LTC costs as part of retirement planning

[Deleted]

A number of recent posts across the boards dealt with costs for LTC, struggles to obtain LTC for relatives, shielding assets from look-back provisions, qualifying for Medicaid and such.  And rarely a day goes by without a flyer for a "free lunch presentation" on shielding assets.  As part of our retirement planning, we budgeted for LTC insurance, but I don't see mention of that in planning discussions here, nor in posts about assisting elderly relatives.  Is reliance on obtaining government funding for LTC needs a premise of most retirement strategies now?  What is the rationale for that perspective?  Is dependence on a taxpayer-funded program that varies widely between states a solid financial move?  Let's keep this out of the political realm, please, and focus on the dollars and cents of it. 

FWIW, we would have an additional $150,000 in net worth if we had not purchased LTC policies.

[TheOtherMe]

I didn't qualify for LTC insurance with my employer or any company I applied to because of pre-existing conditions.  So it was no longer a consideration.

[minnesotapaintlady]

Well, MY reasoning for not getting LTC is I'm single, don't care about leaving an inheritance and my "insurance" I consider to be my house.  If I have to move into LTC, selling the house (which I would want to do anyhow) would get me a solid 4 years of LTC assuming about 8K/month before moving on to the retirement accounts. While sometimes people end up in there for a decade or more, the average stay is less than 18 months and in my family it's uncommon to end up there at all, so just playing the odds, but if I burn through all the house money and all the retirement accounts, I'm fine with Medicaid.  Generally if you're already an established resident you just get moved over to that type of payment. 

[TheOtherMe]

Aug 24, 2022 15:28:07 GMT -5 minnesotapaintlady said:

Well, MY reasoning for not getting LTC is I'm single, don't care about leaving an inheritance and my "insurance" I consider to be my house.  If I have to move into LTC, selling the house (which I would want to do anyhow) would get me a solid 4 years of LTC assuming about 8K/month before moving on to the retirement accounts. While sometimes people end up in there for a decade or more, the average stay is less than 18 months and in my family it's uncommon to end up there at all, so just playing the odds, but if I burn through all the house money and all the retirement accounts, I'm fine with Medicaid.  Generally if you're already an established resident you just get moved over to that type of payment. 

Since I don't qualify for insurance, this became my plan.  People in my family don't stay in nursing homes long either.  Dad was there for 3 weeks.  

I'm not going there only as a last resort.  That's the reason the bathtub is being converted to a shower.

[giramomma]

From what I've heard, LTC insurance really can have some pitfalls

We have a taxable account that has been earmarked for nice assisted living since we got married, at age 26. Low-balling money from that and our home e  equity, we're looking at about 400K in funds. (We already have almost 200K in home equity, and our taxable account was worth quite a bit more before the market tanked).

Assuming all money, in today's numbers, with no growth, rent in an assisted living place runs 8K a month. Our pensions+SS should cover half the cost. And, also, that is very low. My pension should replace my net income, and I net more than 2K a month.

Which means we can afford to live in a nice assisted living place for about 8 years.

We also have money in retirement accounts that aren't included that calculation. So, we probably have more like a decade worth of living in a nice assisted facility before we have to start worrying about how to pay for it.

We should be able to stay in our current house until our mid-70s. Women on DH's side of the family are long lived. My side of the family is short lived. My grandparents saw their early 60s. My dad almost had a normal life span, even with stage iV cancer. I'm a wild card, with my health. We'll just see how it goes. Realistically, I don't think DH or I are going to see 90.

So, I think we have "enough" given our current ages.

[pulmonarymd]

I think shifting assets to protect them so you qualify for Medicaid is immoral. I think LTC costs are obscene. This is something that countries with national health insurance do not deal with, and the American obsession with prolonging life plays into the costs of LTC.In addition, having assets gives you options that just relying on Medicaid does not. Planning for LTC allows options as well. For example, many people age in the house they raised their family in. If you need a knee or hip replacement or break a hip, having a bathroom on the first floor may be the difference between being home and in a nursing home for recovery. LTC planning also involves advanced care planning; how aggressive one is at the end of life plays into how much one's care may cost.

[wvugurl26]

My friend's grandma paid a boat load of LTC premiums over the years. She got dementia and had to be moved to a facility for her safety. LTC insurance weaseled out of paying because they said she was capable of feeding herself and that was one of their criteria. Sure if you put food in front of her she could eat it. She had no ability to prepare it or even recognize she needed to eat.

