Long Term Care Insurance

[Frugal In Virginia]

What do others think about Long Term Care Insurance. When (if ever) does it make sense to purchase it?

Wife and I are in our mid-50s and in good health currently. Still working but we are FI. So do we take our chances and self insure? My wife (a nurse) has been pushing the idea, partly because her mother is going through some health issues now and may soon have to be institutionalized.

So just wondering if others have thought about Long Term Care Insurance and what factors you might take into consideration if/before purchasing it?

Brad

[TheDude]

I think LTC is a very personal decision. I think you really have to look at your chances of needing it. My mom has a portfolio of just about 1mil and a pension. She just turned 62 and has a husband who is in his 50s. She purchased LTC at the persuasion of her adviser. I think LTC is a good idea for her because we have a history of Alzheimers in our family and my mother has diabetes (believed to be very related to Alzheimers). My grandma was in a homes for a long time that weren't all that nice as result of not having a good source of money. My mom has comfortable place in a life but if she ever went to a home she would eat through portfolio pretty quick.

Good Luck!

[Spork]

I struggle with this a little, too.  My mother has it... and it's paid off.  She has alzheimer's and it's doing a good job of paying for her long term costs.

Personally: having watched my mom, I'd probably prefer to snuggle up to a 9mm before going down my mom's path... though by the time you need to make that decision, you're probably not able to implement it.

[stevesteve]

I know someone who has been paying for long-term care for ~10 years and recently got a notice that they need to contribute significantly more to keep the same defined daily benefit or their benefit would be reduced if they paid the same rate.  This was improved by their state's insurance commission.  Obviously it sucks to have put thousands into it and then find out you need to put in thousands above what you had planned to keep the benefit, put in what you had planned and receive less, or give it all up and have wasted thousands.

This isn't to say that it's good or bad.  I just think the market is significantly smaller and that creates problems with estimating costs in a way that doesn't seem to happen for life insurance.  I'm not sure how common this is but it's something to watch out for.

[BZB]

I have always bought it when it is offered through my employer. Usually it only has cost me about $4 per month. When I got my first job with benefits an HR person told me the story of her husband who had some catastrophic trauma in his 30's (can't remember if it was a car accident, aneurysm, or what) and she goes to feed him at the nursing home on her lunch break every day. That thought stuck in my head.

[Nords]

What do others think about Long Term Care Insurance. When (if ever) does it make sense to purchase it?
So just wondering if others have thought about Long Term Care Insurance and what factors you might take into consideration if/before purchasing it?

The industry has drastically underestimated its actual expenses, so many of today's policies may still be badly priced.  One exception could be the Federal Long-Term Care Insurance Program (available to military & civil service) and other types could include hybrid policies.
http://the-military-guide.com/2012/12/06/interview-whats-wrong-with-long-term-care-insurance/

Whenever you research a quote, look at the table of premium expenses.  Pretend that you're going to start using the policy when you're 75, 80, or 85 years old and see how much you spend in premiums if you start paying at ages 55, 60, and 65.  The policy premiums typically take a prompt jump up after age 60, although of course there's no guarantee that buying in your 50s will evade premium increases.

It's probably better to go for a policy that covers most (but not all) of your expenses instead of paying for total coverage.  You'd ideally want an exclusion period of at least 90 days, an annual inflation increase of 3%-5%, and a duration of three years or less.  You might also want to cap the total payout.  All of those will reduce your premiums, although admittedly at the price of hedging your bets instead of laying off all risk.

I've been taking care of my Dad's finances for the last two years.  His long-term care insurance policy was eventually bought by John Hancock, and their bureaucracy reminds me of a Dickens novel.  Every month I need a statement from the care facility, which I have to fax (no, seriously) to JH.  No e-mail or postal mail is acceptable.  JH has finally reached the point (a couple months ago) where they'll electronically deposit the funds in Dad's checking account, but for the first 18 months of payments I was getting paper checks in the mail.  You might want to check the process with your chosen insurer to see if your premiums are being consumed by antiquated & obsolete bureaucratic practices.

