Long term care insurance

[Anonymous]

800-2.5m range

Let's say this is the range when LTC insurance would be helpful. To me it seems like such a narrow range -being able to estimate -that this will be a future amount -this is where you'll end up, adjusted for inflation -with all the other decisions in life you'll make along the way .... I'm guessing the process and cost over time won't be worth the aggravation.

[Anonymous]

Anonymous wrote:We were really surprised to find out that no particular nursing home is obligated to accept your LTC insurance. We were fortunate that when we suddenly needed to find a facility for our mom there was one available that took her insurance. If you think you might want to end up at a particular place some day make sure they take whatever your insurance is. Of course that could change.

Usually they’ll take your money first and then expect you to collect from your insurance policy. So if they charge you more than what your benefit is you are on the hook for the difference. Structurally they do not have any relationship with the LTC insurance carrier. They will help you fill out the paperwork to get reimbursed though (for a small fee in some cases).

[Anonymous]

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

[Anonymous]

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

I think, by and large, the big insurance companies have stopped offering unlimited policies and restructured their LTC plans. But, this plan is a federal LTC plan. if the insurer goes insolvent...eh, i think there would be much bigger problems to worry about. too big to fail, so to speak. but, it is a worry of mine since i don't anticipate needing it until much later in life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

I think, by and large, the big insurance companies have stopped offering unlimited policies and restructured their LTC plans. But, this plan is a federal LTC plan. if the insurer goes insolvent...eh, i think there would be much bigger problems to worry about. too big to fail, so to speak. but, it is a worry of mine since i don't anticipate needing it until much later in life.

I thought the fed plan was a disaster. The rates have gone way up over the years.

[Anonymous]

Anonymous wrote:No, I plan to self insure. I also have no interest in wasting away in diapers in a $15,009 a month memory care unit. Just OD me.

Yeah um, if this is what you really want, then you need to write a super tight "do not rescucitate" will now and one that says that if you can't feed, bathe and cloth yourself, then you do not want to be offered any food or otherwise. The point, by the time you're losing it with dementia or through a fall or something else, you won't be able to assert these types of rights yourself and it's illegal for your friends and relatives to do this for you. Instead, your partner or family will end up footing the bill with your estate (or theirs) for $10-15K/month to have your diapers changed, with crappy/constantly rotating care, and no end in sight. Hell, make sure you have a really good power of attorney because it's a huge PITA for anyone who is just trying to help you manage your finances if you cannot do it yourself. The fact that folks can spend their entire lives saving and then watch it squandered in months on crappy care at the end is a tragedy. And that's if you're the fortunate ones with millions in retirement savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

I think, by and large, the big insurance companies have stopped offering unlimited policies and restructured their LTC plans. But, this plan is a federal LTC plan. if the insurer goes insolvent...eh, i think there would be much bigger problems to worry about. too big to fail, so to speak. but, it is a worry of mine since i don't anticipate needing it until much later in life.

I thought the fed plan was a disaster. The rates have gone way up over the years.

https://federalnewsnetwork.com/benefits/2023/09/federal-long-term-care-insurance-premiums-to-increase-by-as-much-as-86-data-shows/

The rates will continue to go up because the initial actuary work was terrible and the feds are not going to subsidize the plan

[Anonymous]

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

Most of those in home services bill $30-35 per hour so even if your care is only 8-10 hours a day, $150/day won't come close to cover your costs. If it's 24 hour care, good luck. I guess there's nursing homes. Try to find one that hasn't yet been bought a private equity fund with a 40/1 nurse to patient ratio. Otherwise, you'll be sitting in your mess for hours.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

I think, by and large, the big insurance companies have stopped offering unlimited policies and restructured their LTC plans. But, this plan is a federal LTC plan. if the insurer goes insolvent...eh, i think there would be much bigger problems to worry about. too big to fail, so to speak. but, it is a worry of mine since i don't anticipate needing it until much later in life.

I thought the fed plan was a disaster. The rates have gone way up over the years.

LTC is no longer profitable (if it ever was). There was a time you could buy good coverage but that was before the liabilities really kicked in and caused a huge shakeout in the industry. It's better to self insure and have a strong will with a good plan to address your wishes if you get dementia or become an invalid.