I'm sure companies vary but I'm guessing it's hard to figure out their coverage determination factors up front.

[skeeter]

Aug 24, 2022 16:14:08 GMT -5 pulmonarymd said:

I think shifting assets to protect them so you qualify for Medicaid is immoral. I think LTC costs are obscene. This is something that countries with national health insurance do not deal with, and the American obsession with prolonging life plays into the costs of LTC.In addition, having assets gives you options that just relying on Medicaid does not. Planning for LTC allows options as well. For example, many people age in the house they raised their family in. If you need a knee or hip replacement or break a hip, having a bathroom on the first floor may be the difference between being home and in a nursing home for recovery. LTC planning also involves advanced care planning; how aggressive one is at the end of life plays into how much one's care may cost.

 1,000%

[Deleted]

Aug 24, 2022 16:48:43 GMT -5 wvugurl26 said:

My friend's grandma paid a boat load of LTC premiums over the years. She got dementia and had to be moved to a facility for her safety. LTC insurance weaseled out of paying because they said she was capable of feeding herself and that was one of their criteria. Sure if you put food in front of her she could eat it. She had no ability to prepare it or even recognize she needed to eat.

I'm sure companies vary but I'm guessing it's hard to figure out their coverage determination factors up front.

Yes, that's one of the criteria, I think they call it "acts of daily living" or something like that

[Deleted]

I think the calculation becomes more complicated when there are 2 people, and in a community property state. DH is 8 years older than I am, and Texas is a community property state. We love each other (most days at least) and neither of us wish to see the other one in need so the other one can get care.

[Deleted]

Aug 24, 2022 16:14:08 GMT -5 pulmonarymd said:

I think shifting assets to protect them so you qualify for Medicaid is immoral. I think LTC costs are obscene. This is something that countries with national health insurance do not deal with, and the American obsession with prolonging life plays into the costs of LTC.In addition, having assets gives you options that just relying on Medicaid does not. Planning for LTC allows options as well. For example, many people age in the house they raised their family in. If you need a knee or hip replacement or break a hip, having a bathroom on the first floor may be the difference between being home and in a nursing home for recovery. LTC planning also involves advanced care planning; how aggressive one is at the end of life plays into how much one's care may cost.

One of the reasons we chose our policy years ago is that it pays some part of the cost of staying at home.  Definitely not home modification for disability, but something toward home health workers for those "acts of daily living" like bathing

[Rukh O'Rorke]

Aug 24, 2022 16:48:43 GMT -5 wvugurl26 said:

My friend's grandma paid a boat load of LTC premiums over the years. She got dementia and had to be moved to a facility for her safety. LTC insurance weaseled out of paying because they said she was capable of feeding herself and that was one of their criteria. Sure if you put food in front of her she could eat it. She had no ability to prepare it or even recognize she needed to eat.

I'm sure companies vary but I'm guessing it's hard to figure out their coverage determination factors up front.

I've heard stories like this and that is why I decided against getting one. That when you need it, it won't pay anyway.

The other side is that since you have to get a policy when younger, and likely use it 15-30 years into the future, and the companies are not that stable that you might not even have the same company/policy/terms etc. and with costs going up so much - the limits in your plan likely won't be good enough to get you a spot.

Seemed more a crap shoot than courting my health.

I think I might source one of those retirement/assisted living/nursing care places where you start off independent and just change wings if you need increasing assistance. 

[Rukh O'Rorke]

Aug 24, 2022 16:14:08 GMT -5 pulmonarymd said:

I think shifting assets to protect them so you qualify for Medicaid is immoral. I think LTC costs are obscene. This is something that countries with national health insurance do not deal with, and the American obsession with prolonging life plays into the costs of LTC.In addition, having assets gives you options that just relying on Medicaid does not. Planning for LTC allows options as well. For example, many people age in the house they raised their family in. If you need a knee or hip replacement or break a hip, having a bathroom on the first floor may be the difference between being home and in a nursing home for recovery. LTC planning also involves advanced care planning; how aggressive one is at the end of life plays into how much one's care may cost.

from what I've heard, anyone who does this might really regret it if they need a nursing home for an extended stay.