Have your genome analyzed by 23andMe or one of the other companies.  You can assess your genetic risk of Alzheimer's Disease (and other syndromes) to make a more calculated decision.

[mahina]

my mom had ltc insurance through my father's final employer. both are now deceased. she lived with me, and then i cared for her for several years after she transitioned to a ltc facility.

the ltc ins was very helpful while mother was living with me. it paid for nurses aides to come and help with bathing, changing bedding, etc. local agencies were able to bill the insurance directly, which they liked.

after she moved to the nursing home, the situation was different. the business office there was not familiar with the insurance, and wanted to be paid up front, letting the ins reimburse the family. did i mention the nursing home charged $14,000 per month?

mom did not have property, so she was medicaid eligible. but the medicaid staff was not familiar with ltc ins, so several difficult visits and conversations were required to help them understand mother's insurance benefit was not income. the ltc insurance was first payer, then whatever retirement benefits she had, and medicaid paid the balance.

a friend's husband had a stroke while in his late 40s, and was in a nursing home for the rest of his life (almost 30 years). because they had property and savings, he was not medicaid eligible, and she paid the $14,000 per month until there was nothing left. then medicaid kicked in. she is now in her 70s with no savings for her own healthy late years.

before you decide about ltc ins, i'd say it's best to plan how and where you want to spend your later years. the ins decision will flow from that plan.

[msilenus]

You could consider using 23andme to guide your decision, and get an edge over the insurance company's actuaries.  (It's $100 for a genetic profile.)  I have a family history of Alzheimers, but I lucked out and am not carrying any of the known genetic variations associated with it.  (That still leaves unknown genes on the table, of course.)  As an added bonus, you'll learn a lot of unrelated stuff about your genetics and heritage.

Of course: not everyone gets good news though, or is happy about what they hear.  Heck: I doubt anyone gets out without any bad news whatsoever.  I wouldn't do it if you can't shrug off finding out about an elevated risk of something awful.

[oldtoyota]

a friend's husband had a stroke while in his late 40s, and was in a nursing home for the rest of his life (almost 30 years). because they had property and savings, he was not medicaid eligible, and she paid the $14,000 per month until there was nothing left. then medicaid kicked in. she is now in her 70s with no savings for her own healthy late years.

Is there another way to handle the situation above? I've wondered if it would be better for us to get divorced if this happens to us. I think it's terrible for the nursing home industrial complex to leave a spouse with absolutely nothing.

[Spork]

a friend's husband had a stroke while in his late 40s, and was in a nursing home for the rest of his life (almost 30 years). because they had property and savings, he was not medicaid eligible, and she paid the $14,000 per month until there was nothing left. then medicaid kicked in. she is now in her 70s with no savings for her own healthy late years.

Is there another way to handle the situation above? I've wondered if it would be better for us to get divorced if this happens to us. I think it's terrible for the nursing home industrial complex to leave a spouse with absolutely nothing.

I think the "better way" is a good LTC policy.

I'm no fan of nursing homes.  Seriously!  But... I really don't blame them either.  They're ridiculously expensive to run and you have to fight through mounds of government red tape.  And there will always be at least one crazy family member of at least one patient that makes your life a living hell.

[jrhampt]

Anyone else use 23andme?  I think this would be interesting to do for myself and might even make a good gift for one or two family members.

[sheepstache]

a friend's husband had a stroke while in his late 40s, and was in a nursing home for the rest of his life (almost 30 years). because they had property and savings, he was not medicaid eligible, and she paid the $14,000 per month until there was nothing left. then medicaid kicked in. she is now in her 70s with no savings for her own healthy late years.

Is there another way to handle the situation above? I've wondered if it would be better for us to get divorced if this happens to us. I think it's terrible for the nursing home industrial complex to leave a spouse with absolutely nothing.

