Long-Term Care Decision

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

willthrill81 wrote: Tue Aug 13, 2019 4:47 pm
pintail07 wrote: Tue Aug 13, 2019 4:35 pm The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
The statement might be true, but it's changing the mode of comparison to one that is not familiar to most people and in such a way as to potentially minimize the perceived cost of LTCi. We don't buy auto insurance or medical insurance for 'basis points of our portfolio'; we pay X dollars for them, which is also true of LTCi, unless there is some policy out there actually priced in that manner that I've never heard of before.
If you're a Washington resident, in two years and 5 months you'll start to pay 58 basis points for every dollar you earn. It will fund the Washington Long-Term Care Trust.

In exchange for that 58 basis points every pay period, you'll get a WHOPPING $36,500 of long-term care benefits from the state of Washington. That's right: $36,500 (for life).

(However, those of us who reside in Washington who already own long-term care insurance won't have to pay the tax.)
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

TN_Boy wrote: Tue Aug 13, 2019 5:20 pm
If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html

I'll go one step further.
Only about 1 in 10 LTCi policyholders will make a claim.
(I know, that's not very salesy of me).
But, if you think 1 in 10 is "good odds", then you don't understand risk.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

Silk McCue wrote: Tue Aug 13, 2019 5:40 pm
TomatoTomahto wrote: Tue Aug 13, 2019 3:30 pm
cognovimus wrote: Tue Aug 13, 2019 2:29 pm Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.
Cognovimus, you are new here. Wow is not. He posts, extensively and chronically, on one topic only: LTCi. After much discussion, he finally acknowledged that it's his profession. Many of us know better than to encourage him, but it's sometimes tempting.

Good luck.
If it weren’t for WOW we wouldn’t have any knowledgeable voice to provide informed perspective or reply to those that are adamantly opposed to this product because they are living in the past or living in denial. He is treated poorly by too many folks here.

It certainly is his profession but don’t see how that does him any good given we have no clue who he is.

Cheers

Thank you.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

adamthesmythe wrote: Tue Aug 13, 2019 6:05 pm
Many of us have wished for real examples of policies with enough details. Sorry, basis points don't cut it.
Are these enough details for you:

A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

willthrill81 wrote: Tue Aug 13, 2019 6:36 pm As TN_Boy noted, most financial professionals who don't have a vested interested in LTCi are not strong proponents of it.
Why do Vanguard financial advisors recommend long-term care insurance?
cognovimus
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Re: Long-Term Care Decision

Post by cognovimus »

WoW2012 wrote: Wed Aug 14, 2019 11:44 pm
willthrill81 wrote: Tue Aug 13, 2019 5:00 pm
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.

I was replying to cognovimus.
He's 63.
His wife is 61.
$1.5M in shared LTCi benefits.
$6,000/yr combined premium.
It's available in every state except CA, NY, and MT.
(Those states have similar policies, but not exactly the same.)
Insurer(s) names that provide shared care of $1.5 million for $6; coverage per day, # years, elimination period; inflation protection? As I said, the quotes I got (for shared care) were considerably more for less coverage. One of my reservations has been that I already know that I would still be partly paying out of pocket for the care even with the policies I have to pick from. If I'm going to give up $6K per year (which will increase), I'd like to have a reasonable expectation that I won't need to think about it again until the need for care arises for one of us.
TravelforFun
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Re: Long-Term Care Decision

Post by TravelforFun »

WoW2012 wrote: Wed Aug 14, 2019 11:59 pm
TN_Boy wrote: Tue Aug 13, 2019 5:20 pm
If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html

I'll go one step further.
Only about 1 in 10 LTCi policyholders will make a claim.
(I know, that's not very salesy of me).
But, if you think 1 in 10 is "good odds", then you don't understand risk.
I have LTCi and I want to be one of the nine.

When it comes to the insurance game, I want to lose to the insurance companies and these are the policies I have lost money on so far (and I'm very glad): life, home, car, umbrella, and LTC.

I keep reminding people insurance is not investing.

The only insurance policy that I want to win is the annuity which I purchased this year.

TravelforFun
TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy »

WoW2012 wrote: Wed Aug 14, 2019 11:59 pm
TN_Boy wrote: Tue Aug 13, 2019 5:20 pm
If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html

I'll go one step further.
Only about 1 in 10 LTCi policyholders will make a claim.
(I know, that's not very salesy of me).
But, if you think 1 in 10 is "good odds", then you don't understand risk.
Based on your posts, I think I understand risk a lot better than you do.
TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy »

WoW2012 wrote: Thu Aug 15, 2019 12:03 am
willthrill81 wrote: Tue Aug 13, 2019 6:36 pm As TN_Boy noted, most financial professionals who don't have a vested interested in LTCi are not strong proponents of it.
Why do Vanguard financial advisors recommend long-term care insurance?
Could you point me to where vanguard broadly recommends the purchase of long term care insurance?

Here is a paper by vanguard on retirement health care planning. It includes a section on long term care:

https://advisors.vanguard.com/VGApp/iip ... rCstsInRet

The pdf with the study is linked under "Read whitepaper"

Here are some excerpts:

"Long-term care insurance. Long-term care insurance pays for only a small portion of care in the U.S. Such policies have historically been expensive, and most have benefit caps that may reduce the usefulness of insurance in the most severe scenarios. However, as the market evolves, new policy types may emerge that individuals should evaluate. For now, traditional long-term care insurance policies remain a relatively small player in the paid long-term care space."

and

"Long-term care costs may actually be the biggest concern for most retirement planning scenarios, because the consumption of long-term care varies significantly. Half of individuals will incur no costs, and a quarter will consume less than $100,000. However, 15% will consume more than $250,000. Individuals should plan for these potential costs. Factors such as individual health, family history, and presence of support networks will inform each person’s desired long-term care need."

The paper is from June, 2018. I think a careful reading of unbiased sources (such as this paper) will reveal no strong recommendation to buy LTC insurance.

Got to go, off to visit relative in LTC facility.
walkindude
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Re: Long-Term Care Decision

Post by walkindude »

WoW2012 wrote: Wed Aug 14, 2019 11:27 pm I was not being facetious.
A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.
I wish my parents had that policy instead of the one they bought more than 25 years ago. They are now 88/85 and paying 8k+ and 4k+ for $100,000 each for 3 years ($600,000 possible coverage). They want to quit paying, but I keep telling them they're more likely to need it now than ever before.

How can a company stay in business @$6k/year for $1.5M of coverage? Sort of seems like a recipe for inflating rates as has occurred with my parents. I think they started at $3500 total and are now over $12000. And they have way less coverage than you're talking about.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm
But I would like to follow up a bit on the comment that desirability of a policy depends on circumstances, in addition to assets. WoW's comments often focus on "preservation of assets" as a justification.

Long-term care insurance is not about protecting assets. It's about protecting income.
You don't pay bills with assets. You pay bills with income.

Mr. and Mrs. Smith have $1.5M in assets. Mr. Smith needs long-term care and it costs $500K (which is not unreasonable). Mr. Smith dies. Many people on this board think that Mrs. Smith will be fine because she still has $1.0M in assets.

After Mr. Smith dies, Mrs. Smith loses one of their social security checks.
She may even lose all or a lot of Mr. Smith's pension.
She has also lost (FOREVER) the income the $500K could have generated for her for the rest of her life.

Mr. Smith thought he'd decided to self-insure.
What he really decided to do was to force his wife to live on about half of their income after he dies.
bsteiner
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Re: Long-Term Care Decision

Post by bsteiner »

WoW2012 wrote: Wed Aug 14, 2019 11:59 pm ...
Only about 1 in 10 LTCi policyholders will make a claim.
(I know, that's not very salesy of me).
But, if you think 1 in 10 is "good odds", then you don't understand risk.
If everyone made a claim it wouldn't be insurance. I can't "insure" against the tires on my car wearing out. Insurance works best for things that aren't likely to happen but would cause a large loss if they were to happen.
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Ben Mathew
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Re: Long-Term Care Decision

Post by Ben Mathew »

adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm Take a single person with no essential requirement (like a disabled dependent) to leave a legacy. Why NOT use your assets for your care? You can't take them with you.
The person without a bequest motive will have to save extra in order to cover potential LTC costs. Unless they plan to use Medicaid, it might come down to whether to save $200K extra to pay for LTCi premiums, or $700K extra to pay directly for LTC. The benefit of LTC insurance, like all forms insurance, is that you can save less and still be covered.

