cannot take care of herself. My wife and her sister have been trying to get some of the money from the insurance to defray the care costs since May. This company has put obstacle after obstacle in their way with delays and demands for paper work. In the event they ever break the logjam, the max payout is $2,400 per month. So this could last 5 years. I think the chance she will survive another 5 years is pretty remote.

In retrospect, she would have been much better off investing the money, so that when she needed it she could have control and if she did not use it, the remainder would be part of her estate. I cannot imagine that we are the only ones going through this. I hope you
can alert folks to this problem. —T.W., by email
http://assetbuilder.com/scott_burns/if_ ... powder_dry
We don't know where we are, or where we're going -- but we're making good time.
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nisiprius
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Re: A caution to those contemplating LTCI

Post by nisiprius »

A great pity he didn't name the company.
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montanagirl
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Re: A caution to those contemplating LTCI

Post by montanagirl »

Just what you want to be doing at that age, hassling with insurance companies.

The letter didn't actually say she was in a nursing home. I wonder if he expected payment for home care or some other arrangement.
dhodson
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Re: A caution to those contemplating LTCI

Post by dhodson »

It's also why regardless of which insurance product we are talking about that you need a plan to make sure you get your benefits.
letsgobobby
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Re: A caution to those contemplating LTCI

Post by letsgobobby »

dhodson wrote:It's also why regardless of which insurance product we are talking about that you need a plan to make sure you get your benefits.
Can you explain what you mean?
Levett
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Re: A caution to those contemplating LTCI

Post by Levett »

State insurance commissioners track complaints re insurance claims.

Why did Burns settle for an assertion, publish it, and not bother to examine the merits?

Shame on Burns.

Did you hear the one about.....?

Lev
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Re: A caution to those contemplating LTCI

Post by Index Fan »

This is something I've suspected would be a problem, and one of the reasons I dropped a LTCI policy.

I've dealt with fairly petty amounts that health insurance companies have automatically disputed. I assume they'd do the same to those who cannot adequately represent themselves after paying for LTCI coverage for many, many years.
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Re: A caution to those contemplating LTCI

Post by countdown »

I am currently in the claims submission process for a parent's LTC policy. I expected the process to be difficult and the company to attempt to avoid payment. On the contrary, I was pleasantly surprised during this otherwise stressful time to find the carrier to be helpful, prompt, courteous and most importantly, they approved the claim for benefits.

In contrast, the short term care policy carrier (covers the first 90 day period not covered by LTC, and a big rip-off IMO) has been evasive, opaque, difficult to reach, and has still not communicated their decision regarding coverage.
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Jay69
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Re: A caution to those contemplating LTCI

Post by Jay69 »

dhodson wrote:It's also why regardless of which insurance product we are talking about that you need a plan to make sure you get your benefits.
I wonder how many people who have LTC who could have used it but did not being they did not have a plan, thinking of someone who was not married, no kids or advocate, etc.

As a side note I was able to set up and make claim for my MIL on her LTC policy, could not have been easier, called her local agent, my name was on file, worked out and is working out great to date. This could turn into a very easy 20 year claim.
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Alan S.
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Re: A caution to those contemplating LTCI

Post by Alan S. »

When there are more carriers leaving the LTC market than entering it, and there were not very many participants to begin with, you have a dysfunctional marketplace. The Obamacare LT component collapsed before even getting off the ground.

So the concern should not be limited to those contemplating buying the product, it should also greatly concern those paying continued escalating premiums. I agree with Browser. Fortuneately, am in the recommended self insure net assets band.
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Re: A caution to those contemplating LTCI

Post by letsgobobby »

Alan S. wrote:When there are more carriers leaving the LTC market than entering it, and there were not very many participants to begin with, you have a dysfunctional marketplace. The Obamacare LT component collapsed before even getting off the ground.

So the concern should not be limited to those contemplating buying the product, it should also greatly concern those paying continued escalating premiums. I agree with Browser. Fortuneately, am in the recommended self insure net assets band.
what is that band (ie, a link to the reference)?
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Re: A caution to those contemplating LTCI

Post by nisiprius »

By the way... just one anecdotal data point and they weren't on a recorded line under oath or anything... but when I was shopping for LTCi I called a local nursing home's billing office and asked if any of their residents had LTCi and whether they were aware of any problems getting claims paid. They said they had "a few" residents on LTCi and that they weren't aware of any problems.