If you google spouse protection and medicaid you'll see some of the rules governing this.  There are federal guidelines but there appears to be big differences between states.  It seems common that the healthy spouse can keep the house and their income and there are even situations in which they can keep some of the ill spouse's income.  I'm less clear on the assets question.  The max dollar amount of joint liquid assets you can keep appears to be just a little over $100,000?  So if you are already retired and relying on retirement accounts (say, if we're talking about "normal" retirement, not mmm-style), I don't see how that's enough assets to live on.  This is just skimming so there's probably more to understand about it.

http://www.nolo.com/legal-encyclopedia/medicaid-protections-spousal-income-during-long-term-care.html

I would be worried about divorcing in response to a health disaster since medicaid has a five-year look-back period and it's possible they might hold it against you if they determined the divorce was a formality just to qualify. 

[sheepstache]

I found out my mom got it and am immensely relieved.  She is on a tight budget as it is and there aren't any siblings or other relatives to help so it would fall to me.  Oh and her mother had alzheimer's.  While I wouldn't say you owe it to your kids (obviously there are diverse viewpoints on the parent/child support issue), the peace of mind benefit to them is something to consider.

[bUU]

My impression is that the product is, for lack of a better word, broken. It covers any need for LTC, and the reality is that the need for LTC breaks down very well into the need for LTC due to cognitive impairment and Alzheimer’s disease, and the need for LTC otherwise. Generally, the duration of (and therefore cost attributable to) the latter is much shorter than the former, and so essentially LTC becomes a bipartite insurance pool, where not only those who stay well but also those who need LTC for these "otherwise" reasons are effectively subsidizing the LTC of those with cognitive impairment. That, in itself, is not notable, except for the fact that the cost of LTC for cognitive impairment is so dramatically high. I don't know what the answer is, but as long as cognitive impairment is included with other causes of the need for LTC, then LTC remains, effectively, nothing but "Alzheimer’s insurance".

While there aren't any guarantees in life, there does appear to be some bias with regard to who is more and less likely to develop cognitive impairment (i.e., the presence of hereditary factors), so that's probably going to drive a division in the marketplace between those with those factors and those without, with the former electing LTC and the latter avoiding it, thereby disrupting the balance that may be relied upon in the insurance pool. That'll inspire even more people to consider their own risks, and the cycle repeats, until the insurance pool is very concentrated with those who will much more likely need the coverage, therefore reducing the benefit of it being furnished as insurance. I suspect that there will be (if there isn't already) a black market for genetic testing and such, to help folks decide where they should come down on this. (It needs to be a black market because official records of such testing would generally invalidate applications for coverage.)

My spouse's family has some history of cognitive impairment, but exclusively by marriage (so effectively, no family history), and my family has (absolutely) no history, so we've elected to do without LTC at this time.

[Pollyanna]

My husband and I have LTC insurance policies, we purchased right before turning 50.  We have two sons, and the thought that someday they might have to bathe me was just too much for me to envision.   We do not want to age as a burden to them.  We have budgeted for it and it gives us peace of mind. 

[footenote]

Anyone else use 23andme?  I think this would be interesting to do for myself and might even make a good gift for one or two family members.

Spit take! Just drooled into the tube and packaged up my 23andme saliva sample. I will get results in 6-8 weeks.

For those of you considering it, my experience so far: kit was delivered a few days after ordering. Sample provision process was well documented and internet kit registration was easy. If you do all the optional stuff (I did), it will take you 30 - 45 minutes to complete the entire process.

My motivation: figuring the odds of Parkinson's for me (immediate family member had it) and any other genetic odds I'm not aware of. We have no family history of Alzheimers, so I'll be interested to see what the odds are there. While I would be fine with buying LTC, I agree with bUU: the market appears to be broken and rates can (and usually do) go up dramatically as you age.

Finally: if you are in a state that has a partnership program, you can shelter the same amount of assets as your total LTC coverage. Ex: you buy $300k of LTC coverage. You exhaust the coverage. The state allows you to receive state aid when you have spent down your assets until you have $300k remaining assets. In essence, you don't have to completely beggar yourself to get state aid in the worst case.