[Anonymous]

Anonymous wrote:

800-2.5m range

Let's say this is the range when LTC insurance would be helpful. To me it seems like such a narrow range -being able to estimate -that this will be a future amount -this is where you'll end up, adjusted for inflation -with all the other decisions in life you'll make along the way .... I'm guessing the process and cost over time won't be worth the aggravation.

The advice I've heard is that if you're roughly in that range retiring right now, it may make sense to look at more closely. If you have a lot more, you can likely self-insure unless you have a family history of longevity+ dementia, if you have much less, you're likely to deplete your assets/move your assets if you need LTC and be on medicaid anyway. But in between you're probably too rich to want a Medicaid institution and it would suck more for you to deplete your assets, but it would also suck to have to set aside the amount of assets needed to self-insure.

It's especially important for spouses to discuss and consider this together. The awful situation is when the caregiving burden becomes too much for one spouse and the other has to go into LTC. The couple then depletes their assets and the caregiving spouse ends up with little to live on and no spouse to provide the care and no money for LTC. So their old age is caring for a declining spouse, living meagerly while their spouse is in LTC/dies, and then ending up in a sub-par Medicaid LTC facility as soon as they aren't able to live independently. So it rubs me really wrong when the older spouse--usually male--with a shorter life expectancy--again usually male--makes a solo decision to not plan for this reasonably without really working through the details of the various situations with their spouse. So, if you have a spouse, make sure they also really think that it 'won't be worth the aggravation' too. LTC insurance may or may not be the answer, but "winging it" isn't either.

[Anonymous]

Anonymous wrote:The new policies are expensive but are a bit different than those available in the past. There are three types of LTC policies that I know of:

Type 1: A cash indemnity policy where you get a payout once you can no longer perform two activities of daily living — the money is yours to do whatever you want with it (Securian III is one of these I think). In other words, you don’t submit receipts. These are bought in increments of coverage like 5 years or 3 years.

Type 2: Traditional policies like the federal policy where you pay a yearly rate that can go up, but increases are regulated by the state. For these once you can no longer perform 2 ADLs and have LTC expenses, you submit receipts and get reimbursed by the policy.

Type 3: Hybrid policy that combines LTC with life insurance. You pay a fixed amount into the policy and then are done paying. This is a reimbursement policy where you would submit receipts, but if you don’t use the policy what you paid is payable to your heirs as a death benefit. Some offer unlimited lifetime benefits (OneAmerica).

Like all insurance it’s hard to talk about it as a “good deal” or not. If you have a family history of dementia, Parkinson’s or something like that it can be good to have a safety net. In DC the nice memory places cost $120k a year or more. People are living longer and it’s less likely family members can care for seniors at home because of modern life.

Probably most people can self insure in this area because it’s so affluent. But these policies are really for people who do the math and realize if they defy the odds they or their spouse might run out of money.

Yes I got Part 3 type of insurance, if I get sick and can’t perform certain functions I would get cash to pay for whatever I need (like a helper or nurse at home or whatever) and if I don’t use it, it goes to my kids upon my death. With the cost of LTC we aren’t poor but we aren’t rich so figured this is a good middle ground so as to not burden my kids

[Anonymous]

Anonymous wrote:

Anonymous wrote:

800-2.5m range

Let's say this is the range when LTC insurance would be helpful. To me it seems like such a narrow range -being able to estimate -that this will be a future amount -this is where you'll end up, adjusted for inflation -with all the other decisions in life you'll make along the way .... I'm guessing the process and cost over time won't be worth the aggravation.

The advice I've heard is that if you're roughly in that range retiring right now, it may make sense to look at more closely. If you have a lot more, you can likely self-insure unless you have a family history of longevity+ dementia, if you have much less, you're likely to deplete your assets/move your assets if you need LTC and be on medicaid anyway. But in between you're probably too rich to want a Medicaid institution and it would suck more for you to deplete your assets, but it would also suck to have to set aside the amount of assets needed to self-insure.

