Should I apply for Federal Long Term Care before they close in a few days?
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Anonymous
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The Federal Long Term Care insurance is closing to new applicants on December 19. Let me know if it sounds worth it to get it:
- 48 years old - good health but overweight so chance I won’t pass underwriting - will have a federal pension and $1-2M in retirement when I retire in 10-15 years - 1 DC who I’d like to have some inheritance Here’s a sample policy choice, but there a a bunch of other ways to quote it: $250 /day Daily Benefit Amount 5 years Benefit Period $456,250 Maximum Lifetime Benefit ACIO 3% Inflation Protection I’m just afraid if I don’t apply now, they won’t open it back up for new applicants. Thoughts? |
Anonymous
| You didn’t specify how much it costs. Different answer if it’s $500/year vs. $10,000/year. |
Anonymous
Sorry, thought I’d included that! It’s $269/month with inflation protection and $133/month without. |
Anonymous
| How much will your pension plus social security be? |
Anonymous
| In this area $250 a day would be very low. We currently pay $500 a day plus extra aides. |
Anonymous
NP and the costs will probably increase when they re-bid the contract next year so you'll have to make this decision again at that point. |
Anonymous
It's $250/day as of now. The daily benefit and lifetime max go up by 3% per year compounded if you get the inflation protection version. Sure, it may not cover all the daily costs. But it will cover a good chunk. OP: I signed up this week too. I am within 60 days of hire at my agency so I qualified for the abbreviated underwriting. The program also refunds your premiums (minus applicable costs and benefit usage) if you die and don't hit the lifetime max. The program also covers you son if he requires LTC while you are the policyholder. Personally, I think it's a decent program. There was a thread I bumped a few days ago on this issue, lots of good debate on the pros and cons: https://www.dcurbanmom.com/jforum/posts/list/853669.page |
Anonymous
This. Check the fine print. Last time I looked, there was no cap on premium increases. |
Anonymous
It's less than half right now. |
Anonymous
The program maxes out at $450/day |
Anonymous
The insurer will also do everything possible not to pay. |
Anonymous
| If $456,250 Maximum Lifetime Benefit doesn't go up over time, that's not much. I'd self insure. |
Anonymous
After about age 70 or maybe 72, income would be about $120,000 with a pension and 2 social securities. |
Anonymous
If you take the inflation option, it goes up 3% per year compounded. |
Anonymous
But there’s no cap on premiums & the premiums will go up more. That’s why OPM is suspending enrollment. https://www.govexec.com/pay-benefits/2022/12/opm-will-suspend-long-term-care-insurance-applications-sizeable-premium-increase-looms/380467/ “Reading the tea leaves, instituting a suspension of applications shows that there’s a lack of faith or trust that it’s designed in a way that can be sustainable,” he said. “The first premium increase was around 25%, the second was as high as 125% [in some cases], and 83% on average. These premiums were quoted with the intention of staying stable for the lifetime of the coverage, which is someone’s life. And it’s not just federal workers’. They were just not priced correctly to begin with.” After the previous round of premium hikes, OPM instituted “FLTCIP 3.0,” which allows current enrollees to adjust their coverage downward in order to reduce the impact of rising premiums. Even with that change, Hatton said OPM likely made the right decision by suspending applications. “If you can’t accurately quote someone what the cost will be for a product, it shouldn’t be open ended,” he said. “That said, the reason these premiums are going up is costs are very high, and people have to figure out how to plan for long term care costs, and there’s no public option aside from Medicaid, which only provides catastrophic coverage if you’re completely impoverished yourself.” |