The person with a bequest motive is likely more able to self insure LTC costs because they can dip into the inheritance pot to cover LTC costs. Of course, the cost is that the heirs don't get the inheritance you wanted to leave them.

Put differently, if a person with a bequest motive does not use the $700K extra savings for LTC, at least they get to leave it as a a bequest. For a person without the bequest motive, it would have been a waste to leave the LTC money on the table when they die. LTC insurance (and annuities, I might add) enable people to more completely draw down and enjoy their savings while they are alive.
fposte
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Re: Long-Term Care Decision

Post by fposte »

Ben Mathew wrote: Thu Aug 15, 2019 9:08 am
adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm Take a single person with no essential requirement (like a disabled dependent) to leave a legacy. Why NOT use your assets for your care? You can't take them with you.
The person without a bequest motive will have to save extra in order to cover potential LTC costs. Unless they plan to use Medicaid, it might come down to whether to save $200K extra to pay for LTCi premiums, or $700K extra to pay directly for LTC. The benefit of LTC insurance, like all forms insurance, is that you can save less and still be covered.

The person with a bequest motive is likely more able to self insure LTC costs because they can dip into the inheritance pot to cover LTC costs. Of course, the cost is that the heirs don't get the inheritance you wanted to leave them.

Put differently, if a person with a bequest motive does not use the $700K extra savings for LTC, at least they get to leave it as a a bequest. For a person without the bequest motive, it would have been a waste to leave the LTC money on the table when they die. LTC insurance (and annuities, I might add) enable people to more completely draw down and enjoy their savings while they are alive.
As a person without a bequest motive, this neither reflects my reality nor my thinking. I don't think of savings as "basic" and "extra"--I save for the expenses I may have. If there's money left when I die, that's good news for a few, but it doesn't affect my plans either way. If I'm not at the table anymore, I don't really care if there's money on it or not.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

walkindude wrote: Thu Aug 15, 2019 8:33 am
WoW2012 wrote: Wed Aug 14, 2019 11:27 pm I was not being facetious.
A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.
I wish my parents had that policy instead of the one they bought more than 25 years ago. They are now 88/85 and paying 8k+ and 4k+ for $100,000 each for 3 years ($600,000 possible coverage). They want to quit paying, but I keep telling them they're more likely to need it now than ever before.

How can a company stay in business @$6k/year for $1.5M of coverage? Sort of seems like a recipe for inflating rates as has occurred with my parents. I think they started at $3500 total and are now over $12000. And they have way less coverage than you're talking about.
It sounds like your parents bought a policy where the premium goes up every year. About 5% of policies sold are designed to have the premium increase each year as the benefits increase each year. It's a terrible way to design a policy (for the consumer).
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

cognovimus wrote: Thu Aug 15, 2019 5:33 am
WoW2012 wrote: Wed Aug 14, 2019 11:44 pm
willthrill81 wrote: Tue Aug 13, 2019 5:00 pm
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.

I was replying to cognovimus.
He's 63.
His wife is 61.
$1.5M in shared LTCi benefits.
$6,000/yr combined premium.
It's available in every state except CA, NY, and MT.
(Those states have similar policies, but not exactly the same.)
Insurer(s) names that provide shared care of $1.5 million for $6; coverage per day, # years, elimination period; inflation protection? As I said, the quotes I got (for shared care) were considerably more for less coverage. One of my reservations has been that I already know that I would still be partly paying out of pocket for the care even with the policies I have to pick from. If I'm going to give up $6K per year (which will increase), I'd like to have a reasonable expectation that I won't need to think about it again until the need for care arises for one of us.
$280/day
5 years of benefits for each spouse PLUS an additional 5 years of benefits that either spouse can use.
90 day elimination period, but you can save another 10% if you make it 180 day elimination period.
If you're both super healthy, the premium would be about 20% less.
If you've both got chronic health issues, the premium would be about 20% more.

The key is to dump the inflation protection. The inflation protection is usually over-priced. I don't have inflation protection on my policy. I'm comfortable co-insuring the cost of care that exceeds my policy's daily benefit (which is $240).

It's more important to have more long-term care insurance for the first half of retirement than the last half of retirement.
If you self-fund care you need in your 70's, that would have a greater impact on your wife's well-being than if you self-fund care in your 90's.
Dump the inflation protection and just buy as much daily benefit as you can comfortably afford.
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

TN_Boy wrote: Thu Aug 15, 2019 8:10 am
Here are some excerpts:

"Long-term care insurance. Long-term care insurance pays for only a small portion of care in the U.S. Such policies have historically been expensive, and most have benefit caps that may reduce the usefulness of insurance in the most severe scenarios. However, as the market evolves, new policy types may emerge that individuals should evaluate. For now, traditional long-term care insurance policies remain a relatively small player in the paid long-term care space."
It's true that only 7 million people own long-term care insurance.
It's also true that long-term care insurance currently pays for only 11% of the LTC expenses in the U.S.
What if 70 million people owned long-term care insurance?
WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 »

bsteiner wrote: Thu Aug 15, 2019 9:05 am
Insurance works best for things that aren't likely to happen but would cause a large loss if they were to happen.

Isn't that exactly what we're talking about?
delamer
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Re: Long-Term Care Decision

Post by delamer »

WoW2012 wrote: Thu Aug 15, 2019 9:24 am
walkindude wrote: Thu Aug 15, 2019 8:33 am
WoW2012 wrote: Wed Aug 14, 2019 11:27 pm I was not being facetious.
A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.
I wish my parents had that policy instead of the one they bought more than 25 years ago. They are now 88/85 and paying 8k+ and 4k+ for $100,000 each for 3 years ($600,000 possible coverage). They want to quit paying, but I keep telling them they're more likely to need it now than ever before.

How can a company stay in business @$6k/year for $1.5M of coverage? Sort of seems like a recipe for inflating rates as has occurred with my parents. I think they started at $3500 total and are now over $12000. And they have way less coverage than you're talking about.
It sounds like your parents bought a policy where the premium goes up every year. About 5% of policies sold are designed to have the premium increase each year as the benefits increase each year. It's a terrible way to design a policy (for the consumer).
What about the $6,000 annual premium for the policy that you’ve been mentioning?

Are there any guarantees that the premium won’t increase or that the benefits won’t be reduced, whether those things happen annually or irregularly? Or at least caps on premiums?

That is certainly one of the major fears of policyholders — that the policy will become unaffordable (or end up offering very low coverage) as they age.
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Re: Long-Term Care Decision

Post by walkindude »

WoW2012 wrote: Thu Aug 15, 2019 9:24 am
walkindude wrote: Thu Aug 15, 2019 8:33 am
WoW2012 wrote: Wed Aug 14, 2019 11:27 pm I was not being facetious.
A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.
I wish my parents had that policy instead of the one they bought more than 25 years ago. They are now 88/85 and paying 8k+ and 4k+ for $100,000 each for 3 years ($600,000 possible coverage). They want to quit paying, but I keep telling them they're more likely to need it now than ever before.

How can a company stay in business @$6k/year for $1.5M of coverage? Sort of seems like a recipe for inflating rates as has occurred with my parents. I think they started at $3500 total and are now over $12000. And they have way less coverage than you're talking about.
It sounds like your parents bought a policy where the premium goes up every year. About 5% of policies sold are designed to have the premium increase each year as the benefits increase each year. It's a terrible way to design a policy (for the consumer).
No, they didn't have increases for about the first 10-15 years. Now, it seems they get hit with 15% or more increases 2 out of 3 years.
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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 »

WoW2012 wrote: Wed Aug 14, 2019 11:47 pm
willthrill81 wrote: Tue Aug 13, 2019 4:45 pm
pintail07 wrote: Tue Aug 13, 2019 3:50 pm As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
Contrary to what you, WoW2012, and others might think, I actually believe that on occasion, he has made some good contributions to our discussions of LTC insurance. For instance, he has readily admitted that most retirees don't have enough assets/income to justify LTCi and must rely on Medicaid. He corrected me on a point regarding the use of Medicaid-compliant annuities. There is value in that.

But one problem is that he apparently believes that LTCi of one form or another is essentially the one-size-fits-all solution for everyone with significant assets. That is bona fide false. The literally textbook financial purpose of insurance is to protect against financial catastrophe. So if the worst case scenario with regard to a specific risk is not even close to a financial catastrophe, there is no financial need for the insurance. It's difficult to get just about anyone who works in insurance sales to admit this, partially because they've been trained to believe otherwise.