There was a major news story a few years ago that showed humongous differences in the percentages of complaints lodged against different LTCi insurers. Virtually everything I've ever read on LTCi has some (rather evasive and unsatisfactory) verbiage about being sure to pick a "reputable" insurer. So it's known that there are definitely bad apples writing bad LTCi. What I don't know is whether the companies people said were "reputable" have continued to be, or will continue to be.
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BruDude
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Re: A caution to those contemplating LTCI

Post by BruDude »

Most of the LTCi complaints are for the older policies from the 80's and 90's that all had different triggers and were not tax-qualified. The newer tax-qualified policies all have the same trigger (2 of the 6 activities of daily living cannot be performed) and are easily certified by a licensed physician. I'll bet the policy referenced is not tax-qualified.
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Re: A caution to those contemplating LTCI

Post by JW-Retired »

letsgobobby wrote:
Alan S. wrote:When there are more carriers leaving the LTC market than entering it, and there were not very many participants to begin with, you have a dysfunctional marketplace. The Obamacare LT component collapsed before even getting off the ground.

So the concern should not be limited to those contemplating buying the product, it should also greatly concern those paying continued escalating premiums. I agree with Browser. Fortuneately, am in the recommended self insure net assets band.
what is that band (ie, a link to the reference)?
Yes, what is the band?
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boyler99
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Re: A caution to those contemplating LTCI

Post by boyler99 »

Just to add another data point... My father's LTC policy with John Hancock almost lapsed when he developed Alzeimers in March. I found out about it just in time, paid the premium, and put him on claim immediately. Very smooth process. He has been in two facilities and John Hancock has been easy to deal with. All claims have been paid. The assisted living facility submits invoices to JH monthly, my dad's checking account is direct deposited monthly, and direct debited from assisted living. Could not be easier. This is a $150K policy (in today's dollars) taken out in 1996 for annual premium of $1300 (it had a 5% COLA when originally taken out). I am really happy for my father because this will protect his fairly limited assets for my mother. I realize LTC has changed a lot since 1996 however so the current premium structure might make LTC less attractive.
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Re: A caution to those contemplating LTCI

Post by Blues »

Good to hear about the experience with John Hancock. My wife and I have policies with them which we got at very good rates some years back.

I hope to never have to employ either policy.
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Re: A caution to those contemplating LTCI

Post by manwithnoname »

Browser wrote:Just read this post in Scott Burns blog regarding a LTCI policy. I've often wondered about just how good these things might be when you come knocking on the door of the insurance company. Especially if you are disabled enough to need the insurance, but don't have an advocate. Reading stories like this, which confirm my worst suspicions, I'm disinclined to buy LTCI and "self-insure" instead.
My mother in law is 93 years old. When she was in her late 70's her husband passed away and she decided to buy a Long Term Care insurance policy. Her account is now worth $146,000. Her intent was noble— she did not want to depend on anyone when she was aged and infirm. That’s the good news.

She has been pretty much incompetent since this spring. She suffered a stroke three years ago, then developed fractures in her vertebrae. This year she has slipped to the point that she cannot take care of herself. My wife and her sister have been trying to get some of the money from the insurance to defray the care costs since May. This company has put obstacle after obstacle in their way with delays and demands for paper work. In the event they ever break the logjam, the max payout is $2,400 per month. So this could last 5 years. I think the chance she will survive another 5 years is pretty remote.

In retrospect, she would have been much better off investing the money, so that when she needed it she could have control and if she did not use it, the remainder would be part of her estate. I cannot imagine that we are the only ones going through this. I hope you
can alert folks to this problem. —T.W., by email
http://assetbuilder.com/scott_burns/if_ ... powder_dry
Are you questioning why the necessary paper work has to be filed and verified in the format required by the insurance co in order to get paid? If you cant handle the procedural requirements necessary to submit a claim don't buy the insurance.

If you think LTC insurers are a pain try dealing with govt agencies. I assist vets in getting the VA benefits they are entitled to by law and am constantly correcting errors made by VA claims processors who don't even read or understand the VA regulations when they reject claims. Once I cite the applicable regulation the vet get benefits with back pay. No brainer.

Learn how to deal with a bureaucracy and stop kvetching.
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Re: A caution to those contemplating LTCI

Post by letsgobobby »

manwithnoname wrote:
Browser wrote:Just read this post in Scott Burns blog regarding a LTCI policy. I've often wondered about just how good these things might be when you come knocking on the door of the insurance company. Especially if you are disabled enough to need the insurance, but don't have an advocate. Reading stories like this, which confirm my worst suspicions, I'm disinclined to buy LTCI and "self-insure" instead.
My mother in law is 93 years old. When she was in her late 70's her husband passed away and she decided to buy a Long Term Care insurance policy. Her account is now worth $146,000. Her intent was noble— she did not want to depend on anyone when she was aged and infirm. That’s the good news.