Here's Minnesota's Long Term Care Partnership info: http://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=ltcp_consumers

Google your state + "Long Term Care Partnership" to learn if you state participates.

[MrsPete]

I have a couple years 'til I'm 50, and I've just started looking into Long Term Insurance.  I can't claim to have made an exhaustive search, but I haven't found any actual companies that sell this today.  One told me that companies are moving away from these policies because they're not profitable. 

I'm caring for an elderly relative right now, so I have some insight into the elderly's needs . . .  And it's made me think about planning for myself.  In reality, I figure I'll be caring for my husband in his later years -- he's older than I am, and I'm in better health.  But that leaves me on my own.  We're building a retirement house from ourselves now, and we are including things that would make an older person's life easier:  wide hallways that can accommodate a walker, laundry room right next to the closet, open no-barrier shower, etc.  I'm also planning an upstairs that'll be appropriate for one ofpur adult children (or a paid caregiver) to live in.  I'm hoping that these things will make it possible for us to stay in our own home in our later years (perhaps with occasional help with cleaning, etc.) rather than needing a nursing home. 

[brewer12345]

The problem with LTCI has been nicely laid out by Nords.  The industry hasn't figured out how to price it after at least 20 years of active sales and the terms of the policies offered today give the insurer the unilateral right to jack up your premiums if they get the pricing wrong.  Accordingly, premiums are being jacked up like there is no tomorrow.  You also cannot buy lifetime coverage any more.  As such, the LTCI product on the market today insures only a risk I can afford to self insure.

If the industry ever shows up with a single pay or short pay lifetime protection policy, I will be interested.  Until them, I will self insure.

[brewer12345]

Personally: having watched my mom, I'd probably prefer to snuggle up to a 9mm before going down my mom's path... though by the time you need to make that decision, you're probably not able to implement it.

Indeed.  That said, in the unlikely event my wife goes first, I might very well choose to one day shoulder my pack and rifle, head off into the woods, and make it as far as I am able.

[bUU]

As such, the LTCI product on the market today insures only a risk I can afford to self insure.

This is perhaps the best way of putting it, afaic.

[MrsPete]

As such, the LTCI product on the market today insures only a risk I can afford to self insure.

This is perhaps the best way of putting it, afaic.

Yeah, although I am new to this particular search, that's what I've found too.  I'd hoped that I just hadn't hit upon the right answer yet. 

[footenote]

As such, the LTCI product on the market today insures only a risk I can afford to self insure.

This is perhaps the best way of putting it, afaic.

Yeah, although I am new to this particular search, that's what I've found too.  I'd hoped that I just hadn't hit upon the right answer yet.

I have found many companies still writing policies. But it's very sobering to see all the insurers who are "No longer writing policies." I believe it was about 50% when I surveyed insurers who participate in Minnesota's Partnership Program. Having worked in insurance, I know that's a bad sign. 90% certain I'm going to be self-insuring.

[Nords]

Anyone else use 23andme?  I think this would be interesting to do for myself and might even make a good gift for one or two family members.

Absolutely.  Strongly recommended.  My spouse, our daughter, and I did a threefer for our Christmas vacation:
http://the-military-guide.com/2013/03/07/23andme-genetic-testing/

Followup:  One of the reasons we did 23andMe was because of my mother's death from breast cancer (at age 49) and a concern over whether I'd passed any of those genes to our daughter.  It turns out that our daughter has no elevated risk.  A few months ago Angelina Jolie announced a pre-emptive double mastectomy to counteract her own high odds of breast cancer.  Among her genetic concerns was her BRCA-1/BRCA-2 mutation.  Our daughter (the one I had with my spouse, not with Angelina Jolie) read about the news and was able to immediately check her 23andMe profile to verify that she doesn't have any BRCA-1/BRCA-2 concerns.  Otherwise our daughter would have been considerably worried (fueled by the paparazzi) and we probably would have ended up doing 23andMe just to help ease her mind.