"It's difficult to get a man to understand something when his salary depends upon him not understanding it."
- Upton Sinclair

Several people have asked WoW2012 at what level of portfolio/net worth someone no longer needs LTCi. I do not believe that he has ever answered that question. When I responded to him regarding an issue he brought up with Medicaid-compliant annuities, I demonstrated that the issue wasn't a real problem for those who would be interested in this tactic. He didn't respond to it. I've asked him several questions regarding various aspects of LTC insurance that he has never responded to, possibly because it would be very difficult to do so without admitting that LTCi is not a one-size-fits-all solution.

Another problem is the 'salesy-ness' of some of WoW2012's comments, like the above "it's only 15 basis points," or "what will your spouse do with only $50k of SS benefits and a million dollars."

I sincerely hope that the moderators will not delete my comment for whatever reason because (1) I'm not attacking WoW2012 and (2) everything I've said can be easily verified by an examination of WoW2012's posts. Again, he occasionally provides valuable contributions to the discussion, but people should be aware, at a minimum, that he has a potential conflict of interest.
Please provide me a list of all the questions you've asked which I've failed to answer.
I'll reply as soon as I can.
Thank you.

To my knowledge, I have asked the general questions listed below of you at some point. However, I have attempted to word them here to be as specific as I can.

1. At what specific level of net worth and/or investment portfolio size can a retiree or retired couple adequately self-insure the risk of LTC or what specific process should they use to determine that specific level?

2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?

2b. If you believe that a LTCi policy with a $1.5 million cap on lifetime benefits would be acceptable for a retired couple, then why would a retired couple who will always have at least that much net worth objectively wish to purchase LTCi?

3. Do you agree that, apart from relatively unusual tax situations, the expected benefit of insurance to the insured is negative, and if not, why not and how could insurance companies offering such policies stay in business?

3. Are Medicaid-compliant annuities currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?

4. Are irrevocable trusts currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
bsteiner
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Re: Long-Term Care Decision

Post by bsteiner »

WoW2012 wrote: Thu Aug 15, 2019 9:24 am ...
It sounds like your parents bought a policy where the premium goes up every year. About 5% of policies sold are designed to have the premium increase each year as the benefits increase each year. It's a terrible way to design a policy (for the consumer).
It's not necessarily a terrible way as long as you understand what you're buying. It lets you drop the policy without forfeiting the "cash value." By analogy, if you buy a term life insurance policy you can drop it, only having paid for the coverage while you had it, and if you buy a whole life policy and you drop it, having paid more than the cost of the coverage while you had it, you get back the cash value.

I appreciate your posting on this topic. It's helpful to read different views on a subject. (For that reason, I read op-ed columns by writers with different perspectives.)
willthrill81 wrote: Thu Aug 15, 2019 10:25 am ...
1. At what specific level of net worth and/or investment portfolio size can a retiree or retired couple adequately self-insure the risk of LTC or what specific process should they use to determine that specific level?

2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?

2b. If you believe that a LTCi policy with a $1.5 million cap on lifetime benefits would be acceptable for a retired couple, then why would a retired couple who will always have at least that much net worth objectively wish to purchase LTCi?

3. The expected value of any insurance policy has to be less than the present value of the premiums. It costs something to run the insurance company. But you may be willing to incur that cost in order to protect against the risk of a large loss.

3. Do you agree that, apart from relatively unusual tax situations, the expected benefit of insurance to the insured is negative, and if not, why not and how could insurance companies offering such policies stay in business?

3. Are Medicaid-compliant annuities currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?

4. Are irrevocable trusts currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
I'll take a shot at some of them. Others may have different views.

1. It depends. If you're willing to use up all your assets and then go on Medicaid, then you only need to have money for 5 years of care. If you're not willing to use up all your assets, there's some level of wealth at which your income (perhaps together with a portion of your assets) will cover the cost of your care, in the same way that it covers your living expenses while you're healthy. In either case, if you're married, you have to consider your spouse's current and possible future needs.

2a. Yes. You might have enough assets to pay for your care (or your care and your spouse's care), but not want to use up all of your money. You might want to leave some money for your children and grandchildren.

2b. Same as 2a. If you have $1.5 million you might not want to use it all up. Someone worth $1.5 million is more likely to buy the insurance than someone worth $1,500 (who can't afford the premiums, and who will easily qualify for Medicaid) or someone worth $15 million (who can afford the cost of the care).

3. Annuities might be a possibility, but they're inflexible, there's a cost to the annuity, and you still have to contribute the annuity payments. Also, at the point you're concerned about the cost of your care, your health may be below average, which would make an annuity less attractive (unless the premium is reduced or the payments are increased to reflect your below average health).

4. Some people of modest means create income-only trusts to protect their assets from Medicaid. This is most attractive to people who have a house and not much else. They put the house in a trust in which they retain the income for life (i.e., the right to live in the house for life. If they're not planning to move, as a practical matter nothing changes. (The trustee can sell the house and buy a different home, so there's some flexibility.) After 5 years, if they go into a nursing home, the house is protected.
Last edited by bsteiner on Thu Aug 15, 2019 11:47 am, edited 1 time in total.
smitcat
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Re: Long-Term Care Decision

Post by smitcat »

willthrill81 wrote: Thu Aug 15, 2019 10:25 am
WoW2012 wrote: Wed Aug 14, 2019 11:47 pm
willthrill81 wrote: Tue Aug 13, 2019 4:45 pm
pintail07 wrote: Tue Aug 13, 2019 3:50 pm As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
Contrary to what you, WoW2012, and others might think, I actually believe that on occasion, he has made some good contributions to our discussions of LTC insurance. For instance, he has readily admitted that most retirees don't have enough assets/income to justify LTCi and must rely on Medicaid. He corrected me on a point regarding the use of Medicaid-compliant annuities. There is value in that.

But one problem is that he apparently believes that LTCi of one form or another is essentially the one-size-fits-all solution for everyone with significant assets. That is bona fide false. The literally textbook financial purpose of insurance is to protect against financial catastrophe. So if the worst case scenario with regard to a specific risk is not even close to a financial catastrophe, there is no financial need for the insurance. It's difficult to get just about anyone who works in insurance sales to admit this, partially because they've been trained to believe otherwise.

"It's difficult to get a man to understand something when his salary depends upon him not understanding it."
- Upton Sinclair

Several people have asked WoW2012 at what level of portfolio/net worth someone no longer needs LTCi. I do not believe that he has ever answered that question. When I responded to him regarding an issue he brought up with Medicaid-compliant annuities, I demonstrated that the issue wasn't a real problem for those who would be interested in this tactic. He didn't respond to it. I've asked him several questions regarding various aspects of LTC insurance that he has never responded to, possibly because it would be very difficult to do so without admitting that LTCi is not a one-size-fits-all solution.

Another problem is the 'salesy-ness' of some of WoW2012's comments, like the above "it's only 15 basis points," or "what will your spouse do with only $50k of SS benefits and a million dollars."

I sincerely hope that the moderators will not delete my comment for whatever reason because (1) I'm not attacking WoW2012 and (2) everything I've said can be easily verified by an examination of WoW2012's posts. Again, he occasionally provides valuable contributions to the discussion, but people should be aware, at a minimum, that he has a potential conflict of interest.
Please provide me a list of all the questions you've asked which I've failed to answer.
I'll reply as soon as I can.
Thank you.

To my knowledge, I have asked the general questions listed below of you at some point. However, I have attempted to word them here to be as specific as I can.

1. At what specific level of net worth and/or investment portfolio size can a retiree or retired couple adequately self-insure the risk of LTC or what specific process should they use to determine that specific level?

2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?

2b. If you believe that a LTCi policy with a $1.5 million cap on lifetime benefits would be acceptable for a retired couple, then why would a retired couple who will always have at least that much net worth objectively wish to purchase LTCi?

3. Do you agree that, apart from relatively unusual tax situations, the expected benefit of insurance to the insured is negative, and if not, why not and how could insurance companies offering such policies stay in business?

3. Are Medicaid-compliant annuities currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?

4. Are irrevocable trusts currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
I will take a shot as these as well....

To my knowledge, I have asked the general questions listed below of you at some point. However, I have attempted to word them here to be as specific as I can.

