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The Collapse of Long-Term Care Insurance
https://prospect.org/familycare/the-collapse-of-long-term-ca...

Attempts to have the private market manage support and services for the elderly or people with disabilities have utterly failed.

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intercst
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The Collapse of Long-Term Care Insurance

Doesn't surprise me. Some 25-30 years ago my employer (Motorola) brought in an insurance company that offered discounted LTC insurance to give presentations.
The session I went to had about 50 people in the audience, probably 80% engineers. During the Q&A period after the presentation, we engineers were working the numbers and came to the conclusion that a LTC policy didn't make financial sense.

You can't fool math.
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I've considered letting mine go, but in the end keep for conservation of capitol for the kids. I've had it for many, many years and it currently costs $2100/yr for around $15,000/mo benefits with no time limit. There's the usual 90 day waiting period. The policy benefit increases a little every year. The company has been very stable so I'm not concerned about their ability to honor claims if needed.

Bill
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I'm keeping mine so I can exclude more assets when determining Medicaid eligibility. From https://www.aaltci.org/long-term-care-insurance/learning-cen...

Purchasing a Partnership-qualified (PQ) long term care insurance policy provides an added benefit. This benefit is described as “dollar-for-dollar” asset disregard or “spend down” protection. Individuals who purchase a PQ policy 'earn' one dollar of Medicaid asset disregard for every dollar of insurance coverage paid on their behalf.

My dad's in a very nice assisted living place, private pay, i.e., they don't accept Medicaid. Still, I'd rather die than live like that. Also toured Medicaid facilities, and definitely wouldn't want to go there. No, they're not hellholes (maybe some are, but not the ones I saw). Some have buildings that are shabby, some are newer places, staff are wonderful. But the lack of privacy, autonomy, and quiet would drive me bonkers. Doable for a couple of weeks if I were in rehab, but for months on end? Years? No thank you.

However, DH is more easy-going and adaptable, and if I predecease him and if necessary he would go that route. We have enough assets and income to cover a few years, but if he lives long enough, it'll be Medicaid. Which covers only the bare minimum, so it'll be nice to have some extra $ to improve quality of life.
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...$15,000/mo benefits with no time limit.

Yeah, I'd keep that. Can't get a policy like that any more, I think they all have 3-year limits now.
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The original idea was to be able to remain home. Now I'm wondering if being somewhere where socializing is easier should be considered. In the end, it all may be a mute point! ;)
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1poormom just got claim approval, so she's going to start getting monthly benefits. She could last another 5-10 years, so the money will be helpful. Her premium will be suspended, which also is a benefit (her premium was a bit high).

1poorlady and I both have LTC insurance through the company. We may never need it (when does anyone want to need insurance??), but our premium is so cheap that it was worth the gamble. Turns out that with 1poormom going through dementia, I now have a family history. Plus my two surgeries the past year. The LTC may have been a good move for us.
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My parents both had LTC insurance, and for them it was the best investment ever. My dad spent 9 years in a nursing home after a series of strokes, and in the end it covered about 80% of his expenses. My mother spent 3 years in a nursing home (she died before him) and she had no out-of-pocket expenses. She died in 2005; Dad died in 2016. You can't get the policies they had, which was through Genworth. (LTC has not been a profitable business line for Genworth.)

My wife and I both have LTC policies that we got in 2012, through Northwestern Mutual. They have boosted the premiums since we started. Our monthly benefit started at $9,000/month, with an inflation kicker. The monthly benefit for the coming year will be about $13,000, with a 9 year maximum, and monthly premium for each is just under $500 now. We can decline the inflation increase twice, after which the amounts would be frozen. Nine years in a nursing home is a long time, but hey, my dad did it.

Bill
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YewGuise: I'd rather die than live like that.

Like what? There are various qualities of assisted living. The Countess and I are on a waiting list to get into a CCRC. We will definitely not take a hit in standard of living when we go there*. (CCRC in California means "Continuing Care Residential Community" meaning everything from independent living to assisted living, to "memory care" [dementia], to nursing care.) There are waiting lists at all the facilities we have visited here in California (and one in New Mexico.) They must be doing something right. None of these are Medicaid facilities. I believe Medicare does partly pay for any nursing care needed.