[Hadilly]

Good article in the Wall Street Journal about LTC: http://online.wsj.com/article/SB10001424127887323475304578501822156473886.html#articleTabs%3Darticle

[bogart]

I'm in my 40s and DH is in his 60s, and I'd buy it in a heartbeat if I thought it were possible to get a "sensible" policy, but my sense (consistent with what assorted others have described above) is that it's not.  I'm mostly aiming to protect against long-term risks (like dementia), and my sense is that the likely costs of buying and holding a policy for as long as it would take one of us to need it (touch wood) is likely to noticeably exceed the eventual benefits.  Obviously I could be wrong, but in a probablistic sense ... well, I am just not convinced that a policy I, or even DH, could buy today would still be affordable and useful when we needed it.

My seventy-something mother has it, and for that I am grateful.

There does exist (apparently) something called "longevity" insurance that pays out as a monthly annuity once you reach some advanced age (with details varying by policy).  Of course if you don't reach that age, you collect nothing.  This seems to me like it might be a more plausible hedge that could be useful to help in covering costs for some kinds of long-term, ongoing, and hard to dodge (per the bullet-in-mouth comment above) care needs, though, obviously, only if one actually reaches the relevant age and lives beyond it.  As we age, I may look into this for me and/or DH; my understanding is that it's a pretty new product.

[footenote]

Bogart - Check out the WSJ article link in Nords' 23andme blog post. (Highly recommend Nords' blog post regardless to hear about his 23andme experiences.) The WSJ article talks about the annuity option.

For long term health benefits, you can buy an annuity with an LTC rider, or you can simply buy a "pure" life annuity. Unlike "period certain" annuities, a "pure" life annuity will pay out until the annuitant's death.

[bogart]

Bogart - Check out the WSJ article link in Nords' 23andme blog post. ... The WSJ article talks about the annuity option.

For long term health benefits, you can buy an annuity with an LTC rider, or you can simply buy a "pure" life annuity. Unlike "period certain" annuities, a "pure" life annuity will pay out until the annuitant's death.

Thanks.  I did read skim the article but I'll go back and look more closely. 

[footenote]

Received my 23andme results today. I ordered my genetic profile primarily to better understand my risk for disorders that increase the likelihood of needing LTC.

I'm very glad I did because I have significantly below-average risk of contracting Parkinson's or Alzheimer's. These results have been the tipping point for me self-insuring for long term care needs.

(Nords did a far more thorough job detailing the process. I'll just mention that I was very happy with the $99 cost, the process and the way the results are shared.)

[bUU]

The bits of 23andme that make me reticent to consider it are these:

What this means is when you register your kit, you must use your true name.

link

and

GINA does not cover life or disability insurance providers.

link

[footenote]

GINA not covering life or disability insurers does not worry me personally because I'm dropping my private life and disability insurance policies shortly.

You either trust 23andme enough on the security or you don't. ("Your ordering information (shipping address, credit card information, etc.) is stored separately from your genetic data, and connecting the two would require breaching several layers of security.")

bUU, IMO your worries are legitimate. For me, they are on the margins. I was very pleased with the depth of information I received for the price. (Btw, I just highlighted the "majors" that impact my LTC decisions because no one on this forum cares what my BRCA or other factors were. But there is a ton more health-related data than I anticipated.)

The ancestry analysis is still in process - that will be the more enjoyable, hobby-ish treat!

[DocCyane]

My mother went to live in a nursing home 4 years ago and is still there. My father had to do various things to protect their assets.

I remember he had to go down to one vehicle. And he paid it off.

He had to pay off the house.

And he had to put all his assets in an annuity that paid him back over time. He told me that it would take 5 years for them to return all his money. I assume this correlates with the government looking back five years into your financial history to determine what you can contribute before Medicaid kicks in.

The point is that he had a lawyer who specialized in "old people" help him through and preserve his wealth, although he had to sell all his wise investments at the bottom of the market to put them in this annuity, so it wasn't exactly a bargain.