1. At what specific level of net worth and/or investment portfolio size can a retiree or retired couple adequately self-insure the risk of LTC or what specific process should they use to determine that specific level?
We purchased LTCi insurance long before retirement - it was more important to us earlier and much more economical. IF we did not have LTCi now I would reserve at least $250K towards a potential future need.

2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?
Sure it can - depends upon your goals and the prices you will pay.

2b. If you believe that a LTCi policy with a $1.5 million cap on lifetime benefits would be acceptable for a retired couple, then why would a retired couple who will always have at least that much net worth objectively wish to purchase LTCi?
See above at goals of having LTCI and other insurances long before retirement.

3. Do you agree that, apart from relatively unusual tax situations, the expected benefit of insurance to the insured is negative, and if not, why not and how could insurance companies offering such policies stay in business?
In general all insurance negative if taken over an entire population - car, liability, disability, boat, home, LTCi, Flood, health, etc all fall into the same category when taken as a whole.

3. Are Medicaid-compliant annuities currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
Not for us when we looked - they have other tax implications.

4. Are irrevocable trusts currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
[/quote]
Yes - in part, as well as other maneuverers that LTCI may or may not allow you to utilize.
If you have not been a part of an irrevocable trust with its costs , limitations and ridged potential outcomes I would suggest an experienced lawyer before committing to a solution that included one.
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Ben Mathew
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Re: Long-Term Care Decision

Post by Ben Mathew »

fposte wrote: Thu Aug 15, 2019 9:13 am
Ben Mathew wrote: Thu Aug 15, 2019 9:08 am
adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm Take a single person with no essential requirement (like a disabled dependent) to leave a legacy. Why NOT use your assets for your care? You can't take them with you.
The person without a bequest motive will have to save extra in order to cover potential LTC costs. Unless they plan to use Medicaid, it might come down to whether to save $200K extra to pay for LTCi premiums, or $700K extra to pay directly for LTC. The benefit of LTC insurance, like all forms insurance, is that you can save less and still be covered.

The person with a bequest motive is likely more able to self insure LTC costs because they can dip into the inheritance pot to cover LTC costs. Of course, the cost is that the heirs don't get the inheritance you wanted to leave them.

Put differently, if a person with a bequest motive does not use the $700K extra savings for LTC, at least they get to leave it as a a bequest. For a person without the bequest motive, it would have been a waste to leave the LTC money on the table when they die. LTC insurance (and annuities, I might add) enable people to more completely draw down and enjoy their savings while they are alive.
As a person without a bequest motive, this neither reflects my reality nor my thinking. I don't think of savings as "basic" and "extra"--I save for the expenses I may have. If there's money left when I die, that's good news for a few, but it doesn't affect my plans either way. If I'm not at the table anymore, I don't really care if there's money on it or not.
If somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?
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Re: Long-Term Care Decision

Post by WoW2012 »

delamer wrote: Thu Aug 15, 2019 10:06 am
What about the $6,000 annual premium for the policy that you’ve been mentioning?

Are there any guarantees that the premium won’t increase or that the benefits won’t be reduced, whether those things happen annually or irregularly? Or at least caps on premiums?

That is certainly one of the major fears of policyholders — that the policy will become unaffordable (or end up offering very low coverage) as they age.

If the policy is purchased in one of the 41 states that has enacted the Rate Stability Regulation, then the policy will be governed by the Rate Stability Regulation.

The Rate Stability Regulation punishes long-term care insurers if they request a rate increase by forcing them to lower their profits.
The Rate Stability Regulation rewards long-term care insurers if they keep their premiums stable by allowing them to keep higher profits.
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Re: Long-Term Care Decision

Post by WoW2012 »

Ben Mathew wrote: Thu Aug 15, 2019 11:45 am
If somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?

+1
Excellent point!
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Re: Long-Term Care Decision

Post by ncbill »

WoW2012 wrote: Thu Aug 15, 2019 11:50 am
delamer wrote: Thu Aug 15, 2019 10:06 am
What about the $6,000 annual premium for the policy that you’ve been mentioning?

Are there any guarantees that the premium won’t increase or that the benefits won’t be reduced, whether those things happen annually or irregularly? Or at least caps on premiums?

That is certainly one of the major fears of policyholders — that the policy will become unaffordable (or end up offering very low coverage) as they age.

If the policy is purchased in one of the 41 states that has enacted the Rate Stability Regulation, then the policy will be governed by the Rate Stability Regulation.

The Rate Stability Regulation punishes long-term care insurers if they request a rate increase by forcing them to lower their profits.
The Rate Stability Regulation rewards long-term care insurers if they keep their premiums stable by allowing them to keep higher profits.
Is there historical data on average annual increases since the Rate Stabilization Regulation went into force?

Something that would allow one to ballpark an average annual rate of increase?
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Re: Long-Term Care Decision

Post by WoW2012 »

ncbill wrote: Thu Aug 15, 2019 12:28 pm
WoW2012 wrote: Thu Aug 15, 2019 11:50 am

If the policy is purchased in one of the 41 states that has enacted the Rate Stability Regulation, then the policy will be governed by the Rate Stability Regulation.

The Rate Stability Regulation punishes long-term care insurers if they request a rate increase by forcing them to lower their profits.
The Rate Stability Regulation rewards long-term care insurers if they keep their premiums stable by allowing them to keep higher profits.
Is there historical data on average annual increases since the Rate Stabilization Regulation went into force?

Something that would allow one to ballpark an average annual rate of increase?

Unlike medical insurance, there is no such thing as an "annual rate increase" on long-term care insurance policies.
There is a lot of historical data on rate increases. It's published every year by the California Dept. of Insurance.
I download it and plug it into a database and run reports.

Most policies sold under the Rate Stability Regulation have had no rate increases.
Some policies sold under the Rate Stability Regulation have had rate increases and the median increase has been a one-time 20% increase.
cognovimus
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Re: Long-Term Care Decision

Post by cognovimus »

WoW2012 wrote: Thu Aug 15, 2019 9:36 am
cognovimus wrote: Thu Aug 15, 2019 5:33 am
WoW2012 wrote: Wed Aug 14, 2019 11:44 pm
willthrill81 wrote: Tue Aug 13, 2019 5:00 pm
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.

I was replying to cognovimus.
He's 63.
His wife is 61.
$1.5M in shared LTCi benefits.
$6,000/yr combined premium.
It's available in every state except CA, NY, and MT.
(Those states have similar policies, but not exactly the same.)
Insurer(s) names that provide shared care of $1.5 million for $6; coverage per day, # years, elimination period; inflation protection? As I said, the quotes I got (for shared care) were considerably more for less coverage. One of my reservations has been that I already know that I would still be partly paying out of pocket for the care even with the policies I have to pick from. If I'm going to give up $6K per year (which will increase), I'd like to have a reasonable expectation that I won't need to think about it again until the need for care arises for one of us.
$280/day
5 years of benefits for each spouse PLUS an additional 5 years of benefits that either spouse can use.
90 day elimination period, but you can save another 10% if you make it 180 day elimination period.
If you're both super healthy, the premium would be about 20% less.
If you've both got chronic health issues, the premium would be about 20% more.

The key is to dump the inflation protection. The inflation protection is usually over-priced. I don't have inflation protection on my policy. I'm comfortable co-insuring the cost of care that exceeds my policy's daily benefit (which is $240).

It's more important to have more long-term care insurance for the first half of retirement than the last half of retirement.
If you self-fund care you need in your 70's, that would have a greater impact on your wife's well-being than if you self-fund care in your 90's.
Dump the inflation protection and just buy as much daily benefit as you can comfortably afford.
WOW, I'm still interested in the names of insurers that offer this. The traditional LTC quotes I have received (Transamerica, Mutual of Omaha) didn't offer 5/5 plus another 5 years of coverage and the coverage doesn't equal even today's SN cost in my state. (I know many people don't end up needing that, but it seems pointless to get a policy that doesn't even cover today's costs).

You mentioned that you will be "co-insuring" so it sounds like your policy wouldn't cover all the care either. See, I'm not enthused about paying up front and then still having to pay when I get on claim. To me, part of the value of getting LTC insurance would be the opportunity to get it and forget it.

You mentioned ditching the inflation protection; that would leave me with only $180/day in benefits which is clearly too little. Others I've spoken with said LTC is worthless without inflation protection. Obviously there are many conflicting opinions.

Finally, a lot of the quotes I have are for hybrid policies. Can you tell me the difference between "fake hybrids" and "true hybirds'?