[Rukh O'Rorke]

Aug 24, 2022 15:28:07 GMT -5 minnesotapaintlady said:

Well, MY reasoning for not getting LTC is I'm single, don't care about leaving an inheritance and my "insurance" I consider to be my house.  If I have to move into LTC, selling the house (which I would want to do anyhow) would get me a solid 4 years of LTC assuming about 8K/month before moving on to the retirement accounts. While sometimes people end up in there for a decade or more, the average stay is less than 18 months and in my family it's uncommon to end up there at all, so just playing the odds, but if I burn through all the house money and all the retirement accounts, I'm fine with Medicaid.  Generally if you're already an established resident you just get moved over to that type of payment. 

I've heard some places you need N of years payments in the bank and then they'll let you in and you use it up and then they switch you to medicaid.

Have you looked into how many years that is?

[Deleted]

Aug 24, 2022 17:51:36 GMT -5 Rukh O'Rorke said:

Aug 24, 2022 16:48:43 GMT -5 wvugurl26 said:

My friend's grandma paid a boat load of LTC premiums over the years. She got dementia and had to be moved to a facility for her safety. LTC insurance weaseled out of paying because they said she was capable of feeding herself and that was one of their criteria. Sure if you put food in front of her she could eat it. She had no ability to prepare it or even recognize she needed to eat.

I'm sure companies vary but I'm guessing it's hard to figure out their coverage determination factors up front.

I've heard stories like this and that is why I decided against getting one. That when you need it, it won't pay anyway.

The other side is that since you have to get a policy when younger, and likely use it 15-30 years into the future, and the companies are not that stable that you might not even have the same company/policy/terms etc. and with costs going up so much - the limits in your plan likely won't be good enough to get you a spot.

Seemed more a crap shoot than courting my health.

I think I might source one of those retirement/assisted living/nursing care places where you start off independent and just change wings if you need increasing assistance. 

Yes, the reality of an insurer going down is definitely there.  As LTC costs rise, the insurers have taken a hit and some went out of business.  

[Rukh O'Rorke]

Aug 24, 2022 18:34:32 GMT -5 soupandstew said:

Aug 24, 2022 17:51:36 GMT -5 Rukh O'Rorke said:

I've heard stories like this and that is why I decided against getting one. That when you need it, it won't pay anyway.

The other side is that since you have to get a policy when younger, and likely use it 15-30 years into the future, and the companies are not that stable that you might not even have the same company/policy/terms etc. and with costs going up so much - the limits in your plan likely won't be good enough to get you a spot.

Seemed more a crap shoot than courting my health.

I think I might source one of those retirement/assisted living/nursing care places where you start off independent and just change wings if you need increasing assistance. 

Yes, the reality of an insurer going down is definitely there.  As LTC costs rise, the insurers have taken a hit and some went out of business.  

Hope your policy is there if you need it!

I'm relying on tesla to get me through!

[Deleted]

Aug 24, 2022 15:28:07 GMT -5 minnesotapaintlady said:

Well, MY reasoning for not getting LTC is I'm single, don't care about leaving an inheritance and my "insurance" I consider to be my house.  If I have to move into LTC, selling the house (which I would want to do anyhow) would get me a solid 4 years of LTC assuming about 8K/month before moving on to the retirement accounts. While sometimes people end up in there for a decade or more, the average stay is less than 18 months and in my family it's uncommon to end up there at all, so just playing the odds, but if I burn through all the house money and all the retirement accounts, I'm fine with Medicaid.  Generally if you're already an established resident you just get moved over to that type of payment. 

That absolutely makes sense for your situation

[pulmonarymd]

Aug 24, 2022 17:52:45 GMT -5 Rukh O'Rorke said:

Aug 24, 2022 16:14:08 GMT -5 pulmonarymd said:

I think shifting assets to protect them so you qualify for Medicaid is immoral. I think LTC costs are obscene. This is something that countries with national health insurance do not deal with, and the American obsession with prolonging life plays into the costs of LTC.In addition, having assets gives you options that just relying on Medicaid does not. Planning for LTC allows options as well. For example, many people age in the house they raised their family in. If you need a knee or hip replacement or break a hip, having a bathroom on the first floor may be the difference between being home and in a nursing home for recovery. LTC planning also involves advanced care planning; how aggressive one is at the end of life plays into how much one's care may cost.

from what I've heard, anyone who does this might really regret it if they need a nursing home for an extended stay.