Having seen what my mother is going through (Alzheimer's-like disease), he fully intends to "take a walk in the woods on a cold night" when it's his turn to cash in his chips.

LTC policies will die with the Boomers, as will many things.

[MelodysMustache]

I was a caregiver to my late husband through a ten year illness.  The experience was brutal, both physically and emotionally.  It took 18 months to recover from the physical exhaustion.  Longer still to recover emotionally.

Knowing what I know now I would never put my loved ones (children) through that experience.  I have had LTC insurance for years and I consider it a necessity.

[PapaJoe]

It's worked well for my mom who has Parkinson's.  At 67 she got input from her primary doctor and was referred to a specialist.  Only a specialist can diagnose so we hurried down the LTHC path before it became an existing condition.  We were able to secure it for her and she made roughly 5 years of payments which unlocked 425K of lifetime benefits once she qualified for the benefit period.  In the first years of the benefit period she was having to pay $300 out of pocket for full nursing care in a home.  Since we are in yr 4 of the benefit period, rates have increased and she's now paying $1200 out of pocket.  Bottomline the LTHC policy has been a godsend and we would not have been remotely able to get the same quality of care for her without it.

A year back my employer and my wife's both told us they were cancelling LTHC as an available option on the group benefits menu.  We investigated both and chose to sign up for  John Hancock and are currently paying $92 per month for both via payroll deduction.  I believe it may even be pretax but not certain.  This will give each of us 475K of lifetime benefits and at the 3 year point we will be given the option to purchase an inflation rider that will increase the daily, monthly, and lifetime benefits for an increased monthly fee.  Given the rise in med costs, I am leaning towards it.

[bUU]

You either trust 23andme enough on the security or you don't. ("Your ordering information (shipping address, credit card information, etc.) is stored separately from your genetic data, and connecting the two would require breaching several layers of security.")

Or a court order to breach those layers, or changes to the law that I cannot foresee that would breach those layers.

[footenote]

As I said, I perceive your concerns to be legit. They are just into the "What if... what if..." margins for me personally.

[bUU]

Isn't that the very nature of LTC, itself? "What if...?"

And I'm not sure which is more likely to be of concern.

[Nords]

Having seen what my mother is going through (Alzheimer's-like disease), he fully intends to "take a walk in the woods on a cold night" when it's his turn to cash in his chips.

My spouse has the same plan for me, involving a longboard and paddling out into the biggest swells she can find. 

Kidding aside (I hope), it's worth spending an hour or two of your life reading David Hilfiker's blog:  http://davidhilfiker.blogspot.com/  He's at least a year into Alzheimer's and has no intention of euthanizing himself.  He's a doctor with access to all the good stuff, and he's not necessarily against the idea, but his point is that he just doesn't fear his descent into end stage.  This may be a common aspect of the disease, not just rationalizing.

Alzheimer's is far more brutal on the caregivers than on the patient.

The bits of 23andme that make me reticent to consider it are these:

I suspect that you'd be able to find a doctor or another genotyping company willing to preserve your anonymity for the test.  For example, Brian Sykes does extensive genotyping for his research, and he usually has to preserve the anonymity of his subject even when he's not doing double-blind control experiments:  http://en.wikipedia.org/wiki/The_Seven_Daughters_of_Eve

I'm just not sure that you'd get it for $99, and I'm positive that you wouldn't get the same database access that 23andMe shares with its customers.

[allisonmichaels]

I'm in my early 40's, married, I have 2 children and I have family history of Alzheimer's. There is no early onset and of course I'm still hoping that I will be spared from this condition. As early as now I'm already planning for long term care [Moderator Edit:  Link Removed]. I know how hard it is to take care of a person with Alzheimer's and I don't want my family to experience that. I want to spare them from the burden of taking care of me and instead just hire a skilled caregiver to take care of me. It's too risky to brave the future without coverage and just rely on savings and assets. So for me, it's imperative to plan and purchase early if you have family history or you will most likely need extended care in the future. With the cost of long-term care increasing each year, buying insurance is your safest bet to afford quality long term care.