She has been pretty much incompetent since this spring. She suffered a stroke three years ago, then developed fractures in her vertebrae. This year she has slipped to the point that she cannot take care of herself. My wife and her sister have been trying to get some of the money from the insurance to defray the care costs since May. This company has put obstacle after obstacle in their way with delays and demands for paper work. In the event they ever break the logjam, the max payout is $2,400 per month. So this could last 5 years. I think the chance she will survive another 5 years is pretty remote.

In retrospect, she would have been much better off investing the money, so that when she needed it she could have control and if she did not use it, the remainder would be part of her estate. I cannot imagine that we are the only ones going through this. I hope you
can alert folks to this problem. —T.W., by email
http://assetbuilder.com/scott_burns/if_ ... powder_dry
Are you questioning why the necessary paper work has to be filed and verified in the format required by the insurance co in order to get paid? If you cant handle the procedural requirements necessary to submit a claim don't buy the insurance.

If you think LTC insurers are a pain try dealing with govt agencies. I assist vets in getting the VA benefits they are entitled to by law and am constantly correcting errors made by VA claims processors who don't even read or understand the VA regulations when they reject claims. Once I cite the applicable regulation the vet get benefits with back pay. No brainer.

Learn how to deal with a bureaucracy and stop kvetching.
the most common reason for long term care is cognitive impairment. Tell me, are the nearly-demented or already-demented kvetching when they can't maneuver through insurance company roadblocks?
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Re: A caution to those contemplating LTCI

Post by nisiprius »

(Shrug) So what we have some anecdotes about people having a rough time with insurance companies--try this 2007 New York Times story, a couple of people reporting successful claims, an insurance agent who says the problems were mostly with some old policies and everything's OK these days...

...and a 2013 New York Times story, Fine Print and Red Tape in Long-Term Care Policies, with some nightmarish stories and--boldface mine--
Everything is not rosy,” said Jesse Slome, director of the American Association for Long Term Care Insurance. “When insurers stop selling or exit the business, many of them hire these third-party administrators to adjudicate claims and that is where interpretations don’t seem to be as liberal.”

Insurance agents who have specialized in long-term care policies for a couple of decades, however, told me that most of the top-rated insurers pay claims without issue.
Sounds like a mess to me. MOST of the top-rated insurers pay claims without issue? Well, uh, which are the top-rated insurers that DON'T?

And how persistent is "top-rated?" You buy LTCi maybe thirty years before you need it. Could be frustrating to buy a policy from a top-rated insurer in 1990 and then get told when it's time to make a claim, if you have problems, "it's your own fault for buying from that insurer, they're not a top-rated insurer any more?"
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Mitchell777
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Re: A caution to those contemplating LTCI

Post by Mitchell777 »

This is something I've been forced to think about lately due to an aging parent. I'm not taking a side on what can be an emotional issue here, but just explaining my own uncertaintly. I am POA for my parent (she has no LTCI) and forced to sign the large checks for her care. Worried about when she runs out of money and the Medicaid coverage. As I sign the checks I wonder if she should have bought LTCI. Then I wonder how much the insurance company MAY fight me to pay. I admit I've had past events with insurance companies that have made me biased against how they may do things. My point is that as I think about what I should do for myself, I am still uncertain. Since I have more funds than my parent I will probbaly pay out of my investments (note I did not say self insure so we can avoid that one) but I am not certain that is best for me or not
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Re: A caution to those contemplating LTCI

Post by manwithnoname »

letsgobobby wrote:
manwithnoname wrote:
Browser wrote:Just read this post in Scott Burns blog regarding a LTCI policy. I've often wondered about just how good these things might be when you come knocking on the door of the insurance company. Especially if you are disabled enough to need the insurance, but don't have an advocate. Reading stories like this, which confirm my worst suspicions, I'm disinclined to buy LTCI and "self-insure" instead.
My mother in law is 93 years old. When she was in her late 70's her husband passed away and she decided to buy a Long Term Care insurance policy. Her account is now worth $146,000. Her intent was noble— she did not want to depend on anyone when she was aged and infirm. That’s the good news.

