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we were going to self insure . but when money magazine did a story on us years ago , where they wanted their team of pro's to go head to head against my own planning , they were against self insuring .
they were right ! you need to have many many millions to be unaffected self insuring .
we can never be the same as an insurer . ltc insurance is partially funded by those who die or drop out or don't need it . we lose that aspect of funding . trying to self insure becomes the most costliest way .
to self insure you really would need to take a few hundred thousand dollars and separate it from the money you typically invest for income in retirement , because you cannot count that money in your portfolio for income creation .
you can't count it because a safe withdrawal rate assumes you could spend that money down to 1 dollar and still be 100% successful .
you need to protect that insurance money and that means very low safe return . you may need that money early on . when my co-worker had a stroke and was paralyzed at age 55 , it really opened my eyes to how devastating these bills can be and it can happen at any point ..
the pro's at money magazine showed us how just keeping that money invested normally like we always do , could pay the premium on a real policy and have much more left over .
they were right .
in fact my estate / elder law attorney says the bulk of his clients are the so called self insurers .
they basically dd nothing special other than call it self insuring . now that they got punched in the face , the stay at home spouse realizes that they can be easily impoverished .
so now they are scrambling for help .
also our partnership LTC policy has a special version of medicaid pick up the tab after the 3 years insurance runs out for a snf or 6 years in home care and all our assets are protected 100% . no look back , no spend down , nothing . plus the stay at home spouse has no limits on income if medicaid picks up the bills .
you can never have that self insuring .
next to trying to self insure , the 2nd most costliest way is these hybrid life insurance policies that try to fill both rolls . they sucker people in because they promise to pay out a death benefit .
but that benefit comes with a heavy price . they keep all the interest you earn over decades and every time rates rise you just got a premium increase . the interest over time can be way more than you paid in . they can be very very costly to try to insure with plus they usually lack things like inflation adjusting and low pay out rates .
I believe the average LTC policy covers about $150/day for 3 years (with inflation adjustments).Given the current pressures on companies that provide coverage, it is becoming more difficult to get much more robust coverage. That would put the total maximum benefit at just over $160k, so that would be the minimal amount a self insured person would want to put aside, separate from other retirement savings, to have similar “coverage” to an insured person. Of course, those with LTC insurance and self insured people, have additional risk that costs will be higher and that some of their retirement funds will be needed for those expenses.
not here , that would never work . our area is 350-400 a day and increases yearly. we took 350 a day as a starting point four years ago . we get a 5% increase every year in coverage automatically . so far no premium increases after the initial increase 4 years ago . just got our bill for 2019 last month and it was the same .
however we did not buy it for the 3 years coverage . we bought it for the perks once the insurance runs out . we have 100% asset and income protection .
while almost all states offer partnership plans today most work a dollar for a dollar as far as protection . if medicaid spends 500k on your care then 500k in assets is protected . we have unlimited asset protection with our plan and most important the stay at home spouses income level is protected . . a spouse can be forced to live at impoverished levels here if medicaid ends up being needed . so no restrictions are a biggie
not here , that would never work . our area is 350-400 a day and increases yearly. we took 350 , but that was a few years ago . we get a 5% increase every year in coverage automatically . so far no premium increases after the initial increase 4 years ago . just got our bill for 2019 last month and it was the same .
The $150/day is based on an average quoted by the American Association for Long-Term Care Insurance. Many areas, such as your area, are obviously higher. Everyone has to do the math for their situation. My mother lives in Illinois and the facilities in her area are below the current averages. Unfortunately, her latest premium just went up by 60%.
many older policies were greatly under priced based on old inaccurate statistics about use . what she really had for years was a big discount thanks to the statistics out there being off base .
insurers priced policies based on a lot of wrong data about older people a generation behind in different times .
loads of people like my dad could not afford a snf but needed one so typically healthcare workers take one or two in like my dad and care for them 24/7 .
there were so many like this that were off the radar that they were never figured .
many of us learned from our own parents that we can't really care for them ourselves . so it does not happen as much as it once did . that is not reflected yet either in any numbers .