[Nords]

So for me, it's imperative to plan and purchase early if you have family history or you will most likely need extended care in the future. With the cost of long-term care increasing each year, buying insurance is your safest bet to afford quality long term care.

I think the debate is more about the value of long-term care insurance rather than the necessity.

We all agree that we'd like to have long-term care insurance.  We're just not sure how much we're willing to pay for it.

Your last sentence reads like a marketing brochure from John Hancock, and I mean that literally because my father's long-term care insurance policy came with marketing brochures from John Hancock.  Long-term care insurance is absolutely inappropriate for those who would have to deplete their retirement assets (and adversely impact their retirement lifestyle) to pay for the coverage.

[bUU]

I think the debate is more about the value of long-term care insurance rather than the necessity.

Precisely. The reality is that people need LTC insurance that costs less than currently-available plans cost, so their need is infeasible. Paying more makes LTC insurance, specifically, not what people need.

[dodojojo]

A branch of this topic:

I'm single so I'm not worried about having the long term care cost of a spouse exhausting funds.  I will however be taking care of my mother.  If I support her financially and if in a few years, she is living with me, will the government and/or care facility go after me to pay for her long term care?  She has no assets and savings of her own.  Alone, she would easily qualify for almost every single government assistance program based on income (she has and will have very little).

Of course should the need arise, I would pay for long term for my mother but it would result in exhausting my modest investments.

She is currently healthy and in her early 60's.  Should I consider insurance for her?  Or based on her poverty level, gamble on Medicaid?

[nawhite]

I broke out a discussion of 23andMe into another thread to keep this one on topic: https://forum.mrmoneymustache.com/welcome-to-the-forum/23andme-gene-sequencing/

[bogart]

A branch of this topic:

I'm single so I'm not worried about having the long term care cost of a spouse exhausting funds.  I will however be taking care of my mother.  If I support her financially and if in a few years, she is living with me, will the government and/or care facility go after me to pay for her long term care?  She has no assets and savings of her own.  Alone, she would easily qualify for almost every single government assistance program based on income (she has and will have very little).

Of course should the need arise, I would pay for long term for my mother but it would result in exhausting my modest investments.

She is currently healthy and in her early 60's.  Should I consider insurance for her?  Or based on her poverty level, gamble on Medicaid?

Your being willing/available to help your mother financially and otherwise will not affect her ability to qualify for assistance programs (unless the law changes significantly between now and then, not likely).  Financially, the best bet is clearly to gamble on Medicaid.  The issue there is that that will limit the choices available to her (and to you, for her, if you are in the position of being the decision-maker).  Also, medicaid eligibility for day-to-day living requires fairly severe and/or ongoing medical problems, so you may land in situations where you need short-term or non-acute help but have no assistance to pay for it (this can also be a problem with LTCI, depending on the policy).

I'd recommend pricing what LTCI insurance would cost for her, and discussing with her her goals, more generally, for her living situation as she ages (assuming this is a topic she is willing to broach).  Your community may have elder-care resources (e.g. brochures, social workers) available that could give you a general sense of what kinds of community resources are available.  Gather information and then figure out what the best decision for you and her with the resources available is.

Be aware that (if she is eligible, as most Americans are) your mom will need to make decisions about and sign up for Medicare and related policies pretty promptly right around age 65 (unless she is still covered by employer insurance because she is working, I think -- but even that is something to check on).  There's a narrow window there, and if she misses it, what's available becomes more expensive (basically the system is structured to get the "young" elderly to buy in).

[fallstoclimb]

The only 2 cents I have to add is that I am currently researching dual-eligibles for my job.  A significant amount of people "spend down" to Medicaid eligibility, which means they are on Medicare, have a health crises and have to go to a non-skilled nursing facility which is not covered by Medicare, then spend down all their assets to pay for the non-skilled nursing facility until they get to the point where Medicaid kicks in.  It's not ideal. 