CNC
*Unless having restaurant quality meals served three times a day, having an ocean beach just across the street, or having to live in only a two bedroom apartment is a hit in standard of living.
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The original idea was to be able to remain home. Now I'm wondering if being somewhere where socializing is easier should be considered.

That would be us. We are both Shy People™

In the end, it all may be a mute point! ;)
Ouch! I am sure you meant moot point. 😁 😆 😅 😂 🤣

CNC
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V

LOL, thanks CNC!

BTW, you mention above all of the most excellent attributes to the Carlsbad CCRC you are waiting on. Sounds wonderful! However, I picked up on a previous thread where you mentioned that often these organizations eventually sell off to a venture capitalist, or similar group, and all of a sudden things change for the worst and you loose control. It's all about profit/money at that point. That's a concern for me and, ultimately, family. What are your current thoughts in this regard?

Thanks,

Bill (who lives next to Reata Glenn)
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Or as Joey from Friends says "Moo Point"
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BTW, you mention above all of the most excellent attributes to the Carlsbad CCRC you are waiting on. Sounds wonderful! However, I picked up on a previous thread where you mentioned that often these organizations eventually sell off to a venture capitalist, or similar group, and all of a sudden things change for the worst and you loose control. It's all about profit/money at that point. That's a concern for me and, ultimately, family. What are your current thoughts in this regard?

Thanks,

Bill (who lives next to Reata Glenn)


The Carlsbad-by-the-Sea Retirement place is owned by Front Porch. I looked at their financials and they seem clean. They are also associated with the Lutheran Church somehow. (One is right across the street.) Is that good or bad? From their website: Front Porch is a not-for-profit community of communities that believes in the power of partnership. Philanthropic support for Carlsbad By The Sea comes from California Lutheran Homes and Community Services, a Front Porch partner with a long tradition of service and philanthropy. Your gift through the California Lutheran Homes and Community Services could greatly impact the lives of residents at Carlsbad By The Sea.

We will be in Carlsbad next week at the Grand Pacific at Carlsbad Inn, just a block from CBtS. Do you venture that far south? Let's do lunch!

Cliff
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Bill (who lives next to Reata Glenn)

We visited Reata Glen while they were just breaking ground, just outside the city limits. Apparently some issues with the city planning. We were very interested and talked with them, gave them our finances, etc. They sniffed haughtily and asked if we would consider a one bedroom unit instead of the two bedroom we had indicated. But they are fabulous. Very similar to the La Costa Glen in Carlsbad.

Cliff
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My parents both had LTC insurance, and for them it was the best investment ever. My dad spent 9 years in a nursing home ...You can't get the policies they had,

They got an excellent deal because the insurance companies grossly mis=priced the policies. They thought that they were selling hamburger, but it turns out they were selling prime grade steak at hamburger prices.


Nine years in a nursing home is a long time, but hey, my dad did it.

That's why Las Vegas casinos tout the people who win $1,000,000 at Keno or bingo. Gets everybody to think that this could be them, and ignore the statistically likely outcome.

As a great man once said, "No one here gets out alive."
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CNC
*Unless having restaurant quality meals served three times a day, having an ocean beach just across the street, or having to live in only a two bedroom apartment is a hit in standard of living.


Yeahbut *what* restaurant?
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If you go back to 1996 and the passage of HIPAA which created Qualified Long Term Care Insurance, which banned 'Medical Necessity' as an insurance trigger, transferred the decision of initiating LTC insurance benefits to the insurer thru ADL triggers and allowed insurers to price LTC premiums based on actuarial assumptions the insurance actuaries unilaterally chose....you get dramatically under priced premiums in the early years. But then the premiums rise sharply over the ensuing years, more insurers discontinue offering new policies, the existing policy holders are informed their policy elimination period has increased or the annual inflation adjustment has been reduced along with premium hikes they can lobby state legislatures they must have to be able to pay future policy benefits and....well hopefully....you get the picture.

Having retired from the financial planning industry I can say from my experience with them, the insurance industry are the grand masters of deception and self interest. The early years CEOs and execs of NY Life and J. Hancock received sizable bonuses for the increased revenue from new LTC policy sales. They got what they wanted. Those policy holders who were 'lucky' enough to become disabled in the first 10 to 15 years of policy ownership qualifying for LTC benefits have benefited from the policy. Those who remain independent into later years will likely not be so 'lucky'.

BruceM
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