Long Term Care Insurance

[Rod Hagen]

Do you guys pay into Long Term Care insurance?  What's the experience been like if you do? And if you don't, but you considered it, why did you decide not to?  And if you pay into it, and you've used it, what was that experience like?  Thanks!

[jeezifonly]

I think that the advent of life-extending medications and procedures has rendered the long-term care insurance model unprofitable. Looked into it years ago, and If you can get it at all, you’ll pay a fortune. 

[+ Vegas_Millennial]

I looked into LTC coverage in my early 30s.  I did the math and it made sense to use the money to maximize my Roth IRA contributions instead.  They both would yield similar financial returns should I actually qualify for a LTC disbursement, but there's a 50/50 chance that I would not need LTC.  At least with a Roth IRA I'd still have the money to use on other things or leave to my estate, should I not need the care.

The only way the math wouldn't favor retirement contributions is if I needed the care when I was young and the  Roth IRA didn't have time to grow before it was needed.  However, I discovered my employer already provided me with robust short term disability, long term disability, and medical early retirement pension provisions.  Therefore, I'm not buying LTC insurance.

[Luv2play]

My brother and his wife bought long term care insurance in their 40's as he was self employed and she didn't work. They paid about $3000 per year in premiums.

Now he is 79 and she is 84 and has dementia. She went into a facility last summer that costs $9000 per month and the insurance pays half.

Whether it was worth it depends on how long she lives. Otherwise she is very healthy and could live another 5 years or more. She gets excellent care. Even has an exercise bike set up in her room. He gets to take her out to a restaurant or even home for a meal on her good days. Other days she's in a complete fog and doesn't recognize him.

In my case I have a great pension and that would cover me if I had to go into ltc. So I never bothered to buy a policy.

[+ Vegas_Millennial]

37 minutes ago, Luv2play said:

Whether it was worth it depends on how long she lives. Otherwise she is very healthy and could live another 5 years or more.

Very true.  But those terms are nearly impossible to find these days.  When I was shopping for LTC coverage about 8 years ago, all policies had a limit of 3 years of lifetime benefits.  That limitation swayed me to not purchase LTC.

[jeezifonly]

In America, long term skilled nursing works for two classes: the Uber-rich and the indigent.
Government does not pay for it unless you’re in the latter. You have to have nothing, zero, zilch, no house, no property, no retirement no savings. Don’t worry - you don’t have to actually take responsibility for unloading things when it all gets to that point. They’ll just take it once you’ve paid the last bill you can.

Good thing we can be spared the worst sort of life and rely on the autonomy of choice with assisted suicide.  
Wait. What?

[robberbaron4u]

Make certain that any long term health care insurance plan you consider has an inflation adjustment clause;  $3000 today might not buy a bed pan in ten years.

[Rudynate]

I applied for it about 7 years ago and they turned me down.  I have a clotting problem that I take a blood thinner for and the agent said that would not be a cause for being rejected.  I forgot to mention that I have asthma and that turned out to be a deal-killer.  My husband has HIV and that, of course, would disqualify him.

[+ Charlie]

We did it for one year several years ago, then decided it wasn't worth the money. It is getting very hard to find, because the insurance companies were losing money on those who ended up using it, so premiums became too expensive for new buyers who didn't want to spend that much on insurance they might never need; therefore, many companies dropped the longterm care option. One elderly friend  was not happy with the service they gave when her husband was dying, and decided to drop the policy for herself.

[Rudynate]

3 hours ago, Charlie said:

We did it for one year several years ago, then decided it wasn't worth the money. It is getting very hard to find, because the insurance companies were losing money on those who ended up using it, so premiums became too expensive for new buyers who didn't want to spend that much on insurance they might never need; therefore, many companies dropped the longterm care option. One elderly friend  was not happy with the service they gave when her husband was dying, and decided to drop the policy for herself.

That's good news.  After I was rejected, I stopped paying attention to it.  I'm glad to know that so many other smart consumers are opting out of it.  I remember my monthly premium was going to be something like $350.00.

[Guest]

It's good to have if you don't want to risk dying penniless. I got mine through CalPERS, which is only available to government employees. The rates have more than doubled in the last 2 years, and would have quadrupled had I not agreed to limit the total payout to 1.2 million (previously I would be covered for a lifetime). If you have no one you care about that you want to leave an inheritance for, then I guess it doesn't matter. If you don't have the insurance, you may have to sell everything you own in order to pay for your long-term care, because you won't qualify for Medicaid unless you have less than about $1000 to your name. But if you don't have either a person or an organization you wish to be remembered by, then it doesn't matter. 

[handiacefailure]

Wish I could get it but since I'm a type 1 diabetic I'm uninsurable even though I take care of myself and have no other health problems.

I've never been lucky enough to have it offered at a job which is the only way I'd get it.

I am single and even though I have no one I really care about other than my sister to leave my estate to, it would still be nice to know if I need it the government wouldn't be taking every thing I worked for my whole life (I'm 56 and have a free and clear condo and decent savings and investments) and would be put in a decent facility if need be.