My other cent is there was just a study about how in the future (20 years?) there's going to be a severe, demographic limitation on the number of Americans available to care for the aged Americans who need care.  Something like 3 people of working age in the country for every 1 person needing care.  Sorry I don't remember the exact numbers.  The focus on this study was more about family care but I can only assume it will also result in professional caretakers also being very limited.  So.  The whole situation is kind of concerning! 

[prof61820]

A five year LTCP - rather than a lifetime benefits policy - will be less expensive and give you a good window to prepare for the medicaid look back period.  I'm not sure how many insurance companies offer this coverage, however.

[electriceagle]

I think that you should. Remember, there are so many things that you should consider before you buy a long-term care insurance. (1.) You and your wife are 50+ and investing now will allow you to have an idle time before you start using LTCi. (2.) There are ways to at least reduce LTC cost with the simplest being able to purchase it as early as possible and/or shared insurance policy with your wife. (3.) Your mom's wife is having health issues and I think it is best if you consider the fact...for, you know, your wife can have those too.

So, people from the long term care insurance industry actively seek out online discussions involving their class of products and comment on them?

[dude]

I think that you should. Remember, there are so many things that you should consider before you buy a long-term care insurance. (1.) You and your wife are 50+ and investing now will allow you to have an idle time before you start using LTCi. (2.) There are ways to at least reduce LTC cost with the simplest being able to purchase it as early as possible and/or shared insurance policy with your wife. (3.) Your mom's wife is having health issues and I think it is best if you consider the fact...for, you know, your wife can have those too.

So, people from the long term care insurance industry actively seek out online discussions involving their class of products and comment on them?

Ha!  Good catch, though she wasn't exactly hiding it.  I'm fortunate to have Federal Long Term Care Insurance.  Been paying for a couple years now (started at @ 44).  Premiums are reasonable thus far at $47/month.  Hoping the long-term viability of this plan, given the number of Fed employees and OPM's ability to negotiate, is good.  We'll see.

[iris lily]

Is there another way to handle the situation above? I've wondered if it would be better for us to get divorced if this happens to us. I think it's terrible for the nursing home industrial complex to leave a spouse with absolutely nothing.

They don't leave you with "absolutely nothing;" the last time I researched it, spouse was able to keep home and $80,000. Plus any pension, of course.

But in our case I'm the one what will come down with Alzheimer's and my pension is the bigger one, and besides we've got a lot of assets, so I don't think it's fair to deprive DH of our assets.

So yeah, my plan is divorce.

[Bob W]

One should only consider themselves FI if --  (this may shock some of you who consider yourselves FI)

A.  They have great LTCI  and assets to live on.

or

B.  They have investments generating around 120,000 per person per year to cover nursing home costs. 

Double that for married couples to around 6 mill in investments.  I think around 70% of people will eventually need nursing care. 

It would seem that the LTCI, even at a high premium would be substantially easier that amassing a great deal more wealth. 

That said,  I currently have none and I understand it is hard to come by and sticker shock pricy at my age. 

Anyone see a C option?  I would love a legal and good C option? 

[Nords]

Anyone see a C option?  I would love a legal and good C option?

After a few years of reading Bob DeMarco's Alzheimer's Reading Room, I've realized that there are people (and caregivers) who would rather be cared for (and provide the care) at home than at a facility. 

It's certainly a stressful life for the caregiver, and it's not cheap (considering home health aides & respite care) but it's a lot more affordable than LTCI or having a gazillion dollars in savings. 

Personally I think a facility is a much better idea for socializing and for all the different types of daily therapy (and much less stressful on the caregivers) but either not everyone wants to be there, or they may have behavioral problems preventing them from being there.

One of our local care facilities runs a neighborhood shuttle for shopping, doctor's appointments, and other excursions.  For some reason the shuttle driver was on our street and turned around in our cul-de-sac.  My spouse recognized the logo on the shuttle and said "Wow, honey, when the time comes it looks like I can even have them pick you up!"