She has been pretty much incompetent since this spring. She suffered a stroke three years ago, then developed fractures in her vertebrae. This year she has slipped to the point that she cannot take care of herself. My wife and her sister have been trying to get some of the money from the insurance to defray the care costs since May. This company has put obstacle after obstacle in their way with delays and demands for paper work. In the event they ever break the logjam, the max payout is $2,400 per month. So this could last 5 years. I think the chance she will survive another 5 years is pretty remote.

In retrospect, she would have been much better off investing the money, so that when she needed it she could have control and if she did not use it, the remainder would be part of her estate. I cannot imagine that we are the only ones going through this. I hope you
can alert folks to this problem. —T.W., by email
http://assetbuilder.com/scott_burns/if_ ... powder_dry
Are you questioning why the necessary paper work has to be filed and verified in the format required by the insurance co in order to get paid? If you cant handle the procedural requirements necessary to submit a claim don't buy the insurance.

If you think LTC insurers are a pain try dealing with govt agencies. I assist vets in getting the VA benefits they are entitled to by law and am constantly correcting errors made by VA claims processors who don't even read or understand the VA regulations when they reject claims. Once I cite the applicable regulation the vet get benefits with back pay. No brainer.

Learn how to deal with a bureaucracy and stop kvetching.
the most common reason for long term care is cognitive impairment. Tell me, are the nearly-demented or already-demented kvetching when they can't maneuver through insurance company roadblocks?
If they are cognitively impared then they should have a guardian, conservator or an attorney in fact to prepare the documents for them.
No brainer
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Re: A caution to those contemplating LTCI

Post by placeholder »

nisiprius wrote:Sounds like a mess to me. MOST of the top-rated insurers pay claims without issue? Well, uh, which are the top-rated insurers that DON'T?
The same applies to many other forms of insurance as you can see after any natural disaster with tales of homeowners fighting with Allstate and State Farm and all the other big companies.
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Re: A caution to those contemplating LTCI

Post by letsgobobby »

manwithnoname wrote:
If they are cognitively impared then they should have a guardian, conservator or an attorney in fact to prepare the documents for them.
No brainer
Do you have any experience in this field? What you are proposing is black and white is far from it.
Last edited by letsgobobby on Fri Dec 06, 2013 11:23 pm, edited 1 time in total.
midmoder
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Re: A caution to those contemplating LTCI

Post by midmoder »

Conseco Inc. (and its subsidiary Banker's Life) is one of the most notorious companies for denying claims.

http://www.oregonlive.com/finance/index ... ss-ac.html

I don't think bad faith is a problem with the top companies: John Hancock, Northwestern Mutual, Mass Mutual, and a few others.

With assets that will be anywhere from 1.2 to 1.4M when we retire, I feel we have no choice but to buy. I plan to do so sometime next year.
countdown
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Re: A caution to those contemplating LTCI

Post by countdown »

Midmoder:

Thank you very much for that link!
Bankers Life is the company dragging their feet regarding my parent's Short Term Care claim (a minor claim maxing at $13,500 for the first 90 days). They are 'investigating, reviewing for any possible fraud', etc. etc....all the while the premium runs because there is no premium waiver." Horrible policy and company.

At the same time, Genworth/GE has been stellar in their processing and approval of the Long Term Care claim which is for an exponentially greater amount of money, and has been fully documented. (This same documentation was sent to Bankers.)

i'm going to fax Bankers the linked article.
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Re: A caution to those contemplating LTCI

Post by Dandy »

I'm sure not all insurance companies or all claims from this company are handled this badly. But, payouts are expensive and profit making firms look for ways to delay or avoid expenses. Sometimes this is done indirectly by incentives to control expenses and that leaves executives with plausible denial when the people under them cut corners. This is delay/avoidance is further complicated by what is needed to qualify for payment. For life insurance either you are dead or not dead (most of the time - you could be missing). But the extent of the disability that qualifies you to receive care and the facilities or helpers that qualify to give care and be less precise. That leaves the door open to insurance fraud or insurance company bad practices.

You have to wonder if this poor 95 year old didn't have relatives and friends fighting for her would the company ever pay.
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Re: A caution to those contemplating LTCI

Post by midmoder »

If you google "bankers life" and "bad faith", you get several hits.

Here's another story: http://www.postandcourier.com/article/2 ... 121029867/

Unfortunately, it looks like BL got a slap on the wrist for the Oregon case:

http://www.oregonlive.com/business/inde ... 6_mil.html
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Re: A caution to those contemplating LTCI

Post by gerrym51 »

my wife and i have GEnworth policies bought 10 years ago. have never had to use them and never had a rate increase-yet.

when we bought i researched well.