It's especially important for spouses to discuss and consider this together. The awful situation is when the caregiving burden becomes too much for one spouse and the other has to go into LTC. The couple then depletes their assets and the caregiving spouse ends up with little to live on and no spouse to provide the care and no money for LTC. So their old age is caring for a declining spouse, living meagerly while their spouse is in LTC/dies, and then ending up in a sub-par Medicaid LTC facility as soon as they aren't able to live independently. So it rubs me really wrong when the older spouse--usually male--with a shorter life expectancy--again usually male--makes a solo decision to not plan for this reasonably without really working through the details of the various situations with their spouse. So, if you have a spouse, make sure they also really think that it 'won't be worth the aggravation' too. LTC insurance may or may not be the answer, but "winging it" isn't either.

This. Many people don't even realize this is a thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I bought into the federal LTC plan at the age of 24 (now in my 30s). I have an unlimited policy with a 4% inflation protection which is currently just shy of $150/day. premium is currently $93/month which will go up to $115 in 2025 and $141 in 2026. i am under 40 so the IRS allows me to use my HSA money toward LTC premiums up to a certain amount (it's not much).

i think i will weather the storm and ride this one out. but, the plan is to not need until much later on in life. the thing that makes me want to hold on to it is because i don't see many options right now for unlimited policies.

The question is how many of those policies did your insurer write and will they be solvent when and if you need to use it. The reason the policies aren't written is that they bankrupted the initial LTC insurers

I think, by and large, the big insurance companies have stopped offering unlimited policies and restructured their LTC plans. But, this plan is a federal LTC plan. if the insurer goes insolvent...eh, i think there would be much bigger problems to worry about. too big to fail, so to speak. but, it is a worry of mine since i don't anticipate needing it until much later in life.

I thought the fed plan was a disaster. The rates have gone way up over the years.

The federal plan has been suspended for new enrollees.

https://www.ltcfeds.com/

It’s the “federal” plan, but it’s run by a private company, John Hancock, with no government subsidy. John Hancock is allowed to raise rates every 7 years. Last time they increased premiums, it was an average of 83% per enrollee. This says premium increases were supposed to go out last fall, but I don’t know if that happened.

I looked at this plan when I was a Fed, but I didn’t get it because there’s no assurance that the premiums won’t become uneconomic by the time you actually need the coverage. LTC insurance isn’t really “insurance,” it’s more like a dental insurance, which turns out to be a forced savings plan, in most cases.

https://www.farrlawfirm.com/long-term-care-insurance/why-did-the-opm-suspend-its-long-term-care-insurance-program-for-2-years/#:~:text=Why%20Did%20This%20Happen%3F,again.

https://federalnewsnetwork.com/benefits/2023/09/prepare-to-brace-yourself-for-the-return-of-federal-long-term-care-insurance-options/

John Hatton Well, it’s a good question. Just to start with, where the federal long term care insurance program is, they’ve been operating on seven year master contracts between OPM and the insurer John Hancock that will allow premiums to go up every seven years. And they have enrollees when they enrolled in the program. We’re told that these were the premiums, that they hope to stay stable. Now they can go up on a class basis to insure the solvency of the fund. But there’s that kind of fine print contractual language, but it’s gone up to such a degree that it’s hard to think any reasonable person could have predicted such a high premium increase. And so this newest contract renewal started in May. Enrollees are going to start receiving letters indicating their premium increases this week, the week of Sept.11, and then they will have 60 days to make choices on whether to accept that premium increase or to take some reduced coverage as low as just getting coverage for the amount of premiums they paid. We don’t know the total amount, OPM has not released that. They had released that in the past. The last time premiums went up, they went up as high as 126% and 83% on average. So I’m expecting another huge premium increase, which is going to be very difficult for people to accept.

[Anonymous]

So it rubs me really wrong when the older spouse--usually male--with a shorter life expectancy--again usually male--makes a solo decision to not plan for this reasonably without really working through the details of the various situations with their spouse.

Very likely it's not men here on DCUM who keep saying "forget LTC insurance, let me die or get euthanized."

[Anonymous]

Anonymous wrote:

So it rubs me really wrong when the older spouse--usually male--with a shorter life expectancy--again usually male--makes a solo decision to not plan for this reasonably without really working through the details of the various situations with their spouse.

Very likely it's not men here on DCUM who keep saying "forget LTC insurance, let me die or get euthanized."

Eh, there's a lot of guys in the money/finance forum. My guess it's at least some of them.