don, you and i have a cousin who had a long-term care policy for herself and her now deceased husband. i think they were about 50 when they got it. it had no cap on it, something that's hard to find these days. but when she had to put him in assisted living, it cost $8000 a month. i was there one day when she was faxing the bills in. later that week, i was still there when she got her check. that policy paid for itself, i.e., she recouped their premiums, in less than a year. he only lived a few years once he was in that facility , but they got their money out of it. again, it had no cap on it which probably helped a lot. we checked those policies years ago. after a lot of discussion, we decided to invest in other things we had both been doing anyway. hopefully, we have more than we need to take care of ourselves, as we did with my at home bedridden mother for 3 years before she died. yes, we were spending "our inheritance." but until she died, it was her money that she and my father accumulated during their lifetimes. your info about medicare and medicaid is accurate. the only thing to add: you have to put your home into a child's name 5 years before you go into a nursing home or the state has the right to it if medicaid paid for your parent's care. as you said, if one spouse is still in the home, the state cannot touch it. but if both are on medicaid nursing home care, the state has the legal right to the home for the second spouse. in the past, people got clever and tried to deed a home to a child, etc. just before going to a nursing home,. so has to be done 5 years before assisted living/nursing home level of care. but i have heard too many stories about parents who deeded their home to a child, only to have the child essentially steal the house while mom or dad were still living there and leave the parent in poverty and/or homeless. so really have to know your own family well to do that. otherwise, well said!!
I am a retired financial advisor, and Long Term Care was part of financial planning for my clients.
Allow me to add that most of long term care benefits are payed for in home care. If the beneficially of the policy is unable to perform 2 or more ADL’s or is suffering from dementia, many times they can be treated at home. In home benefits range from in home nursing care, mental and physical therapy to construction of ramps for wheel chair access and more.
Brilliant article , Don. It’s so depressing to see companies - on both sides of the Atlantic - raping the elderly and their families. Supported of course by politicians. I wish we could change the status quo…
I'll be saving these questions for the next time someone asks me if LTC insurance is right for them. I'm happy I bought my policy when I was 48, they don't write 'em like that anymore. Thank you for an excellent perspective.
Deeply interesting topic, thank you - and I can never seem to find the answer to the side-question "WHY are care homes so appallingly expensive (and why hasn't anyone come in and offered a reasonable price for that service that steals all their trade?)" Because the same situation exists here in the UK and - it's shocking.
This may be naive of me, and the answer may be "Because they can. Period." Or more probably, it's the effect of everyone in the chain charging what the normal rate for their services is, and if they didn't, they'd lose money because of the similarly expensive services feeding them up the chain.
But it does seem a weird thing to be such a source of huge financial anxiety in everyone's life, and sometimes absolutely ruinous to people's savings, and yet seemingly locked in place with no challengers...?
don, you and i have a cousin who had a long-term care policy for herself and her now deceased husband. i think they were about 50 when they got it. it had no cap on it, something that's hard to find these days. but when she had to put him in assisted living, it cost $8000 a month. i was there one day when she was faxing the bills in. later that week, i was still there when she got her check. that policy paid for itself, i.e., she recouped their premiums, in less than a year. he only lived a few years once he was in that facility , but they got their money out of it. again, it had no cap on it which probably helped a lot. we checked those policies years ago. after a lot of discussion, we decided to invest in other things we had both been doing anyway. hopefully, we have more than we need to take care of ourselves, as we did with my at home bedridden mother for 3 years before she died. yes, we were spending "our inheritance." but until she died, it was her money that she and my father accumulated during their lifetimes. your info about medicare and medicaid is accurate. the only thing to add: you have to put your home into a child's name 5 years before you go into a nursing home or the state has the right to it if medicaid paid for your parent's care. as you said, if one spouse is still in the home, the state cannot touch it. but if both are on medicaid nursing home care, the state has the legal right to the home for the second spouse. in the past, people got clever and tried to deed a home to a child, etc. just before going to a nursing home,. so has to be done 5 years before assisted living/nursing home level of care. but i have heard too many stories about parents who deeded their home to a child, only to have the child essentially steal the house while mom or dad were still living there and leave the parent in poverty and/or homeless. so really have to know your own family well to do that. otherwise, well said!!
Thanks, Lucile, for that enlightening additional information. Do you know if the 5-year rule is just Alabama or in all Medicaid plans?
I think it's a national rule.
I am a retired financial advisor, and Long Term Care was part of financial planning for my clients.
Allow me to add that most of long term care benefits are payed for in home care. If the beneficially of the policy is unable to perform 2 or more ADL’s or is suffering from dementia, many times they can be treated at home. In home benefits range from in home nursing care, mental and physical therapy to construction of ramps for wheel chair access and more.
Thanks for that clarification, David. Glad you're there to keep me honest!
Brilliant article , Don. It’s so depressing to see companies - on both sides of the Atlantic - raping the elderly and their families. Supported of course by politicians. I wish we could change the status quo…
I'm not sure who's doing the ripping, but something stinks for sure.
I'll be saving these questions for the next time someone asks me if LTC insurance is right for them. I'm happy I bought my policy when I was 48, they don't write 'em like that anymore. Thank you for an excellent perspective.
Thanks for your kind words.
Deeply interesting topic, thank you - and I can never seem to find the answer to the side-question "WHY are care homes so appallingly expensive (and why hasn't anyone come in and offered a reasonable price for that service that steals all their trade?)" Because the same situation exists here in the UK and - it's shocking.
This may be naive of me, and the answer may be "Because they can. Period." Or more probably, it's the effect of everyone in the chain charging what the normal rate for their services is, and if they didn't, they'd lose money because of the similarly expensive services feeding them up the chain.
But it does seem a weird thing to be such a source of huge financial anxiety in everyone's life, and sometimes absolutely ruinous to people's savings, and yet seemingly locked in place with no challengers...?
Thanks for the comment, Mike. I wish I knew the answer.
Superb overview of a vexing topic. Wish we had more compassionate options for end of life care.
Thanks! It looks like we'll have to create them ourselves.
Every time they demand more money, I'm reminded that we're trapped by grifters. As soon as something is run as a for-profit, it's going to be corrupt.