You probably will be fine if you purchase from one of the 3 big suppliers left. I will not reccomend any but i did tell you who we bought from.

I find people on this board occasionaly post stories about this so to justify why they did not by LTCI.


to each his own :mrgreen:
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Re: A caution to those contemplating LTCI

Post by Browser »

gerrym51 wrote:my wife and i have GEnworth policies bought 10 years ago. have never had to use them and never had a rate increase-yet.

when we bought i researched well.

You probably will be fine if you purchase from one of the 3 big suppliers left. I will not reccomend any but i did tell you who we bought from.

I find people on this board occasionaly post stories about this so to justify why they did not by LTCI.


to each his own :mrgreen:
I have LTCI. It's called Medicaid.
We don't know where we are, or where we're going -- but we're making good time.
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Re: A caution to those contemplating LTCI

Post by gerrym51 »

Browser wrote:
gerrym51 wrote:my wife and i have GEnworth policies bought 10 years ago. have never had to use them and never had a rate increase-yet.

when we bought i researched well.

You probably will be fine if you purchase from one of the 3 big suppliers left. I will not reccomend any but i did tell you who we bought from.

I find people on this board occasionaly post stories about this so to justify why they did not by LTCI.


to each his own :mrgreen:
I have LTCI. It's called Medicaid.

I have medicaid also-for long,long term care. my wife and I policies are 4 years. Under approved medicaid rules for people with ltci medicaid will let you keep that amounts of assets. remember if your on medicaid-your spouse is left with not much.
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Re: A caution to those contemplating LTCI

Post by nisiprius »

gerrym51 wrote:my wife and i have GEnworth policies bought 10 years ago. have never had to use them and never had a rate increase-yet.

when we bought i researched well.

You probably will be fine if you purchase from one of the 3 big suppliers left. I will not reccomend any but i did tell you who we bought from.

I find people on this board occasionaly post stories about this so to justify why they did not by LTCI.


to each his own :mrgreen:
I bought LTCi, I think it's probably a good idea, I bought from one of the ones always named as "reputable," and have completed the ten-annual-payment plan with no rate increases. I think people who use the phrase "self-insurance" are delusional, particularly when a) they base their planning on the "average" length of stay, ignoring the extraordinarily skewed distribution and the extraordinarily long tail, and b) when pressed, they almost invariably acknowledge that their "self-insurance" plan does not involve segregating funds in anyway, but is basically hope that they can pile up enough to just pay for anything that happens.

All the same, to someone contemplating a purchase that big, so say "you probably will be fine if you purchase from one of the 3 big suppliers left" is not exactly reassuring, either. Was not Conseco once one of the "big suppliers?"

It's a real problem. Currently I don't think there's any good solution.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: A caution to those contemplating LTCI

Post by Browser »

I have medicaid also-for long,long term care. my wife and I policies are 4 years. Under approved medicaid rules for people with ltci medicaid will let you keep that amounts of assets. remember if your on medicaid-your spouse is left with not much.
What does than mean? I don't understand how that works.
We don't know where we are, or where we're going -- but we're making good time.
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Browser
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Re: A caution to those contemplating LTCI

Post by Browser »

I don't think self-insuring is delusional at all. You should plan on having enough money held in reserve to cover maybe a year or two of long-term care. That takes care of most people who ever need it. If you croak and never need it, it goes to your offspring or your favorite charity. The "long tail" isn't solved by LTCI - it is solved by Medicaid if it's solved at all.
We don't know where we are, or where we're going -- but we're making good time.
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Re: A caution to those contemplating LTCI

Post by Mitchell777 »

This may differ by state, but I have been involved in this recently. Would I rather have the funds ,or the LTCI, so that Medicaid would never be needed. Absolutely. For most people is it necessary? No. What you do need is evough "private pay" to get into the door of a decent facility that will accept Medicaid once you're money runs out. In my area, and it will differ by area, that is enough for about 2 to 3 years of private pay for skilled nursing (longer for assisted living but Medicaid does not cover assisted living). In skilled nursing once the money runs out you stay where you are. I'm seeing people every day, some are private pay and some are Medicaid. They get the same treatment, few workers know which is which. I would rather NOT go to Medicaid because I may want to change facilities or have more options for a private room etc. I am NOT suggesting it is a good or bad idea to buy LTCI. I am less sure of that now than ever. If one ends up for many years in skilled nursing either private pay or LTCI may well run out and you may have fewer choices. On the other hand I saw about 10 people this morning in a skilled nursing facility who, sadly, I'm sure have no idea where they are.
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Re: A caution to those contemplating LTCI

