What's the scoop here? I've been reading a bit online and it's inconclusive. Some recommend, others don't. And seems like it depends on the details of the coverage.

My employer is offering this year. I don't know whether to sign up or not. And not sure how to decide and what to look for in coverage.

Anybody have good / personal insights here?
1. How to decide whether or not to get LTC insurance?
2. What to look for in LTC insurance?
3. How to assess whether the LTC insurance is worth the premiums?

Like all insurance, they are probably betting the coverage will never be necessary. Which means I shouldn't really need it. Unless I do. Like car insurance - I could buy a new car w/ all the premiums I've paid. Only used coverage once in all these years (but was worth paying all the premiums to that date). Or health insurance if you're healthy - may never need it unless you have an accident (1:100,000?).

I've a feeling that I'll never need LTC insurance. But if I do, it'll be worth it. No idea how to decide.

I don't have time to answer all your questions right now, but, LTC expenses can be HUGE.

Think about trying to pay $8k-$10k/mo cash to stay at a nursing home, note this varies a lot based upon your location, and how quickly that could eat up your assets.

And if you don't have any assets, then you will have to search long and hard for a Medicaid facility and hope they have an opening and at least some concern about quality of care.

Both my parents were in a nursing home and there was nothing left when they died. I know they would have been extremely upset knowing that is what happened as they did not want to "save-save-save" for their whole lives without leaving my sister and I something.

I won't do the same to our child.

I've had a LTC plan for about 15 years with full coverage and spend about $800/year. Getting it through your employer will be the least expensive to you option plus they might even provide some measure of guarantee issued coverage.

Hard to get straight answers on this. One search states 70 percent of Americans will need it, another 50 percent. No doubt estimates were from the sellers of thes policies. Scare tactics often used to get people to buy.

We looked into it but at our age it's too expensive now . My sister had to put her husband into a Nursing home due to his dementia . They had no insurance so she had to find a facility that would accept Medicaid , had an opening , and could deal with his condition . She still pays about $1200 a month and it's not the greatest facility .

I have a policy from Bankers' Life that covers me for 3 years.

flashguy

Dave Ramsey highly recommends it.

The problem with LTC insurance at work is that it ends when you leave the job. I wouldn't think that working people have a big risk for needing LTC.

Seems this would be better purchased outside of work.

quote:

Originally posted by LBTRS:
The problem with LTC insurance at work is that it ends when you leave the job. I wouldn't think that working people have a big risk for needing LTC.

Seems this would be better purchased outside of work.

Interesting ..

It sounds like this coverage could carry after leaving the company.

One thing is net asset amount. Let's say someone has $10M in low risk, liquid assets. Perhaps cash in CD's or something. I'd assume that this person doesn't have a need for long term insurance. Just setting aside $1M of that would provide years of care. With that in mind, it seems that LTC insurance provides care up to some set amount of money. If one could set that amount aside and not depend on it for daily living in any manner, would that mean one doesn't need LTC insurance? Is this one way to look at it? It may be financially beneficial to do so, but one wouldn't need it, right?

Still trying to understand criteria to buy or not buy.....

quote:

Originally posted by h2oys:
Think about trying to pay $8k-$10k/mo cash to stay at a nursing home, note this varies a lot based upon your location, and how quickly that could eat up your assets.

This is concerning. But seems like LTC won't help much either then. It seems like typical LTC coverage is about $100-$200/day for up to a few years? I don't know, I'm still trying to understand what LTC coverage is.

quote:

Originally posted by konata88:
It sounds like this coverage could carry after leaving the company.

One thing is net asset amount.

Still trying to understand criteria to buy or not buy.....

You narrowed it down to the key criteria but you’re looking at it the wrong way.

You buy a million dollar umbrella insurance coverage. You gladly pay the premiums because of the risk that someone will sue you for a million dollars. One would think you have net assets worth at least a million dollars. If all you have is $50,000 then it’s not worth paying the premiums protecting $50,000. On the flip side, insurance companies offer coverage on terms that they ensure they make money; that’s how insurance companies work. One related issue is that companies will still offer property insurance in FL after Hurricane Ian but at terms that will ensure they have a profit given the risks of paying out for hurricane property damage.

