Long Term Care Insurance

[suki]

Do you have any?

Do you plan to purchase any?

As part of any good financial plan, everyone should consider purchasing long term care insurance.

Having worked in the industry, I saw many folks have their wealth eliminated and were left destitute due to the high cost of long term care. I saw many, many families who were completely unprepared for the event of needing any type of long term care (in home care, assisted living, nursing home). It seems to be one of those issues we stick our heads in the sand about and think it won't happen to us... and yet, it happens to millions.

Long term care is very expensive. Right now the cost is somewhere in the neighborhood of $4,000 per month for basic care, depending upon where you live. More involved or higher acuity care is more expensive. This does not include medications, treatments, equipment (walkers,wheelchairs, etc) and other items you will need. Without long term care insurance, you will have to pay privately for these expenses.

Medicare does not cover long term care. Medicare covers 20 days of a long term stay after a 3 night stay in the hospital with a qualifying condition... then, on days 21 - 100 Medicare will pay a set amount that is about 20% of the cost and you will have to pay the balance. After day 100... Medicare pays nothing and it is all private pay.

Once you have eliminated the savings you've accumulated by paying privately and have less than $3,000 in assets as a couple or $2,000 as an individual... you are eligible to apply for assistance through Medicaid. Of course, this varies greatly from state to state so check your state's rules.

Without long term care insurance or a revision in our national health plan, all you are working for and all the pride you've shown in never accepting assistance, could be washed away with your need for long term care.

I do not work for long term care insurance, nor do I sell it. I just highly recommend everyone include it in their investment portfolio. It is much less expensive to buy when you are young and some plans have a designated time period for which you pay and then... you're done.

**Of course, the national health care plan endorsed by physicians considers long term care and would make this a moot issue. www.pnhp.org

[suki]

Here is an excellent article from AARP on the subject.

http://www.aarp.org/families/caregiv...care_cost.html


So, have any of you purchased long term care insurance?

[bluebird728]

I have it. Got a policy years ago and consider it an essential part of my overall financial plan.

[Lady_V]

I do not have it. We can't even afford to get the Old Man health insurance, I can't justify LTC (another rant for another thread)

My outlaws are very wealthy and they do have it. He is a financial planner, he manages the stock-market items as well as life related insurances. He agrees that his clients need LTC as well.

I have worked in nursing homes and I think it's so sad that people lose their homes when a spouse needs to be cared for more than the family is able to provide.

[suki]

Good for you, bluebird!

If you purchase it at a younger age it can be really affordable.

Lady V, I know what you mean. We saw that happen many, many times. One resident was a former Vice President for Avon and had a wonderful retirement savings and pension income. Applying for Medicaid for him was very difficult as he kept crying because he'd worked hard all his life to avoid "living on the dole" as he called it. He was very upset that his money had run out and he could no longer afford his care. His monthly income was too much to qualify for Medicaid but not enough to cover his care, so to make matters worse... he had to rely on the charity of others.

[suki]

Lady V, in my state the home is now protected for the surviving spouse. It hasn't always been that way, but it is now. However, when the surviving spouse passes, the state may have a lien on the sale of the home to recover what they paid out in Medicaid.

Another couple we worked with were both in the nursing home. He had owned a bank and she had her own five and dime store back in the day. They were really fascinating people. Fortunately, they both passed away within a few weeks of each other just months before their money ran out and they were faced with what they saw as utter humiliation.

[wanderlusting]

Don't have it yet. When I worked at a financial planning office, they didn't suggest it until someone was 40 years old. So DH and I are waiting till then to purchase it.

During nursing school, I did clinicals in a veteran's home and a private care home. There is a HUGE difference!

The private care home had more CNA's and nurses, lots of activities, private rooms and a lot more homey. At the veteran's home, it was more about trying to get everyone taken care of because they were constantly short-staffed.

Because of the differences I saw, DH and I are definately getting it later. We're also looking into disability insurance

[suki]

That's good that it's in your plan. I purchased mine at 35. I pay for 10 years and then I'm done. It was very inexpensive. Be sure to get a cost-of-living rider, too. Because while $200 a day coverage may seem adequate now... it likely will not be in 40 years.

You're right in the difference between a veteran's home and a private nursing home. That's largely because of the rates collected. While the charges seem outrageously expensive, I know that many nursing homes are struggling to break even at those costs. There's a lot they need to do to fix the situation, but for now... it is what it is. You would find the same difference in my area between the homes that have a large percentage of Medicaid payors and those who have a lower percentage. There's a lot of work to be done to fix the sky-rocketing costs in that industry... but the reality is that right now it really does cost that much to provide the care.

[C@rol]

Do you have any?
No

Do you plan to purchase any?
Yes, we do.

[annymoll]

Yes, we have it.

[suki]

Fantastic! I should have known that Frugal Villagers would be ahead of the curve in this regard as well. Most folks I know haven't even considered it.

[mombottoo]

Thank you for bringing up this very important topic! Many times we don't think of such things until it is too late and then we end up with lots of bills and no assets.