Anecdotal issue with receiving LTCi benefits
- TomatoTomahto
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Anecdotal issue with receiving LTCi benefits
This is different from the back and forth about the wisdom of Long Term Care insurance we've already had on the forum. I found this Haggler article in the NYT interesting, as it discusses the difficulty one family has had in receiving benefits. After being contacted by the Haggler, the insurance company agreed to re-open the case.
http://www.nytimes.com/2013/03/24/your- ... paper&_r=0
http://www.nytimes.com/2013/03/24/your- ... paper&_r=0
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
I'm sure the family was happy to get the $24,000+ for the care as they had no other plan. My LTCi has a third party concierge service through Univita Living that will take care of things like this. It even provides for a "circle of friends" named by me that will be my advocate if I'm unable. i'm sure these insurers will encounter many attempts at fraud and unfortunately claims will be scrutinized same as any other insurance claim.
It's slowly dawned on me that we won the real estate lottery!
- TomatoTomahto
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Re: Anecdotal issue with receiving LTCi benefits
I'm confused. $24,000+???Honobob wrote:I'm sure the family was happy to get the $24,000+ for the care as they had no other plan.
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
$4,000 a month for care times 5-6 months. If it's a legimitate claim the insurer will have to back pay to the eligible date.TomatoTomahto wrote:I'm confused. $24,000+???Honobob wrote:I'm sure the family was happy to get the $24,000+ for the care as they had no other plan.
It's slowly dawned on me that we won the real estate lottery!
- TomatoTomahto
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Re: Anecdotal issue with receiving LTCi benefits
As the Haggler notes, the company has reopened the case. It does not mean that any money has been paid, nor that it necessarily will. Even the Haggler, who has the public spotlight of the NYT to shine on the matter, was surprised not to be blown off by an insurance company.Honobob wrote:$4,000 a month for care times 5-6 months. If it's a legimitate claim the insurer will have to back pay to the eligible date.TomatoTomahto wrote:I'm confused. $24,000+???Honobob wrote:I'm sure the family was happy to get the $24,000+ for the care as they had no other plan.
I get the FI part but not the RE part of FIRE.
- nisiprius
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Re: Anecdotal issue with receiving LTCi benefits
I believe "do they pay" is a very legitimate and important question about LTCi.
Before I read the article, I am going to ask the question: is this a company I consider "reputable?" Then I will go and read the article. Companies I consider "reputable" include John Hancock, Genworth, Metlife, and TIAA-CREF--I don't know which if any are still writing LTCi insurance. "Reputable" means they may be sleazy with regard to raising rates but they behave as expected with regard to claims. The only "disreputable" company I know by name is Conseco.
Now I am going to read the article.
OK, it's CNA, I didn't have any pre-existing impressions one way or another about CNA.
With regard to the issue as described, I simply can't tell what I think. The big mystery to me is how "Dr. Visekruna" came to be involved, and whether Mr. Kotz was aware of the contents of her report. It seems reasonable to me that if the insurer had paperwork from a medical professional that translated into "not covered," the key thing needed to resolve the situation was to make sure the insurer got paperwork from a medical professional that translated into "covered."
If Dr. Visekruna was an "independent" doctor sent by the insurer--independent like the "independent" optometrist whose office is conveniently colocated on the premises of the national eyeglass chain--well, then, one wonders.
The other big unanswered question is, in the course of that five months, could Mr. Kotz have arranged for an evaluation by another "independent" doctor and would that have done anything... or was the intervention of the press really required.
The take-home might be... at the point where an LTCi claim is being considered, it might be a good idea to pay for a doctor of your own choice to make an evaluation... or then again maybe it wouldn't help.
Before I read the article, I am going to ask the question: is this a company I consider "reputable?" Then I will go and read the article. Companies I consider "reputable" include John Hancock, Genworth, Metlife, and TIAA-CREF--I don't know which if any are still writing LTCi insurance. "Reputable" means they may be sleazy with regard to raising rates but they behave as expected with regard to claims. The only "disreputable" company I know by name is Conseco.