Post by Browser »

Mitchell777 wrote:This may differ by state, but I have been involved in this recently. Would I rather have the funds ,or the LTCI, so that Medicaid would never be needed. Absolutely. For most people is it necessary? No. What you do need is evough "private pay" to get into the door of a decent facility that will accept Medicaid once you're money runs out. In my area, and it will differ by area, that is enough for about 2 to 3 years of private pay for skilled nursing (longer for assisted living but Medicaid does not cover assisted living). In skilled nursing once the money runs out you stay where you are. I'm seeing people every day, some are private pay and some are Medicaid. They get the same treatment, few workers know which is which. I would rather NOT go to Medicaid because I may want to change facilities or have more options for a private room etc. I am NOT suggesting it is a good or bad idea to buy LTCI. I am less sure of that now than ever. If one ends up for many years in skilled nursing either private pay or LTCI may well run out and you may have fewer choices. On the other hand I saw about 10 people this morning in a skilled nursing facility who, sadly, I'm sure have no idea where they are.
My mother was recently in a nursing home for rehab, so I got a close look at that world. I was told that Medicaid and private pay patients are not segregated in that facility, but I don't believe it. And that certainly wouldn't be a standard practice of nursing homes, anyway. If you can afford a private room, life is much better. Your quality of life in nursing home is at the mercy of whoever your roommate ends up being and where your room is located. There were differences. Some areas were chaotic and disturbing with overworked staff. Others had hospital-like quiet and staff that seemed unharried. I saw residents in private rooms that looked like little apartments with big screen TV, nice furniture and the like. Medicaid won't pay for a private room in a nicer location, but I'm thinking that if you have supplemental funds, either from a trust or a relative, you can upgrade. It might be worth the trouble to figure out how a trust can be set up as part of a "supplemental upgrade funding plan." I'm just starting to do that. There are various kinds of trusts . Ordinarily funds from a trust can't be excluded from Medicaid if they are used to pay for room and board - only funds that are used for medical care can be. But it's worth looking into.

BTW, what will LTCI pay for? I imagine all that's covered is enough for a semi-private room. Seems to me the main reason for LTCI is to preserve assets for your heirs, it that's important to you. Not sure it's going to do YOU that much good vs. having enough reserved to pay the first year or two as private pay.
We don't know where we are, or where we're going -- but we're making good time.
letsgobobby
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Re: A caution to those contemplating LTCI

Post by letsgobobby »

The reason LTCI doesn't work is because too many people end up needing it. If 50% of all individuals need long term care in their lifetime, you can immediately see that the premiums have to be very high for a system to work. In essence, LTCI becomes more like a savings plan than an insurance plan, and the rate of savings need to be high. If only 5% of people needed long term care, then the premiums would be far lower.

I'd still like to know what the 'recommended range' of assets is for someone to self-insure.
Mitchell777
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Re: A caution to those contemplating LTCI

Post by Mitchell777 »

I will not copy all that again to save space. In the end it is all about what you believe. If you believe all you noted, that is all that matters. I can tell you rehab and skilled nursing are not the same. I just went from one to another in the past few months - night and day with rehab being much nicer. Also if you believe private rooms are easy to get, you live in an area much different than mine. I have made all the phone calls. Some of the best facilities will tell you outright that private rooms are for people who would disrupt another person. Another told me the list for a private room is extremely long. Both of those charge $10K a month for semi private and are large facilities. A third has more private rooms and the cost was $143K a year. As far as people being treated differently depending on how they pay, that is not happening in any decent facility I'm aware of, certainly not the faith based ones I would prefer. Don't get me wrong. I prefer a private room and am trying to get one now for my parent. Once private pay runs out I would be more than willing to pay the extra $1K per month myself if possible - I read an article a couple weeks ago where one state just recently allowed Medicaid patients to have a private room paid for by a friend or relative - had not allowed it prior. If you had asked me a couple weeks ago I would have said that a lot of money will make everything much better if and when you need nursing care. I am no longer so sure unless you have enough money to bring the skilled nursing care into your home. It is all about peace of mind. As long as one can live and be comfortable with their choices that's all that matters because no one knows what really is going to happen. As far as LTCI vs pay from assets, for me, I'm less certain than ever
gerrym51
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Re: A caution to those contemplating LTCI