Thank you!
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Re: Long-Term Care Decision

Post by fposte »

Ben Mathew wrote: Thu Aug 15, 2019 11:45 am
fposte wrote: Thu Aug 15, 2019 9:13 am
Ben Mathew wrote: Thu Aug 15, 2019 9:08 am
adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm Take a single person with no essential requirement (like a disabled dependent) to leave a legacy. Why NOT use your assets for your care? You can't take them with you.
The person without a bequest motive will have to save extra in order to cover potential LTC costs. Unless they plan to use Medicaid, it might come down to whether to save $200K extra to pay for LTCi premiums, or $700K extra to pay directly for LTC. The benefit of LTC insurance, like all forms insurance, is that you can save less and still be covered.

The person with a bequest motive is likely more able to self insure LTC costs because they can dip into the inheritance pot to cover LTC costs. Of course, the cost is that the heirs don't get the inheritance you wanted to leave them.

Put differently, if a person with a bequest motive does not use the $700K extra savings for LTC, at least they get to leave it as a a bequest. For a person without the bequest motive, it would have been a waste to leave the LTC money on the table when they die. LTC insurance (and annuities, I might add) enable people to more completely draw down and enjoy their savings while they are alive.
As a person without a bequest motive, this neither reflects my reality nor my thinking. I don't think of savings as "basic" and "extra"--I save for the expenses I may have. If there's money left when I die, that's good news for a few, but it doesn't affect my plans either way. If I'm not at the table anymore, I don't really care if there's money on it or not.
If somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?
You're talking about unplanned events. I'm talking about planned events.
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Re: Long-Term Care Decision

Post by willthrill81 »

bsteiner wrote: Thu Aug 15, 2019 10:48 am
willthrill81 wrote: Thu Aug 15, 2019 10:25 am 1. At what specific level of net worth and/or investment portfolio size can a retiree or retired couple adequately self-insure the risk of LTC or what specific process should they use to determine that specific level?

2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?

2b. If you believe that a LTCi policy with a $1.5 million cap on lifetime benefits would be acceptable for a retired couple, then why would a retired couple who will always have at least that much net worth objectively wish to purchase LTCi?

3. The expected value of any insurance policy has to be less than the present value of the premiums. It costs something to run the insurance company. But you may be willing to incur that cost in order to protect against the risk of a large loss.

3. Do you agree that, apart from relatively unusual tax situations, the expected benefit of insurance to the insured is negative, and if not, why not and how could insurance companies offering such policies stay in business?

3. Are Medicaid-compliant annuities currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?

4. Are irrevocable trusts currently a potentially plausible alternative option to LTCi for certain retirees, and if not, why not?
I'll take a shot at some of them. Others may have different views.

1. It depends. If you're willing to use up all your assets and then go on Medicaid, then you only need to have money for 5 years of care. If you're not willing to use up all your assets, there's some level of wealth at which your income (perhaps together with a portion of your assets) will cover the cost of your care, in the same way that it covers your living expenses while you're healthy. In either case, if you're married, you have to consider your spouse's current and possible future needs.
So you're suggesting that 5 years of LTC expenses would be enough? Is that per retiree (i.e. 10x for a couple)? Do you believe that amount would need to be 'set aside' as a separate 'bucket'?

I'm interested to know what the "some level of wealth" you're referring to is. I personally believe $2 million or more to have a very high likelihood of being adequate for all both those for whom LTC expenses would significantly exceed $100k annually and could go into greater detail as to how I come up with that number. The data I've seen suggest that many LTC events result in expenditures of significantly less than $100k annually (e.g. $40k-$70k seems common).
bsteiner wrote: Thu Aug 15, 2019 10:48 am2a. Yes. You might have enough assets to pay for your care (or your care and your spouse's care), but not want to use up all of your money. You might want to leave some money for your children and grandchildren.

Same as 2a. If you have $1.5 million you might not want to use it all up. Someone worth $1.5 million is more likely to buy the insurance than someone worth $1,500 (who can't afford the premiums, and who will easily qualify for Medicaid) or someone worth $15 million (who can afford the cost of the care).
On average, buying LTCi would leave them with less. But if a retiree wanted to be reasonably sure that they left at least some of their assets to their children, I agree that LTCi might make sense.
bsteiner wrote: Thu Aug 15, 2019 10:48 am3. Annuities might be a possibility, but they're inflexible, there's a cost to the annuity, and you still have to contribute the annuity payments. Also, at the point you're concerned about the cost of your care, your health may be below average, which would make an annuity less attractive (unless the premium is reduced or the payments are increased to reflect your below average health).
Many LTCi policies are not flexible either, and there's certainly a cost to them as well. The big difference with Medicaid-compliant annuities is that they aren't purchased unless/until the LTC risk actually manifests itself. This cannot be done with LTCi. And if a LTC event begins but the afflicted person's life expectancy is very limited, then buying neither an annuity nor having ever bought LTCi could easily be optimal.
bsteiner wrote: Thu Aug 15, 2019 10:48 am4. Some people of modest means create income-only trusts to protect their assets from Medicaid. This is most attractive to people who have a house and not much else. They put the house in a trust in which they retain the income for life (i.e., the right to live in the house for life. If they're not planning to move, as a practical matter nothing changes. (The trustee can sell the house and buy a different home, so there's some flexibility.) After 5 years, if they go into a nursing home, the house is protected.
That's my understanding of the benefit as well. Also, any funds outside of tax-advantaged accounts can be placed into an irrevocable trust, and the retiree can still draw income, though not principal, from those funds for the remainder of their life. But the funds must have been in the trust for longer than five years before they are not counted by Medicaid.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by ChrisC »

willthrill81 wrote: Thu Aug 15, 2019 10:25 am 2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?
As I've said, at least twice in this thread, it might make financial sense (aside from emotional or logistical reasons) for some (like me, a retired couple) to purchase LTCi, when they can self-insure, as ths decision is fact specific and driven by the particular contours of the LTCi policy one might have procured. Moreover, the idea that one can (or should) divorce these decisions from emotional senses of security or risk adversity is simply baffling for me -- why ignore this aspect of the decision making process unless complete irrationality has infected the decision?

In my case, I've had my policy for 16 years, and it appears to work well for me, with premium payments that have increased twice, and with reasonable assurances that my policy sponsored by Federal Government for employees and retirees will deliver policy benefits if I make claim under the policy. If LTCi policy premiums increase at an exponential level, such that the leverage of risk makes little financial sense, I'll drop the LTCi insurance and self-insure, much like the fact that I've dropped term insurance when the level of premiums have increased exponentially after a guaranteed period of level term policy premiums.
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Re: Long-Term Care Decision

Post by willthrill81 »

smitcat wrote: Thu Aug 15, 2019 11:00 am We purchased LTCi insurance long before retirement - it was more important to us earlier and much more economical. IF we did not have LTCi now I would reserve at least $250K towards a potential future need.
That makes sense. One or two posters in recent LTC threads have noted that policies they bought years ago were very attractive, much more so than current policies
smitcat wrote: Thu Aug 15, 2019 11:00 amSure it can - depends upon your goals and the prices you will pay.
That's not really an explanation.
smitcat wrote: Thu Aug 15, 2019 11:00 amIn general all insurance negative if taken over an entire population - car, liability, disability, boat, home, LTCi, Flood, health, etc all fall into the same category when taken as a whole.
I agree.
smitcat wrote: Thu Aug 15, 2019 11:00 amNot for us when we looked - they have other tax implications.
What other tax implications are you referring to?
smitcat wrote: Thu Aug 15, 2019 11:00 amYes - in part, as well as other maneuverers that LTCI may or may not allow you to utilize.
If you have not been a part of an irrevocable trust with its costs , limitations and ridged potential outcomes I would suggest an experienced lawyer before committing to a solution that included one.
I agree and would strongly suggest that someone seriously interested in either a Medicaid-compliant annuity or an irrevocable trust should consult an experienced elder care attorney.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by willthrill81 »

ChrisC wrote: Thu Aug 15, 2019 1:23 pm
willthrill81 wrote: Thu Aug 15, 2019 10:25 am 2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?
As I've said, at least twice in this thread, it might make financial sense (aside from emotional or logistical reasons) for some (like me, a retired couple) to purchase LTCi, when they can self-insure, as ths decision is fact specific and driven by the particular contours of the LTCi policy one might have procured.
I agree. What I'm trying to do is boil this down to what specific facts and "particular contours of the LTCi policy" would make self-insurance possible.
ChrisC wrote: Thu Aug 15, 2019 1:23 pmMoreover, the idea that one can (or should) divorce these decisions from emotional senses of security or risk adversity is simply baffling for me -- why ignore this aspect of the decision making process unless complete irrationality has infected the decision?
Because there isn't much to discuss when it comes to subjective decisions. If I like chocolate and you like vanilla, then our preferences simply are what they are. If a person firmly believes that they need LTCi and will not sleep well at night without a policy, then there's nothing left to discuss, and buying LTCi is probably the best course of action, all things considered, for them.