Now I am going to read the article.
OK, it's CNA, I didn't have any pre-existing impressions one way or another about CNA.
With regard to the issue as described, I simply can't tell what I think. The big mystery to me is how "Dr. Visekruna" came to be involved, and whether Mr. Kotz was aware of the contents of her report. It seems reasonable to me that if the insurer had paperwork from a medical professional that translated into "not covered," the key thing needed to resolve the situation was to make sure the insurer got paperwork from a medical professional that translated into "covered."
If Dr. Visekruna was an "independent" doctor sent by the insurer--independent like the "independent" optometrist whose office is conveniently colocated on the premises of the national eyeglass chain--well, then, one wonders.
The other big unanswered question is, in the course of that five months, could Mr. Kotz have arranged for an evaluation by another "independent" doctor and would that have done anything... or was the intervention of the press really required.
The take-home might be... at the point where an LTCi claim is being considered, it might be a good idea to pay for a doctor of your own choice to make an evaluation... or then again maybe it wouldn't help.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Anecdotal issue with receiving LTCi benefits
CNA was probably the worst-run insurance company ever, so this is not surprising. There are a lot of articles like this about getting CNA LTCi claims paid. From the article it sounds like this is not a tax-qualified policy where benefits are triggered when two of the six ADL's cannot be performed, or where dementia is an automatic trigger.
Re: Anecdotal issue with receiving LTCi benefits
My mother was insured through Genworth- supposedly one of the better insurers. An obvious issue is that the insurer needs to cover their costs- their lovely buildings, many minions, independent agents, phone calls, and so on. They can't afford to pay out anything near what folks pay in- so, like any insurance scam, they're set up not to do so. First, they only start paying when you can't take care of yourself. Someone else has to be your advocate. If you're paying that person to do so, you've already lost the battle. Second, anything they don't understand immediately, they don't pay. After explaining about 10 times they might start paying, but then you have to convince them to pay retroactively. That can take years. Third, they have a list of what they do and don't cover, which must make sense to them. Bottom line, my mother could have invested the same money in a fund she could access as needed, without proving anything to anybody. She then could have taken out everything she put in, instead of needing to cover various expenses herself. My take-away lesson- yes, set aside money for long term care expenses, but skip the insurance business. You're much better off being self-insured. Now if I can only get Genworth to cough up the last $6000 they owe us. My mother's been gone over a year, and I guess it's time to make phone call #25 about this claim. Maybe the claims analyst's boss's boss will help?
Re: Anecdotal issue with receiving LTCi benefits
Yeah, but how would you accomplish a plan that would pay out over $200,000 each and every year say 20 years from now, or needing $70,000 a year today?OldWetHen wrote: You're much better off being self-insured.
It's slowly dawned on me that we won the real estate lottery!
- TomatoTomahto
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Re: Anecdotal issue with receiving LTCi benefits
I'm no genius, but I managed such a plan, which mainly consists of saving a lotHonobob wrote:Yeah, but how would you accomplish a plan that would pay out over $200,000 each and every year say 20 years from now, or needing $70,000 a year today?OldWetHen wrote: You're much better off being self-insured.
That said, it is because we fall outside the "sweet spot" for LTCi, which Consumer Reports says might work for people not poor (because they can't afford the premiums) nor rich (because they can self-insure). I can't say that I'm rich, but we have enough to substitute for LTCi payments.
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
Would you share your plan? What assumptions are you making? From what age did you have "coverage? It looks like one would need $5,600,000 per person in their portfolio 20 years from now to have a 4% withdrawal rate to cover basic LTC coverage of $225,000 a year.TomatoTomahto wrote:I'm no genius, but I managed such a plan, which mainly consists of saving a lotHonobob wrote:Yeah, but how would you accomplish a plan that would pay out over $200,000 each and every year say 20 years from now, or needing $70,000 a year today?OldWetHen wrote: You're much better off being self-insured.
That said, it is because we fall outside the "sweet spot" for LTCi, which Consumer Reports says might work for people not poor (because they can't afford the premiums) nor rich (because they can self-insure). I can't say that I'm rich, but we have enough to substitute for LTCi payments.