When you focus on long term care, you know the companies offer coverage at terms that will ensure a profit to them given the risks of paying out for long term care. You can imagine how much higher the odds are of a person needing long term care vs a person experiencing hurricane property damage and they would charge a premium commensurate to that risk. The only way a person who has been paying for LTC insurance to not need LTC is if they die before needing LTC. But in that case, the company loses the premium income stream.

Looking back into what’s at risk, the criteria for paying for LTC insurance is if you’re protecting assets in multiples of what you’re paying in premiums should you need long term care. You would pay the premiums because it’s a minuscule amount compared to how much you’re trying to protect. In other words, you would pay the LTC premiums if you would make money by not having to shell out as much should you happen to need LTC.

If you only have $50,000 in net assets and you end up needing LTC, then use up that amount after which Medicaid kicks in and pays for your care. If you’re married and have a house, the government will let your spouse live in the house and live on a certain amount of income and still pay for your LTC. After you die, then the government can go after the value of your house for the money they spent on you. If you had the foresight to put all your assets in an irrevocable trust five years before you need Medicaid, then your assets will be safe from the government.

In a nutshell, paying for any insurance premium is answered by answering the question “What’s the worst thing that can happen if I don’t have this insurance?” The answer depends on the value you’re trying to protect. For most people, the premium costs are too high relative to what they’re trying to protect especially considering they have the safety net of Medicaid. Someone with $10 million would find buying LTC insurance to be a viable option because he can gain by not having to spend a lot should he need LTC.

Good inputs Rey. I need to think about it some more. And this is another example of how desperately I need to become more deeply familiar with benefits available after retirement, like medicaid.

My impression was that one in need of something like LTC, in the absence of personal assets, would be SOL. But sounds like medicaid will cover someone in need of LTC in the absence of sufficient personal assets.

I think this all comes down to making sure my wife is comfortable to her end of days, whether I'm around or not. I'm don't think I would be happy living if I were not self sufficient (ie - can't dress myself, go to toilet by myself, bathe myself, and other ADLs). But I want my wife to have whatever options she wants available to her.

I need to think some more. And would definitely welcome any further inputs.

But sounds like I should:
1. Obtain LTC insurance for both of us at least until retirement and covered by medicaid.
2. Continue to assess asset volatility, amount, risk, sufficiency and weigh against LTC insurance benefits and premiums. Also what LTC insurance benefits apply, if any, if I live outside the US. For example, what if I retire in Australia? Could I remain there? Or would I have to return to the US to draw LTC benefits?
3. Figure out a way to become more knowledgeable about medicaid and other retirement benefits so I can make better decisions.

Rey pretty much nailed it. If you have a sufficient enough nest egg you want to preserve the premiums are worth it. You could end up spending 6-12k a month on care. When I sold the stuff 20 years ago $200 daily was a common coverage, not sure what is now.

The only thing I'll add, there are other considerations. Spending down til medicaid eligible may be ok for a single person. Not as easy for a married couple, and would you want your significant other to live in poverty so you qualify? Someone with moderate nest egg may choose to get coverage so they don't burden their spouse and so that they can choose their facility vs Medicaid facility that may not be close to family or run to the same standards as non-Medicaid ones.

quote:

And this is another example of how desperately I need to become more deeply familiar with benefits available after retirement, like medicaid.

^^^^^^^^^^^^^^^^
Eligibility for Medicaid means you have very liimited assets, think Welfare recepient.

quote:

Originally posted by ZSMICHAEL:

quote:

And this is another example of how desperately I need to become more deeply familiar with benefits available after retirement, like medicaid.

^^^^^^^^^^^^^^^^
Eligibility for Medicaid means you have very liimited assets, think Welfare recepient.

My brother in law qualifies for Medicaid and my sister is not a welfare recipient .

I think it is important to have a plan. One of the challenges with LTC facilities is finding one that is both affordable and acceptable. I've seen some that, quite frankly, I would rather be dead than live in.
Another challenge is a family member who wants to provide that care. I've seen first hand the sacrifice that entails. Do I really want to do that to them? Our plan is to have paid care in our home when the time comes. Through savings I believe we have the resources to cover that.
I think the earlier one starts to plan their approach to end of life the more good options they have.

quote:

My brother in law qualifies for Medicaid and my sister is not a welfare recipient .