However, to the extent that we allow ourselves to inject emotions into a primarily financial decision, which most would agree that insurance is, we are opening a veritable Pandora's box to all sorts of problems that could really do us long-term harm.

Further, good salespeople have long known that appeals to customers' emotions can have a far greater impact on their behavior than objective reality.
ChrisC wrote: Thu Aug 15, 2019 1:23 pmIn my case, I've had my policy for 16 years, and it appears to work well for me, with premium payments that have increased twice, and with reasonable assurances that my policy sponsored by Federal Government for employees and retirees will deliver policy benefits if I make claim under the policy. If LTCi policy premiums increase at an exponential level, such that the leverage of risk makes little financial sense, I'll drop the LTCi insurance and self-insure, much like the fact that I've dropped term insurance when the level of premiums have increased exponentially after a guaranteed period of level term policy premiums.
A policy bought 16 years ago is extremely unlikely to be equivalent in a meaningful way to a policy purchased today. I'm glad that you seem to have gotten a good one that you're content with.

I really like your analogy of life insurance. Most people are far better off buying term insurance when they're younger and building enough assets to no longer need life insurance at all when they are older. We are planning on taking a similar route with LTCi. We don't believe that the risk of our needing LTC prior to our targeted retirement age of 55 (for me) warrants buying LTCi, and we should be capable of self-insuring the risk of LTC beyond that point.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by willthrill81 »

fposte wrote: Thu Aug 15, 2019 12:40 pm
Ben Mathew wrote: Thu Aug 15, 2019 11:45 amIf somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?
You're talking about unplanned events. I'm talking about planned events.
:thumbsup

If we had a working crystal ball, the decision as to whether to buy insurance of any kind would be far easier. But we don't and never will.

Much of this issue can be simplified with a fairly straightforward question: to what extent are you willing to rely on Medicaid as a backup plan to funding your LTC? Those who are willing will have a lesser need to find alternative means of funding LTC than those who are not. And the facilities available in your area may impact this as well. In some areas, facilities that will accept Medicaid right from the start may not provide care that you find acceptable and/or might not be available when you need LTC. In other areas, this is not the case.
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Ben Mathew
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Re: Long-Term Care Decision

Post by Ben Mathew »

ChrisC wrote: Thu Aug 15, 2019 1:23 pm
willthrill81 wrote: Thu Aug 15, 2019 10:25 am 2a. Could it objectively (i.e. not emotionally) make financial sense for a retiree or retired couple to purchase LTCi when they can self-insure and, if so, why?
As I've said, at least twice in this thread, it might make financial sense (aside from emotional or logistical reasons) for some (like me, a retired couple) to purchase LTCi, when they can self-insure, as ths decision is fact specific and driven by the particular contours of the LTCi policy one might have procured. Moreover, the idea that one can (or should) divorce these decisions from emotional senses of security or risk adversity is simply baffling for me -- why ignore this aspect of the decision making process unless complete irrationality has infected the decision?
It can make sense in certain situations for people who are wealthy enough to self-insure to purchase insurance. It comes down to risk tolerance and the amount by which the premium exceeds actuarially fair amount. If a wealthy person is sufficiently risk averse, and the premium is not too much above actuarially fair, it would not be irrational for that person to purchase insurance. It's simply a matter of preference.

However there is one subset of wealthy people who clearly shouldn't buy LTC: As TomatoTomahto said in one of the LTC threads (maybe it's this one, but I haven't checked), if you plan to live large in retirement, LTC expenses might actually be cheaper than your regular discretionary expenses. People with that that level of consumption in retirement should not purchase LTC insurance. It will probably take a good bit of travel, vacation homes, luxury cars, etc. to get discretionary retirement consumption to exceed LTC expenses (say $100K to $150K per year per person, or $200K to $300K per couple). People in that boat will save money once they require LTC. Unless maybe if they plan to get concierge LTC care--round the clock shift of nurses at home and so on. But LTC insurance doesn't cover that sort of care anyway.
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Re: Long-Term Care Decision

Post by Ben Mathew »

Another point to consider is that for most people, the ability to self-insure will be highly dependent on their portfolio returns. I have very little idea how much wealth I will have at age 80. If my portfolio does well over the next 38 years, I will be in great shape and can handle LTC costs easily. If returns are poor, I might not be able to pay for it. The range of possible outcomes is enormous. Unless of course you are mostly invested in bonds, which has its own little problem of low expected returns. Purchasing LTC insurance removes that uncertainty. It's true that premiums could rise, but I believe that the probability of that happening for newly purchased policies is lower than what it was in the past. And even if you assume a doubling of nominal premiums fifteen years into the policy, you might be surprised to find, when you do the math, that LTC insurance is still an attractive proposition.

In sum, LTC insurance removes two sources of uncertainty:

(a) whether you will need LTC, and
(b) whether the money you set aside for self-insuring LTC costs will earn the necessary return
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Re: Long-Term Care Decision

Post by TomatoTomahto »

Ben Mathew wrote:However there is one subset of wealthy people who clearly shouldn't buy LTC: As TomatoTomahto said in one of the LTC threads (maybe it's this one, but I haven't checked), if you plan to live large in retirement, LTC expenses might actually be cheaper than your regular discretionary expenses. People with that that level of consumption in retirement should not purchase LTC insurance. It will probably take a good bit of travel, vacation homes, luxury cars, etc. to get discretionary retirement consumption to exceed LTC expenses (say $100K to $150K per year per person, or $200K to $300K per couple). People in that boat will save money once they require LTC.
Oh no! I did say that once, when I was frustrated by the FUD in an LTCi thread that was asserting that “self-insurance” funds should be segregated from other funds. I’m sorry, it was obnoxious, but also indicative of my thinking that I can’t be simultaneously using funds set aside for fancy cars/travel/haute cuisine and LTC.

It’s not strictly on topic, but I do want to say that regardless of my impetuous post, our intention is not actually to live that large, we just want to have the choice. We are still BHs, after all.
Okay, I get it; I won't be political or controversial. The Earth is flat.
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Re: Long-Term Care Decision

Post by adamthesmythe »

WoW2012 wrote: Thu Aug 15, 2019 9:04 am
adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm
But I would like to follow up a bit on the comment that desirability of a policy depends on circumstances, in addition to assets. WoW's comments often focus on "preservation of assets" as a justification.

Long-term care insurance is not about protecting assets. It's about protecting income.
You don't pay bills with assets. You pay bills with income.

Mr. and Mrs. Smith have $1.5M in assets. Mr. Smith needs long-term care and it costs $500K (which is not unreasonable). Mr. Smith dies. Many people on this board think that Mrs. Smith will be fine because she still has $1.0M in assets.

After Mr. Smith dies, Mrs. Smith loses one of their social security checks.
She may even lose all or a lot of Mr. Smith's pension.
She has also lost (FOREVER) the income the $500K could have generated for her for the rest of her life.

Mr. Smith thought he'd decided to self-insure.
What he really decided to do was to force his wife to live on about half of their income after he dies.
1. Half is the worst case, since it is very unlikely that anyone will stay in LTC long enough to use up half the assets.

2. If you have 1.5M in assets, SS is a fraction of the total income. The other part is reduced less in your scenario.

3. It is entirely reasonable for one partner to contemplate having to "manage" half the income and assets, in what is, after all, very much a worst case.

4. You assume Mr. earned more than Mrs. A bit sexist.
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Re: Long-Term Care Decision

Post by Ben Mathew »

TomatoTomahto wrote: Thu Aug 15, 2019 3:35 pm
Ben Mathew wrote:However there is one subset of wealthy people who clearly shouldn't buy LTC: As TomatoTomahto said in one of the LTC threads (maybe it's this one, but I haven't checked), if you plan to live large in retirement, LTC expenses might actually be cheaper than your regular discretionary expenses. People with that that level of consumption in retirement should not purchase LTC insurance. It will probably take a good bit of travel, vacation homes, luxury cars, etc. to get discretionary retirement consumption to exceed LTC expenses (say $100K to $150K per year per person, or $200K to $300K per couple). People in that boat will save money once they require LTC.
Oh no! I did say that once, when I was frustrated by the FUD in an LTCi thread that was asserting that “self-insurance” funds should be segregated from other funds. I’m sorry, it was obnoxious, but also indicative of my thinking that I can’t be simultaneously using funds set aside for fancy cars/travel/haute cuisine and LTC.