Post by gerrym51 »

Browser wrote:
I have medicaid also-for long,long term care. my wife and I policies are 4 years. Under approved medicaid rules for people with ltci medicaid will let you keep that amounts of assets. remember if your on medicaid-your spouse is left with not much.
What does than mean? I don't understand how that works.

what i meant is i and the wife own 4 year ltci policies. most stays are less than 3 years. 4 year policies seemed to be prudent(and affordable). If one of us needs really really long long term care we of course will have to spend down our assets. However most states(mine does) have ltci partnership rules. what this does is let you keep the amount of assets equal to the value of the ltci policy.

having said all this i hope we never use them.
midmoder
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Re: A caution to those contemplating LTCI

Post by midmoder »

If I were single, I would not purchase it. But I am married, no kids, with enough assets to protect, but not enough to self-insure. My fear is that one of us gets Alzheimer's and requires many years of longterm care, thus decimating our assets for the surviving spouse.

I don't want these worries to keep me up at night so in spite of all the negatives, I'm leaning strongly to getting it. I've been shopping and am leaning to Northwestern Mutual.
Minot
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Re: A caution to those contemplating LTCI

Post by Minot »

midmoder wrote:If I were single, I would not purchase it. But I am married, no kids, with enough assets to protect, but not enough to self-insure. My fear is that one of us gets Alzheimer's and requires many years of longterm care, thus decimating our assets for the surviving spouse.

I don't want these worries to keep me up at night so in spite of all the negatives, I'm leaning strongly to getting it. I've been shopping and am leaning to Northwestern Mutual.
I am single, have no kids, and I am not purchasing it; it doesn't seem to me to offer enough benefits to someone in my position to make it worthwhile.
goodenoughinvestor
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Re: A caution to those contemplating LTCI

Post by goodenoughinvestor »

One aspect of LTCI that's being left out of this discussion is that many policies will pay for in-home care so the person in decline does not have to go into a nursing home. I experienced this first-hand with my father who became physically debilitated but was mentally "all there." His LTCI (bought in the 70s) paid for home health care 24/7 so he was able to spend the last four years of his life at home with my mother. Yes, he could have "self insured" and paid for this care out of pocket, but there would now be significantly fewer funds available for my mother who is not infirmed mentally or physically and (we hope) will be around for a very long time.
Topic Author
Browser
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Re: A caution to those contemplating LTCI

Post by Browser »

goodenoughinvestor wrote:One aspect of LTCI that's being left out of this discussion is that many policies will pay for in-home care so the person in decline does not have to go into a nursing home. I experienced this first-hand with my father who became physically debilitated but was mentally "all there." His LTCI (bought in the 70s) paid for home health care 24/7 so he was able to spend the last four years of his life at home with my mother. Yes, he could have "self insured" and paid for this care out of pocket, but there would now be significantly fewer funds available for my mother who is not infirmed mentally or physically and (we hope) will be around for a very long time.
I'm not sure, but thought that in some states Medicaid will now cover care in-home as well. Seems it costs Medicaid less to do this than pay for institutional care. Worth checking into.
We don't know where we are, or where we're going -- but we're making good time.
mss
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Re: A caution to those contemplating LTCI

Post by mss »

Just another data point here:

We bought my mother a LTCI policy from Transamerica quite a few years ago, I don't remember exactly when. She ended up needing to go to assisted living in 2007 and then to a nursing home in 2011 until she passed away in 2013.

Her policy had these features:

Lifetime benefit (don't know if you can get this anymore)
90-day elimination period (you pay first 90 days)
$150/day benefit
5% simple interest escalator
premium coverage (Waives the premium when receiving the benefit, otherwise you would have to keep paying.)

Transamerica was excellent and I never had an issue getting authorized or paid. You do have to submit a claim every month and they pay after services have been rendered. You will also have to be reauthorized periodically: a nurse interviews the policy holder to be sure that they still meet the requirements for coverage.

In total, Transamerica paid over $325,000 on her policy and we paid a tiny fraction of that in premiums.