Depends upon when it happens. If you do it early enough to get beyond the look back period, your golden. If not, you are liable for all costs for the assets you transferred. That would be ugly. You also could need the assets for other, non-medical emergencies. So, it does not always work out

[minnesotapaintlady]

Aug 24, 2022 17:57:15 GMT -5 Rukh O'Rorke said:

Aug 24, 2022 15:28:07 GMT -5 minnesotapaintlady said:

Well, MY reasoning for not getting LTC is I'm single, don't care about leaving an inheritance and my "insurance" I consider to be my house.  If I have to move into LTC, selling the house (which I would want to do anyhow) would get me a solid 4 years of LTC assuming about 8K/month before moving on to the retirement accounts. While sometimes people end up in there for a decade or more, the average stay is less than 18 months and in my family it's uncommon to end up there at all, so just playing the odds, but if I burn through all the house money and all the retirement accounts, I'm fine with Medicaid.  Generally if you're already an established resident you just get moved over to that type of payment. 

I've heard some places you need N of years payments in the bank and then they'll let you in and you use it up and then they switch you to medicaid.

Have you looked into how many years that is?

No, haven't looked into it that closely. 

[Rukh O'Rorke]

Aug 24, 2022 21:15:51 GMT -5 minnesotapaintlady said:

Aug 24, 2022 17:57:15 GMT -5 Rukh O'Rorke said:

I've heard some places you need N of years payments in the bank and then they'll let you in and you use it up and then they switch you to medicaid.

Have you looked into how many years that is?

No, haven't looked into it that closely. 

let's go to the same one. we could continue on with our geriatric lavergne and shirley hijinks.

[Rukh O'Rorke]

Aug 24, 2022 21:30:47 GMT -5 Rukh O'Rorke said:

Aug 24, 2022 21:15:51 GMT -5 minnesotapaintlady said:

No, haven't looked into it that closely. 

let's go to the same one. we could continue on with our geriatric lavergne and shirley hijinks.

maybe this time we could give lenny and squiggy a real chance....? they'll be down the hallway....


oh- wait! hold the phone!

oh crap! Penny marshall is dead....I was gonna pitch the show to her.....

After decades of estrangment, laverge and shirley unexpected meet each other again....when Shirley's son drops her clinging and weeping self off after her DIL refuses to have her in their home anymore. He pries her arms from around his neck, and forces her into the armchair looking out the window and leaves. Shirley wails loudly, bursting into even more forceful tears.

"not this again!" we hear a familar voice off camera. Shirley, besides herself, doesn't recognize it immediately. After another zinger from laverge, shirley leaps and/or hobbles to her feet staring at her in amazement. "No. No!" Rusing to the door "Jared........" yes her son is pedo jared from subway infamy..

[minnesotapaintlady]

Squiggy is dead too.

[Rukh O'Rorke]

Aug 24, 2022 21:48:40 GMT -5 minnesotapaintlady said:

Squiggy is dead too.

why everyone getting so old and dead?

[Deleted]

I'm single and what I spend in a year, which is sustainable (my invested assets have increased on average by 2.5%/year after withdrawals since retirement 8 years ago) is about what LTC costs. About 40% of my spending is travel and charitable donations so there's plenty of wiggle room. I figure if I go into LTC I sell the house (equity currently at about $300K), travel stops, I sell the car, and most of my other expenses go to zero other than unreimbursed medical expenses.

My feeling is that Medicaid is going to get slammed with LTC costs as my generation ages and either the states will decrease reimbursements (already inadequate), facilities that rely on Medicaid will close and/or quality of care in Medicaid facilities will deteriorate. They may stick you in a facility on the other side of the state from your loved ones. You can't be picky. I want options.

I have no plans to remarry but if I ever did it would have to be a guy who could fund his own LTC.

On the Early Retirement Board there was a post a few years ago but someone who was as=king about reversing his parents' "irrevocable" trust; they needed the $$ to buy into a retirement community. Oops. What part of "irrevocable" did you not understand?

[Deleted]

Aug 24, 2022 21:39:13 GMT -5 Rukh O'Rorke said:

Aug 24, 2022 21:30:47 GMT -5 Rukh O'Rorke said:

let's go to the same one. we could continue on with our geriatric lavergne and shirley hijinks.

maybe this time we could give lenny and squiggy a real chance....? they'll be down the hallway....


oh- wait! hold the phone!

oh crap! Penny marshall is dead....I was gonna pitch the show to her.....