It’s not strictly on topic, but I do want to say that regardless of my impetuous post, our intention is not actually to live that large, we just want to have the choice. We are still BHs, after all.
Sure, I didn't interpret that as a statement about your personal plan for retirement. I took it more as a general point that if discretionary retirement spending is sufficiently high, the need for LTC insurance is eliminated. Or, more weakly, the higher the planned discretionary retirement spending, the lesser the need for LTC insurance.
Last edited by Ben Mathew on Thu Aug 15, 2019 4:10 pm, edited 1 time in total.
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Re: Long-Term Care Decision

Post by willthrill81 »

adamthesmythe wrote: Thu Aug 15, 2019 3:47 pm
WoW2012 wrote: Thu Aug 15, 2019 9:04 am
adamthesmythe wrote: Tue Aug 13, 2019 9:39 pm
But I would like to follow up a bit on the comment that desirability of a policy depends on circumstances, in addition to assets. WoW's comments often focus on "preservation of assets" as a justification.

Long-term care insurance is not about protecting assets. It's about protecting income.
You don't pay bills with assets. You pay bills with income.

Mr. and Mrs. Smith have $1.5M in assets. Mr. Smith needs long-term care and it costs $500K (which is not unreasonable). Mr. Smith dies. Many people on this board think that Mrs. Smith will be fine because she still has $1.0M in assets.

After Mr. Smith dies, Mrs. Smith loses one of their social security checks.
She may even lose all or a lot of Mr. Smith's pension.
She has also lost (FOREVER) the income the $500K could have generated for her for the rest of her life.

Mr. Smith thought he'd decided to self-insure.
What he really decided to do was to force his wife to live on about half of their income after he dies.
1. Half is the worst case, since it is very unlikely that anyone will stay in LTC long enough to use up half the assets.

2. If you have 1.5M in assets, SS is a fraction of the total income. The other part is reduced less in your scenario.

3. It is entirely reasonable for one partner to contemplate having to "manage" half the income and assets, in what is, after all, very much a worst case.
:thumbsup

It's entirely plausible that the surviving spouse would have adequate income and assets with the remaining survivor's SS benefit and $750k. Assuming that the spouses were of similar ages, SPIA payouts could be quite attractive by that age and supplement the SS benefit to provide an income floor and leaving enough remainder for adequate discretionary spending.
adamthesmythe wrote: Thu Aug 15, 2019 3:47 pm4. You assume Mr. earned more than Mrs. A bit sexist.
Not really, since the data indicate that males do tend to earn more over their lifetime than females.
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Re: Long-Term Care Decision

Post by smitcat »

willthrill81 wrote: Thu Aug 15, 2019 2:05 pm
smitcat wrote: Thu Aug 15, 2019 11:00 am We purchased LTCi insurance long before retirement - it was more important to us earlier and much more economical. IF we did not have LTCi now I would reserve at least $250K towards a potential future need.
That makes sense. One or two posters in recent LTC threads have noted that policies they bought years ago were very attractive, much more so than current policies
smitcat wrote: Thu Aug 15, 2019 11:00 amSure it can - depends upon your goals and the prices you will pay.
That's not really an explanation.
smitcat wrote: Thu Aug 15, 2019 11:00 amIn general all insurance negative if taken over an entire population - car, liability, disability, boat, home, LTCi, Flood, health, etc all fall into the same category when taken as a whole.
I agree.
smitcat wrote: Thu Aug 15, 2019 11:00 amNot for us when we looked - they have other tax implications.
What other tax implications are you referring to?
smitcat wrote: Thu Aug 15, 2019 11:00 amYes - in part, as well as other maneuverers that LTCI may or may not allow you to utilize.
If you have not been a part of an irrevocable trust with its costs , limitations and ridged potential outcomes I would suggest an experienced lawyer before committing to a solution that included one.
I agree and would strongly suggest that someone seriously interested in either a Medicaid-compliant annuity or an irrevocable trust should consult an experienced elder care attorney.
"Sure it can - depends upon your goals and the prices you will pay.[/quote]
That's not really an explanation."
You have posted a number of times that IF you could get some of the LTCi policies that some folks hold now you would buy them - so it really is a pricing issue with the resultant value and the specific holder.
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Re: Long-Term Care Decision

Post by willthrill81 »

smitcat wrote: Thu Aug 15, 2019 4:12 pm
willthrill81 wrote: Thu Aug 15, 2019 2:05 pm That's not really an explanation.
You have posted a number of times that IF you could get some of the LTCi policies that some folks hold now you would buy them - so it really is a pricing issue with the resultant value and the specific holder.
Yes, but pricing, terms, and uncertainties (including with the LTC policies themselves) are what this whole issue is all about, isn't it? I fail to see how the attractiveness of policies that are no longer available today at anywhere close to their original premiums is relevant to today's decision making.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by smitcat »

willthrill81 wrote: Thu Aug 15, 2019 2:28 pm
fposte wrote: Thu Aug 15, 2019 12:40 pm
Ben Mathew wrote: Thu Aug 15, 2019 11:45 amIf somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?
You're talking about unplanned events. I'm talking about planned events.
:thumbsup

If we had a working crystal ball, the decision as to whether to buy insurance of any kind would be far easier. But we don't and never will.

Much of this issue can be simplified with a fairly straightforward question: to what extent are you willing to rely on Medicaid as a backup plan to funding your LTC? Those who are willing will have a lesser need to find alternative means of funding LTC than those who are not. And the facilities available in your area may impact this as well. In some areas, facilities that will accept Medicaid right from the start may not provide care that you find acceptable and/or might not be available when you need LTC. In other areas, this is not the case.
"Much of this issue can be simplified with a fairly straightforward question: to what extent are you willing to rely on Medicaid as a backup plan to funding your LTC?"
Or how many of you have seen what a Medicaid bed and facility really means in your area?
Once we witnessed this up close and personal the answer was quite clearly - No, I do not put family in these beds/facilities.

"In some areas, facilities that will accept Medicaid right from the start may not provide care that you find acceptable and/or might not be available when you need LTC. In other areas, this is not the case"
IMHO - there is no way that the 'quality' of existing Medicaid beds/facilities will remain the same.
I have no doubt which way the quality and access are headed - perhaps others think there are some solutions on the horizon which will save this systems increasingly overused and underfunded future.

Planning for LTC utilizing the best cases now would not be my first or second plan - we see the patterns these services have tracked in other countries that have more historical time in these systems.
Again in my opinion - the ability to private pay will become increasingly important with the future of these systems
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Re: Long-Term Care Decision

Post by smitcat »

willthrill81 wrote: Thu Aug 15, 2019 4:18 pm
smitcat wrote: Thu Aug 15, 2019 4:12 pm
willthrill81 wrote: Thu Aug 15, 2019 2:05 pm That's not really an explanation.
You have posted a number of times that IF you could get some of the LTCi policies that some folks hold now you would buy them - so it really is a pricing issue with the resultant value and the specific holder.
Yes, but pricing, terms, and uncertainties (including with the LTC policies themselves) are what this whole issue is all about, isn't it? I fail to see how the attractiveness of policies that are no longer available today at anywhere close to their original premiums is relevant to today's decision making.
Buying early and low and perhaps being able to write this off within a business is still relevant if the pricing rises - is it not?
Our policies were 'expensive' when we bought them - but we don't feel that way now. That and the out of pocket costs are about 65% what we pay so its not really a problem.
I remember how expensive I thought that life and additional disability insurance was years back.
I never collected on the life policy or the disability - I do not at all feel like I 'lost out' at all - my wife and daughter were protected the way I wanted them to be.
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Re: Long-Term Care Decision

Post by willthrill81 »

smitcat wrote: Thu Aug 15, 2019 4:27 pm
willthrill81 wrote: Thu Aug 15, 2019 4:18 pm
smitcat wrote: Thu Aug 15, 2019 4:12 pm
willthrill81 wrote: Thu Aug 15, 2019 2:05 pm That's not really an explanation.
You have posted a number of times that IF you could get some of the LTCi policies that some folks hold now you would buy them - so it really is a pricing issue with the resultant value and the specific holder.
Yes, but pricing, terms, and uncertainties (including with the LTC policies themselves) are what this whole issue is all about, isn't it? I fail to see how the attractiveness of policies that are no longer available today at anywhere close to their original premiums is relevant to today's decision making.
Buying early and low and perhaps being able to write this off within a business is still relevant if the pricing rises - is it not?
Our policies were 'expensive' when we bought them - but we don't feel that way now. That and the out of pocket costs are about 65% what we pay so its not really a problem.
I remember how expensive I thought that life and additional disability insurance was years back.
I never collected on the life policy or the disability - I do not at all feel like I 'lost out' at all - my wife and daughter were protected the way I wanted them to be.
I've said several times, although perhaps not in this thread, that if you're able to take a tax deduction for LTCi premiums, this can make it significantly more attractive. Apart from a business or HSA, however, I don't believe that premiums are generally fully deductible.