[Rod Hagen]

Interesting, thank you.  I have a family member in Long Term care, and it got me thinking.  Thanks for all the input.

[+ WilliamM]

On 4/29/2022 at 12:08 PM, Charlie said:

We did it for one year several years ago, then decided it wasn't worth the money. It is getting very hard to find, because the insurance companies were losing money on those who ended up using it, so premiums became too expensive for new buyers who didn't want to spend that much on insurance they might never need; therefore, many companies dropped the longterm care option. One elderly friend  was not happy with the service they gave when her husband was dying, and decided to drop the policy for herself.

A bit confused, could you be specific about "one elderly friend was not happy with the  service they gave when her husband was dying..."

[+ Charlie]

50 minutes ago, WilliamM said:

A bit confused, could you be specific about "one elderly friend was not happy with the  service they gave when her husband was dying..."

No, I cannot give you details about her problems with the insurance company.

[+ WilliamM]

1 hour ago, Charlie said:

No, I cannot give you details about her problems with the insurance company.

A mysterious  post then.

[+ WilliamM]

To @Charlie

It may not have been the insurance company, rather changes in regulations.

I have a casual acquaintance with whom I have not had sex who explained a recent change. That is,  if you leave the assisted living facility, you must have someone with you at all times, even if  you just go to the store

[+ Charlie]

I believe her problem was with reimbursement by the insurance company for in-home aides (they were not in an assisted living facility). It was ten years ago, and she did not go into details with me.

[robberbaron4u]

One "problem" is that you are often required to use a "preferred provider" with the insurance company. My mother suffered a debilitating stroke in 2016; she was rendered, as by the Victorians, a "helpless invalid". Fortunately, we had the financial wherewithal to keep her at home for the remaining six years of her life.  Although I was  "on duty" 24/7, the staffing cost, two shifts of home health aides, and, in addition, physical, speech and occupational therapist, and  a registered nurse, was staggering. The home health services covered by Medicare and her BCBS Plan F Medicare Advantage plan were rudimentary.

[+ augustus]

On 4/29/2022 at 9:28 PM, handiacefailure said:

I am single and even though I have no one I really care about other than my sister to leave my estate to, it would still be nice to know if I need it the government wouldn't be taking every thing I worked for my whole life (I'm 56 and have a free and clear condo and decent savings and investments) and would be put in a decent facility if need be.

If the situation arises where you need LTC in a facility, calculate the 5 year cost from your assets and give the rest immediately to your sister.  The 5 year look back period will be satisfied, but you will need at least 500k to put in reserve for the LTC care. 

Edited June 2, 2022 by augustus

[coriolis888]

On 4/28/2022 at 5:17 PM, jeezifonly said:

snip 

Good thing we can be spared the worst sort of life and rely on the autonomy of choice with assisted suicide.  
Wait. What?

https://www.cnn.com/2014/11/26/us/physician-assisted-suicide-fast-facts/index.html#:~:text=Physician-assisted suicide is legal,and California via court decision.

[Kevin Slater]

Moderator’s note: let’s keep on topic, which is long-term care insurance. 

[Guest]

I’m a fan.  My parents bought LTCI in their 50’s.  Premium about $2,000/yr.  At one point, their private pay care costs were $9,000/mo and the insurance took the edge off the expense by paying about half. If you can get it, I’m a fan. 

[+ sniper]

On 6/17/2022 at 10:03 PM, BnaC said:

I’m a fan.  My parents bought LTCI in their 50’s.  Premium about $2,000/yr.  At one point, their private pay care costs were $9,000/mo and the insurance took the edge off the expense by paying about half. If you can get it, I’m a fan. 

Those premiums are far lower than what I was quoted in my 30s 15+ years ago. Your parents lucked out by getting it and using it before the market adjusted. A lot of companies went under and did not pay oit.

[+ bigjoey]

I lucked out and bought a policy that was so unprofitable for the insurance industry, policies with those terms are not longer being sold😇.  I bought the policy in my 40’s and it was paid for in full after 10 years with no more payments. (I am now 76)

The policy only paid for long term care after I was 65.  The actuarial calculation included the insurance company holding the money for at least 20 years with no payouts and for anyone who died, never paying out.  The policy paid $300/day which covered costs thirty years ago; while it has a COLA factor, long term skilled nursing can run more.  It does cover home aid instead of institutional care.  It has no lifetime limit.  It has a 60 day wait period before coverage starts once long term care is required (the actuarial calculation was that if you entered skilled nursing, you would not last long).

The policy predates the wide availability of “assisted living.”  Back when I bought the policy there was only independent living and skilled nursing.  As a volunteer, I was involved in Kansas City’s first assisted living facility about 25 years ago and it was a revolutionary concept and we did not know how people would accept it and if it would be fiscally viable.  The actuarial calculation did not include such living arrangements.

In addition to all of the above, people are living longer (pre-Covid) and the insurance industry made the terms much less favorable on new policies.