After decades of estrangment, laverge and shirley unexpected meet each other again....when Shirley's son drops her clinging and weeping self off after her DIL refuses to have her in their home anymore. He pries her arms from around his neck, and forces her into the armchair looking out the window and leaves. Shirley wails loudly, bursting into even more forceful tears.

"not this again!" we hear a familar voice off camera. Shirley, besides herself, doesn't recognize it immediately. After another zinger from laverge, shirley leaps and/or hobbles to her feet staring at her in amazement. "No. No!" Rusing to the door "Jared........" yes her son is pedo jared from subway infamy..

I wanna go to where you two are - I've heard laughter is good medicine

[Deleted]

Aug 25, 2022 6:11:27 GMT -5 @athena53 said:

I'm single and what I spend in a year, which is sustainable (my invested assets have increased on average by 2.5%/year after withdrawals since retirement 8 years ago) is about what LTC costs. About 40% of my spending is travel and charitable donations so there's plenty of wiggle room. I figure if I go into LTC I sell the house (equity currently at about $300K), travel stops, I sell the car, and most of my other expenses go to zero other than unreimbursed medical expenses.

My feeling is that Medicaid is going to get slammed with LTC costs as my generation ages and either the states will decrease reimbursements (already inadequate), facilities that rely on Medicaid will close and/or quality of care in Medicaid facilities will deteriorate. They may stick you in a facility on the other side of the state from your loved ones. You can't be picky. I want options.

I have no plans to remarry but if I ever did it would have to be a guy who could fund his own LTC.

On the Early Retirement Board there was a post a few years ago but someone who was as=king about reversing his parents' "irrevocable" trust; they needed the $$ to buy into a retirement community. Oops. What part of "irrevocable" did you not understand?

  

[jerseygirl]

In NJ Medicaid has a program to pay for care so people can remain in their homes rather than go to nursing homes. My DS was in that program for about a year. Program was a big help as I was paying for 24/7 live in caretaker. DS would have probably passed away in a month or 2 if moved to a nursing home.
Both mine and Jerseyguy’s families live into 90s and none have gone to nursing homes. Either family helped out or part time help. DS was only one to have full time care but for most part because of her lifetime disabilities.
So we have remodeled our house to put washer dryer on first floor. Already have 2 BRs 2 baths in first floor and only one step into house. I got a temporary ramp for my mom’s condo for the single step to allow her wheelchair entry exit
So we’re planning or hoping to stay here with either daily or live in help. Nursing home needed if not possible to stay home,eg severe dementia. But none in our families thankfully have had dementia. Most just gradually slowed down due to chronic heart and lung problems.
No LTC insurance and if really needing nursing home care we have sufficient funds or would sell house- IOW we’re self insured.

[Deleted]

Yes, the presence and ability of family to assist is very important in decision making. We have zero family so it's paid help or nothing. Our LTC policies provide some funding for home health aides which I like. There's no dementia on DH's side, but I don't know about my family.

[susana1954]

I looked into it when I was 61 so 7 years ago.  I actually talked with an advisor twice.  I am sure it has changed in more ways than just the premium.

What I found out is no doubt specific to the company he recommended, but he said that the days of unlimited LTC policies were over.  Sure, people have them, and the companies have to honor them, but those premiums have skyrocketed.

Instead, it was basically what I would call co-insurance.  You purchased a pot of 122,000+ dollars to last for 3 years, the average length of a nursing home stay.  But the insurance company didn't spend the $122,000 on you until it ran out.  Instead it disbursed, say, $3400 a month, which was approximately half the cost at the time.  You were responsible for the remainder.  If you died before the 3 years/dollars ran out, the insurance company kept the remainder.  If you didn't, you switched to self-pay or Medicaid, depending on your circumstances.  Benefits increased 3% per year.  The premium was $200 a month, and the company was Mutual of Omaha.

It wasn't worth it to me.  And I am not sorry that I made that decision.  

soupandstew , as a public service, please let us know what you find out from your advisor about cost, coverage, etc.

[NomoreDramaQ1015]

The ones my mom found was a lot of the nursing homes here want you to pay up front then you apply to your LTC for reimbursement they won't take payments directly probably for all the reasons listed here.  You're better off saving the $200+ in premiums and spending down till you get on Medicaid here.  More places accept Medicaid than LTC.