One more thing: She was most recently in a nursing home (that we were very happy with) north of Austin, TX, in a semi-private room at a rate of $165 per day, or about $60,000 per year.
goodenoughinvestor
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Re: A caution to those contemplating LTCI

Post by goodenoughinvestor »

I think MSS's story is an important one. Her mother needed assistance for many years. It worries me that so many people seem to assume that they will only need help for the last year or two of their lives. An increasing number of us will live into very old age--and will need help for many years. No, LTCI isn't the right choice for everybody. But when making the decision be sure your notion of the future and what it will take to "self insure" is based on current life expectancy stats for people of your age, socioeconomic standard, lifestyle and gender. And if you're married, especially if you're male, remember that your spouse may need assistance for many years after you're gone.
midmoder
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Re: A caution to those contemplating LTCI

Post by midmoder »

mss wrote: Her policy had these features:

Lifetime benefit (don't know if you can get this anymore)
90-day elimination period (you pay first 90 days)
$150/day benefit
5% simple interest escalator
premium coverage (Waives the premium when receiving the benefit, otherwise you would have to keep paying.)
No more lifetime benefit policies, I believe. And more importantly, inflation-protection options have become so expensive as to be unaffordable.
john94549
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Re: A caution to those contemplating LTCI

Post by john94549 »

My Mother chose to "self-insure", so to speak, for long-term care. She just passed away. As it turns out, her wise financial investments are intact. She never really trusted LTC insurance companies. Maybe wise, maybe foolish, maybe she just won the bet. That said, cynics (and I count myself as one) might argue that those most in need of the benefits are the least able to fight for them.
Gnirk
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Location: Western Washington

Re: A caution to those contemplating LTCI

Post by Gnirk »

After my dad passed away at the age of 66, my mother (64) took out an LTCIpolicy. 20 days waiting period, $xxx per day with 5%/year inflation factor, 4 years coverage. Payable to her, not to a facility. She is in her 9th year of alzheimer's, has been in a care facility for 6 years.

The process for a claim went as follows: I (using my durable power of attorney) called Genworth, telling them I wanted to file a claim. They had me fill out a lot of paperwork, and had her doctor and the owner of the care home do the same. Genworth sent nurses out to the home twice, and after two months I received notice they accepted the claim and they have been paying monthly since then. One more year to go on the policy, and then we will private pay again. Fortunately, mom always lived below her means and has the funds necessary to pay for her care beyond the age of 105. She is 88 now.

However, if I hadn't know about the policy, as happened with a friend of mine, she would never have received payment because she was completely incapable of filing a claim or even remembering she had insurance. Every person who has an LTCI policy NEEDS to let whomever they have designated as DPOA know they have a policy and where it's located. She paid less than $20,000 in premiums over a 20 year period, and the policy will pay out approximately $220,000.

Did she need it? At the time she applied for it, yes.
Last edited by Gnirk on Sat Dec 07, 2013 8:25 pm, edited 1 time in total.
manwithnoname
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Re: A caution to those contemplating LTCI

Post by manwithnoname »

letsgobobby wrote:
manwithnoname wrote:
If they are cognitively impared then they should have a guardian, conservator or an attorney in fact to prepare the documents for them.
No brainer
Do you have any experience in this field? What you are proposing is black and white is far from it.
I do. I don't know why durable POAs are not utilized to prevent the problems you have illustrated. What do
persons in your state do to avoid the problem that has been described in the OP.

Your comment:

What you are proposing is black and white is far from it.

did you mean as black and white not is black and white?

by the way what kind of advice do you give?
Last edited by manwithnoname on Sat Dec 07, 2013 8:28 pm, edited 1 time in total.
john94549
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Re: A caution to those contemplating LTCI

Post by john94549 »

Gnirk, congrats to you and your Mom. However, one wonders how folks with Alzheimers, and no close (and dutiful) relatives, can even attempt to navigate.
Last edited by john94549 on Sat Dec 07, 2013 8:28 pm, edited 1 time in total.
Topic Author
Browser
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Re: A caution to those contemplating LTCI

Post by Browser »

However, if I hadn't know about the policy, as happened with a friend of mine, she would never have received payment because she was completely incapable of filing a claim or even remembering she had insurance. Every person who has an LTCI policy NEEDS to let whomever they have designated as DPOA know they have a policy and where it's located.
Exactly. I wonder how carefully people have thought about this. Even if you have a spouse, you can't be sure they're not going to be in the same boat with you. If you have kids, they should sure be informed. For others, we need to begin thinking about setting up a trust for ourselves to take care of this stuff. My attorney explained to me this should be done far enough in advance of need that you have time to visit with the trustees so they can become familiar with you and your needs and desires. Not enough to just write down instructions on a piece of paper. They need to know you as a person and you need to have confidence in them.
We don't know where we are, or where we're going -- but we're making good time.
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