Michael Kitces created a nice a chart a couple of years ago to illustrate this issue.

Image
https://www.kitces.com/blog/individual- ... insurance/

I don't understand how "buying early" is an inherent advantage apart from potentially behaviorally in that it helps you to not inflate your spending too much. If LTCi premiums are actuarially fair with regard to age, there shouldn't be an inherent benefit to the insured by buying early. Given that the data strongly suggest that the likelihood of filing a LTC claim before age 70, much less age 60, is tiny, I would personally have zero interest in buying an actuarially fair policy at age 55, for instance, just to 'lock in' a low premium that may still go up; the opportunity costs involved don't seem worth it to me.

In nearly 19 years of marriage, my DW and I have only filed one relatively small insurance claim, yet I don't begrudge paying premiums at all because it did (and still does) serve its purpose well: it protects us from the risk of severe financial hardship.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by willthrill81 »

smitcat wrote: Thu Aug 15, 2019 4:21 pm
willthrill81 wrote: Thu Aug 15, 2019 2:28 pm
fposte wrote: Thu Aug 15, 2019 12:40 pm
Ben Mathew wrote: Thu Aug 15, 2019 11:45 amIf somebody gave you an extra $1 million for your retirement, would you spend more in retirement or would it have no effect at all? Conversely, if somebody stole $1 million from your retirement funds, would you spend less in retirement or would it have no effect at all?
You're talking about unplanned events. I'm talking about planned events.
:thumbsup

If we had a working crystal ball, the decision as to whether to buy insurance of any kind would be far easier. But we don't and never will.

Much of this issue can be simplified with a fairly straightforward question: to what extent are you willing to rely on Medicaid as a backup plan to funding your LTC? Those who are willing will have a lesser need to find alternative means of funding LTC than those who are not. And the facilities available in your area may impact this as well. In some areas, facilities that will accept Medicaid right from the start may not provide care that you find acceptable and/or might not be available when you need LTC. In other areas, this is not the case.
"Much of this issue can be simplified with a fairly straightforward question: to what extent are you willing to rely on Medicaid as a backup plan to funding your LTC?"
Or how many of you have seen what a Medicaid bed and facility really means in your area?
Once we witnessed this up close and personal the answer was quite clearly - No, I do not put family in these beds/facilities.

"In some areas, facilities that will accept Medicaid right from the start may not provide care that you find acceptable and/or might not be available when you need LTC. In other areas, this is not the case"
IMHO - there is no way that the 'quality' of existing Medicaid beds/facilities will remain the same.
I have no doubt which way the quality and access are headed - perhaps others think there are some solutions on the horizon which will save this systems increasingly overused and underfunded future.

Planning for LTC utilizing the best cases now would not be my first or second plan - we see the patterns these services have tracked in other countries that have more historical time in these systems.
Again in my opinion - the ability to private pay will become increasingly important with the future of these systems
As I said, it's area specific. There are at least a couple of LTC facilities in our area whose quality is rated similarly to private-pay facilities that will accept Medicaid right from the start. And some facilities will accept private pay initially and transition patients to Medicaid after a period of time.

But regardless of the plan one makes to deal with LTC, its imperative that people do their due diligence when forming said plan and on an ongoing basis. If someone doesn't want to rely on Medicaid in any way, that will certainly impact their planning, and it may make LTCi more attractive than otherwise.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Long-Term Care Decision

Post by ChrisC »

Ben Mathew wrote: Thu Aug 15, 2019 2:34 pm However there is one subset of wealthy people who clearly shouldn't buy LTC: As TomatoTomahto said in one of the LTC threads (maybe it's this one, but I haven't checked), if you plan to live large in retirement, LTC expenses might actually be cheaper than your regular discretionary expenses. People with that that level of consumption in retirement should not purchase LTC insurance. It will probably take a good bit of travel, vacation homes, luxury cars, etc. to get discretionary retirement consumption to exceed LTC expenses (say $100K to $150K per year per person, or $200K to $300K per couple). People in that boat will save money once they require LTC. Unless maybe if they plan to get concierge LTC care--round the clock shift of nurses at home and so on. But LTC insurance doesn't cover that sort of care anyway.
Well, the thrust of your point might apply to anyone who can cash flow all their discretionary expenses in retirement from non-retirement investment accounts (without perhaps even touching a retirement investment portfolio such as those with significant pensions and other income streams) if LTC expenses might be cheaper than ordinary retirement living. If LTC expenses would be lower than retirement expenses, you don't need LTCi. But if you have to touch your investment portfolio for discretionary expenses in retirement (which is the case for virtually all without pensions or who can't live solely on Social Security), you will have to touch that portfolio for LTC, even if LTC expenses might be lower, which strikes me generally as an unlikely occurrence, in any event.

A couple with one in LTC will have LTC expenses for one spouse, some discretionary expenses for the other spouse, in addition to the other non-discretionary expenses of housing costs, taxes (perhaps at a lower rate with large medical expense deductions), and other forms of insurance, including medical insurance such as Medicare Part B, D and supplemental plans. And if both are in LTC at the same time or one after another, this could be a financial trainwreck except for the very wealthy.

The cost of LTC in a HCOL can be daunting. I think someone who posted about LTC in this thread mentioned they were in a HCOL. The cost of LTC in a skilled nursing facilty is around $15K per month in NYC. In Charlotte NC, it's around $9K a month, a MCOL area. So, in my opinion, if you're touching your investment/retirement portfolio for retirement living or later for LTC, the question is whether you're better off transferring some of the risk for LTC expenses to an insurance company, especially if you are also wanting to preserve that porfolio for heirs. For people, who believe they can self-fund, don't want to preserve something "more" for their heirs or don't think they need LTCi for orderly financial transitional help with navigating into LTC, I don't believe you should get LTCi -- just pay as you go if LTC occurs, let the chips fall where they may fall, and rely on Medicaid as your ultimate backstop.

Here's a tool that Federal Long Term Care Insurance has for people who wish to assess whether they have sufficient resources to self-fund an assume the entire risk of LTC. https://www.ltcfeds.com/ltcWeb/do/asses ... n=QPBrTUa9. It might help with the issue for some here about whether they have resources to self insure.
Last edited by ChrisC on Thu Aug 15, 2019 5:46 pm, edited 2 times in total.
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Re: Long-Term Care Decision

Post by MidFlorida1214 »

My wife and I both have LTC insurance. We’ve had them for close to 20 years, having signed up through work. When I look at LongTermCare.gov, I see they estimate that 70% of those over 65 will need some form of LTC. Perhaps much of that can be at home and But even at home, any hired help can be expensive. They estimate that 65 % will need some sort of home based LTC for 2 years. Finally, they are estimating that 20 % may need LTC for 5 years and 37% could be in a facility for a year or more.

If one happens to be one of the unlucky 20% who needs 5 years of care, they could be in a world of hurt without a good size portfolio. Self insurance sounds good and the odds most likely are with you, but one with a modest portfolio could be giving a spouse and/or other dependents a severe haircut in income and lifestyle if they have benne using their portfolio for needed income.
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Re: Long-Term Care Decision

Post by WoW2012 »

walkindude wrote: Thu Aug 15, 2019 10:08 am
No, they didn't have increases for about the first 10-15 years. Now, it seems they get hit with 15% or more increases 2 out of 3 years.
In which state did your parents reside when they purchased the policy?
From which insurance company did they purchase the policy?
Did they buy their policy before 2001 or after?
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