It's slowly dawned on me that we won the real estate lottery!
Re: Anecdotal issue with receiving LTCi benefits
Yes, this article and similar stories are what always stops me from going out and buying LTC insurance. I'd love to buy LTC insurance but am leery of having to work with the LTC insurance to pay valid claims. I've set aside a LTC fund and will be taking my chances.
So this brings me to today, where I am the advocate for a relative who has two LTC policies. One, in the Penn Treaty group, is in rehabilitation, while the other policy was taken over by CNA.
A lot has happened since this relative purchased these policies. Although the relative dodged a big one this month with a successful surgery and rehabilitation, I hope there will be no need to use either policy.
So this brings me to today, where I am the advocate for a relative who has two LTC policies. One, in the Penn Treaty group, is in rehabilitation, while the other policy was taken over by CNA.
A lot has happened since this relative purchased these policies. Although the relative dodged a big one this month with a successful surgery and rehabilitation, I hope there will be no need to use either policy.
Re: Anecdotal issue with receiving LTCi benefits
So roughly, you'd need $1,300,000 TODAY at 60 and count on 8% compounded growth for the next 20 years and if you die at 79............? Meanwhile, I'll have spent maybe $70,000 (and spent my earnings on my $1,300,000 of $104,000 each and every year!) for LTCi and have 30 years of coverage.donall wrote: I've set aside a LTC fund and will be taking my chances.
It's slowly dawned on me that we won the real estate lottery!
- TomatoTomahto
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Re: Anecdotal issue with receiving LTCi benefits
As I said, the plan consists mostly of saving a lot. No particular assumptions, other than that Financial Engines and ESPlanner are reasonably accurate when fed conservative inputs. I guess we've been "covered" from around age 35 or so (first through disability insurance and then with our portfolio).Honobob wrote:Would you share your plan? What assumptions are you making? From what age did you have "coverage? It looks like one would need $5,600,000 per person in their portfolio 20 years from now to have a 4% withdrawal rate to cover basic LTC coverage of $225,000 a year.TomatoTomahto wrote:I'm no genius, but I managed such a plan, which mainly consists of saving a lot [snip...]Honobob wrote:Yeah, but how would you accomplish a plan that would pay out over $200,000 each and every year say 20 years from now, or needing $70,000 a year today?OldWetHen wrote: You're much better off being self-insured.
The policies I've seen don't pay out $225k per year, unless you're talking inflated dollars. Most seem to pay a couple-few hundred per day.
Anyway, we're getting off topic (I.e. rehashing prior threads). I started this thread to point out an additional risk: whether or not a claim will be deemed legitimate and how apparently the decision is in the hands of the insurance company. How does your third-party advocate work? I'm not familiar with it; perhaps that's something to consider.
Last edited by TomatoTomahto on Sun Mar 24, 2013 4:54 pm, edited 1 time in total.
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
I've worked for enough insurance companies over the years to realize that the best way to keep money from flying out the door is to close the door for as long as possible.
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- TomatoTomahto
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Re: Anecdotal issue with receiving LTCi benefits
Why would you have an LTC fund? I don't have one, any more than I have a groceries fund, or an automobile fund. My retirement income can be given to a care provider, or can be spent on groceries or cars. The wonderful thing about money is that it's fungible.donall wrote: I've set aside a LTC fund and will be taking my chances.
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
One last comment- my mother signed up over 20 years ago, and her final benefits were a max of $165K total, maximum $150 per day. I don't know where you're getting your expectation of millions in payment, and newer policies are only going to get less favorable. And, of course, the insurance companies get to decide what and if they want to pay.
Re: Anecdotal issue with receiving LTCi benefits
Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollarsHonobob wrote:So roughly, you'd need $1,300,000 TODAY at 60 and count on 8% compounded growth for the next 20 years and if you die at 79............? Meanwhile, I'll have spent maybe $70,000 (and spent my earnings on my $1,300,000 of $104,000 each and every year!) for LTCi and have 30 years of coverage.donall wrote: I've set aside a LTC fund and will be taking my chances.
