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|Subject: Re: Big Problems wth LongTermCare Insurance||Date: 7/12/2013 3:15 PM|
|Author: Hawkwin||Number: 72597 of 81979|
So let's say they have $1M, and one spouse has an ongoing need for LTC. At $300/day for 5 years, their ~$500,000 policy is exhausted, so they have to pay themselves.
They use 500K of their 1M for the next 5 years, leaving them with 500K.
This is the confusion.
Partnership allows you to either protect a specific amount, in this case 500k, from spend down or the entire amount. In your example, the policy would pay out 500k, then you would have to spend down to 500k left in assets before Medicaid would step in.
If you had the state min for Total Protection, once the policy lapsed, all assets would be protected.
To me, that's a big kicker. Even though your assets are "protected" the ill spouse doesn't get to stay in the nice full-service facility. They must go into a (low level of service) Medicaid facility.
Perhaps they aren't all hell-holes, but the ones I've personally seen are pretty close.
I'm not championing Medicaid facilities. I am also not as concerned about the person in the facility (who may not have their full mental capacity) as I am about the person that remains at home and otherwise might have to significantly sacrifice their standard of living.
In otherwords, I see LTC as a means to insure the standard of living for the healthy spouse, not for the sick spouse. There is very little reason for an individual (vs. a couple) to get LTC unless they have dependants or they are determined to pass assets to heirs (and there are likely better ways to do that).
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