^^^^^^^^^^^^^^^^
Income levels vary by state. LA. expanded Medicaid. I used the term Welfare recipient not as a pejorative, but rather another way to say Federal Poverty level which most people do not understand.

quote:

Originally posted by ZSMICHAEL:

Income levels vary by state. LA. expanded Medicaid. I used the term Welfare recipient not as a pejorative, but rather another way to say Federal Poverty level which most people do not understand.

If you have a passing interest in minimizing taxes and maximizing tax refunds, you would want to understand government tables such as the Federal Poverty Levels. That's how I paid zero or close to zero for my healthcare coverage for close to five years waiting to transition to Medicare. I fucked up the first four years not fully understanding it. I thought the line between Medicaid and maximum Obamacare subsidy was 150% of the Federal Poverty Level. So I shoot for 150% + $1 in terms of recognizing income. Well, that $1 brings you to the second best Obamacare subsidy. This last year, I am shooting for just a hair under 150% and have been paying $0 for a top line healthcare with only a $500 deductible and no co pays.

quote:

Originally posted by konata88:


But sounds like I should:
1. Obtain LTC insurance for both of us at least until retirement and covered by medicaid.

I'm not ragging on you or showing off how much I know this shit, I'm honestly looking out for your benefit to help a fellow forum member.

You saying, you'll obtain LTC insurance until retirement and covered by medicaid is like saying you'll obtain life insurance until you're sure you'll most likely get cancer. When you're old and retired is when you'll most likely need Long Term Care. It's not that I care either way whether you get LTC insurance, I care that you're thinking about the different factors in the right way.

Here are the different scenarios that may come up and you can pick the scenarios that apply.

1) While you're working, you have a higher probability of becoming disabled rather than needing long term care. States cover disability for up to 60 days I think, at least, in California. That's how pregnant women got paid for taking time off before and after giving birth. This may be outdated as there are some parental leave benefits now. If you're risk adverse to this possibility, you can buy disability insurance but this is about as expensive if not more expensive than LTC insurance because, as a side note, the LTC insurance companies are banking that you will quit paying your premiums at some point which means you lose coverage and they won't have to pay benefits on the premiums you have paid. This is sort of the scenario you were describing.

2) If you die and your wife is caring for a child under age 16, she gets 75% of what would be your social security benefits - a good reason to download your social security benefits once a year.

3) If you die and your wife is age 50 through 59 with a disability, she gets 71.5%.

4) If you die and she's between 60 and her full retirement age, she gets 71.5% to 99% of your worker's basic amount.

5) If you die and she's at least full retirement age, she gets 100% of your basic amount. If you're still alive and have filed for your social security, she gets 1/2 of your benefits up to your full retirement age benefit. If you die afterwards, she reverts to getting 100% of your basic amount assuming that's bigger than her own social security that she qualifies for.

Link

You don't really want to be on Medicaid immediately after you retire. You can aim to be on Medicaid after you're really old and have spent your life savings for your enjoyment and comfort in your retirement and you have no obligation to leave anything to anyone. My wife and I have reconciled ourselves that we don't need to leave anything to anyone - we have no children of our own; we do have a will to leave our money among some relatives and charities should we croak in the near term. But the ideal picture for us, is that we spend a whole lot of our money then the next day we die. I really don't want to be old and living in an old people's home on Medicaid. But if I do, hopefully, my Alzheimers will be full blown by then and I will be blissfully be unaware that I've pissed myself soaking wet and the attendants have ignored me for three days.

This is just me hoping for the best but preparing for the worst. YMMV.

ETA additional stuff about Medicaid.

"The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple's income is in the name of the institutionalized spouse and the community spouse's income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. "

More info at this link but it's not a dot gov site.

Thanks everyone for your inputs and insights.

And thanks Rey for your extensive guidance. No disclaimers needed - I completely understand. I truly appreciate your help here. And to SF in general whenever my ignorance comes to bear. To show the extent of my ignorance, to my embarrassment, I wasn't differentiating between medicare and medicaid. I had to look up both after your comments. I didn't appreciate the difference between these two programs; I thought they were basically the same thing.

I need to read again what you wrote but I think the gist is: LTC serves to protect ones assets in the event of long term diminished ADL capacity; this is especially important when assets are shared with others (ie - spouse) to protect their quality of life.

If this is the point you're trying to drive home with me, then I think I'm finally starting to understand. If you're trying to get me to understand something else, please keep trying. I'm 100% vested in ensuring the quality of life of my wife no matter my condition. Any help is very much appreciated.