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
Re: Anecdotal issue with receiving LTCi benefits
I agree, money is fungible. If I need LTC, then $$ will not be spent on groceries or a car. If you are setting aside money for LTC, then your calculation can be offset by pensions, SS, etc. See my previous post where if LTC fund is not used, then I predict happy relatives.TomatoTomahto wrote:Why would you have an LTC fund? I don't have one, any more than I have a groceries fund, or an automobile fund. My retirement income can be given to a care provider, or can be spent on groceries or cars. The wonderful thing about money is that it's fungible.donall wrote: I've set aside a LTC fund and will be taking my chances.
On the other hand, I think it is wise to have a capital outlay fund, where money is set aside for future cars, future major repairs, etc. This can be done the same way home associations have monthly assessments for future repairs.
- nisiprius
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Re: Anecdotal issue with receiving LTCi benefits
Where did you get "2.5 years" from? You're not making the mistake of thinking you don't need insurance if you can pay for the "average" event, are you? My circle of two-degrees-of-separation acquaintances includes several late people who had nursing-home stays with lengths in the vicinity of eight years. As well as half-a-dozen for whom it was less than six months. An insurance company gets to play the averages; an individual doesn't.donall wrote:Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollars
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
Last edited by nisiprius on Sun Mar 24, 2013 5:28 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: Anecdotal issue with receiving LTCi benefits
Donall, we're on the same page, separated only by semantics
Good for you to be an advocate for a relative. It is, however, sad that it's necessary, and even worse, for some (because of their particular circumstances),it's not even an option.
If you don't mind sharing, what resources are available for getting reimbursed and how much friction is there?
Good for you to be an advocate for a relative. It is, however, sad that it's necessary, and even worse, for some (because of their particular circumstances),it's not even an option.
If you don't mind sharing, what resources are available for getting reimbursed and how much friction is there?
I get the FI part but not the RE part of FIRE.
Re: Anecdotal issue with receiving LTCi benefits
Nisiprius, yes I am basing my calculation on the average, because if I bought LTC insurance that is what I would buy. I would not buy eight years worth of LTC insurance.nisiprius wrote:Where did you get "2.5 years" from? You're not making the mistake of thinking you don't need insurance if you can pay for the "average" event, are you? My circle of two-degrees-of-separation acquaintances includes several late people who had nursing-home stays with lengths in the vicinity of eight years. As well as half-a-dozen for whom it was less than six months. An insurance company gets to play the averages; an individual doesn't.donall wrote:Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollars
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
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Re: Anecdotal issue with receiving LTCi benefits
nisiprius wrote:Where did you get "2.5 years" from? You're not making the mistake of thinking you don't need insurance if you can pay for the "average" event, are you? My circle of two-degrees-of-separation acquaintances includes several late people who had nursing-home stays with lengths in the vicinity of eight years. As well as half-a-dozen for whom it was less than six months. An insurance company gets to play the averages; an individual doesn't.donall wrote:Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollars
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
Most LTC insurance programs have 2-3 year benefit periods and specific benefit amounts. $150 a day for 3 years is about 160,000. that is all the insurance you are buying.
You are correct that a disaster will exhaust all savings, but insuring or not will not will not change that fact. It is rational to save and invest the equivalent of the payout from LTCI
Re: Anecdotal issue with receiving LTCi benefits
TomatoTomahto, so far I have not gotten to the point of working with the relative's LTC insurance. I've read the contracts, filled out forms, and paid the premiums. I know I have a bad attitude about LTC insurance, but now learning that the second LTC insurance company is going to be a chore, I am discouraged. The worst part is that there is no way this relative could ever, ever get the LTC insurance to work. Why do we have long contracts that control the lives of our seniors?TomatoTomahto wrote:Donall, we're on the same page, separated only by semantics
Good for you to be an advocate for a relative. It is, however, sad that it's necessary, and even worse, for some (because of their particular circumstances),it's not even an option.
If you don't mind sharing, what resources are available for getting reimbursed and how much friction is there?
Re: Anecdotal issue with receiving LTCi benefits
What do you think LTC will cost in 20 years? My 5% inflation policy will pay $226,000 a year but my understanding is that LTC is actually increasing about 7% per year. Your $200,000 invested today will cover you for about 22 months!donall wrote:Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollarsHonobob wrote:So roughly, you'd need $1,300,000 TODAY at 60 and count on 8% compounded growth for the next 20 years and if you die at 79............? Meanwhile, I'll have spent maybe $70,000 (and spent my earnings on my $1,300,000 of $104,000 each and every year!) for LTCi and have 30 years of coverage.donall wrote: I've set aside a LTC fund and will be taking my chances.
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
It's slowly dawned on me that we won the real estate lottery!
Re: Anecdotal issue with receiving LTCi benefits
Honobob, not sure what $200K invested will cover in two yearsHonobob wrote:What do you think LTC will cost in 20 years? My 5% inflation policy will pay $226,000 a year but my understanding is that LTC is actually increasing about 7% per year. Your $200,000 invested today will cover you for about 22 months!donall wrote:Honobob, not sure why I need 1.3 million today to fund possible LTC. $80K X 2.5 years = $200K in today's dollarsHonobob wrote:So roughly, you'd need $1,300,000 TODAY at 60 and count on 8% compounded growth for the next 20 years and if you die at 79............? Meanwhile, I'll have spent maybe $70,000 (and spent my earnings on my $1,300,000 of $104,000 each and every year!) for LTCi and have 30 years of coverage.donall wrote: I've set aside a LTC fund and will be taking my chances.
Invest $200K and keep separate for future LTC or if not used, have some happy relatives.
Nisiprius, I know what you are saying with your graph. I remember reading what Steven Jay Gould wrote about cancer statistics
http://csn.cancer.org/node/213889
No matter how small a chance according to statistics, you may still be the unlucky one and then statistics really don't matter.
Re: Anecdotal issue with receiving LTCi benefits
This chart is useful but does not tell the whole story. Many people will spend some time in an assisted living facility before entering a nursing home. While cheaper than nursing homes, assisted living facilities are quite expensive and durations are lengthier. For example my grandfather was in assisted living for 2.5 years followed by 0.5 years in a nursing home. If he didn't have my grandmother to care for him he would have spent several additional years in the assisted living facility or in the home of a child with a paid caregiver.nisiprius wrote:
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Re: Anecdotal issue with receiving LTCi benefits
Who is selling a policy with unlimited coverage like that? As was mentioned in some previous posts the policies that can now be purchased all have limits of one kind or another. Then on top of that, they apparently won't pay anything without a fight. No thanks, not a product I am willing to buy.Honobob wrote:Yeah, but how would you accomplish a plan that would pay out over $200,000 each and every year say 20 years from now, or needing $70,000 a year today?OldWetHen wrote: You're much better off being self-insured.
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Re: Anecdotal issue with receiving LTCi benefits
Genworth, through AARP.Who is selling a policy with unlimited coverage like that?
Re: Anecdotal issue with receiving LTCi benefits
But only through AARP
Re: Anecdotal issue with receiving LTCi benefits
Any insurance with a subjective trigger is difficult to administer. Experts can disagree as to whether someone is disabled, suffering from PTSD, unable to work, needing LTC, etc. What strikes me with all these anecdotal accounts is the total lack of empathy by either side for the other. It's almost as if "combat" is assumed as normal.
I would be happy to purchase a product which did not involve this hassle. Other than the obvious (which is to self-insure), any suggestions?
I would be happy to purchase a product which did not involve this hassle. Other than the obvious (which is to self-insure), any suggestions?
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Re: Anecdotal issue with receiving LTCi benefits
One must remember that problem claims will always get the headlines, the overwhelming amount of claims are hassle free. The clients I see that have issues with claims is always due to the claimant not submitting the correct information.
Re: Anecdotal issue with receiving LTCi benefits
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