how it typically played out is a family member gets hurt trying to move 200 lbs of limp flesh if they are moving someone paralyzed from a stroke and they are both in trouble or the person becomes violent with memory issues and someone gets hurt ...
the best way to bust up a family is have one sibling step up to the plate and take in a parent who needs care . odds are the other siblings step back and the battles begin .
usually the person providing the care takes a monetary hit , a career hit , a social hit and maybe even loses a job .
if you have a spouse odds are you can kiss that marriage good bye once the spouse starts on why do we have to do it and sacrifice so much and your brothers and sisters do nothing .
one of the worst things parents can do to their kids is drop their long term care burden on their children .
According to a 2016 report from the National Association of Insurance Commissioners for people turning age 65 in 2015-2019: these figures are in today's dollars and escalate yearly . they also don't consider that those with insurance tend to use it so usage and expenses can be higher then projected .
48% are expected to have no long-term care costs during their lifetimes,
15.4% will have costs of up to $50,000 in today's dollars ,
9.7% will have costs of $50,000-$100,000,
11.7% will have costs of $100,000-$250,000, and
15.2% will have costs that exceed $250,000.
Last edited by mathjak107; 12-28-2018 at 05:11 AM..
many older policies were greatly under priced based on old inaccurate statistics about use . what she really had for years was a big discount thanks to the statistics out there being off base .k
insurers priced policies based on a lot of wrong data about older people a generation behind in different times .
loads of people like my dad could not afford a snf but needed one so typically healthcare workers take one or two in like my dad and care for them 24/7 .
there were so many like this that were off the radar that they were never figured .
many of us learned from our own parents that we can't really care for them ourselves . so it does not happen as much as it once did . that is not reflected yet either in any numbers .
how it typically played out is a family member gets hurt trying to move 200 lbs of limp flesh if they are moving someone paralyzed from a stroke and they are both in trouble or the person becomes violent with memory issues and someone gets hurt ...
the best way to bust up a family is have one sibling step up to the plate and take in a parent who needs care . odds are the other siblings step back and the battles begin .
usually the person providing the care takes a monetary hit , a career hit , a social hit and maybe even loses a job .
if you have a spouse odds are you can kiss that marriage good bye once the spouse starts on why do we have to do it and sacrifice so much and your brothers and sisters do nothing .
one of the worst things parents can do to their kids is drop their long term care burden on their children .
According to a 2016 report from the National Association of Insurance Commissioners for people turning age 65 in 2015-2019: these figures are in today's dollars and escalate yearly . they also don't consider that those with insurance tend to use it so usage and expenses can be higher then projected .
48% are expected to have no long-term care costs during their lifetimes,
15.4% will have costs of up to $50,000 in today's dollars ,
9.7% will have costs of $50,000-$100,000,
11.7% will have costs of $100,000-$250,000, and
15.2% will have costs that exceed $250,000.
There is also the question as to the sustainability of insurance companies that offer these policies:
While there is probably not much to fear for those that are currently retired, it could be a concern for those in the next generation of retirees that are currently in the planning stages. Rising healthcare costs will continue to add more pressure to a problematic situation.
they can sustain them as long as premiums match usage and costs . but if premiums rise it means costs and usage are rising . that can mean the odds of needing the policy increases too along with costs of self insuring .
they can sustain them as long as premiums match usage and costs . but if premiums rise it means costs and usage are rising . that can mean the odds of needing the policy increases too along with costs of self insuring .
Given the current trends, future retirees need to consider a much robust budget to cover LTC expenses regardless of the path they choose. I also fear (personal opinion) that some insurance companies might end up defaulting if things get worse.
i would worry about us personally going under before insurers do . even 2008 couldn't take down insurers . aig's insurance division was never at risk .
i think we are going to see lots of failures when it comes to the so called self insurers who did nothing to self insure other then call it that and keeping their fingers crosssed
But, as with anything, the video I posted out shows what's possible.
IMO, that's an argument for a 100% free market approach. People need an immediate, direct, in-your-face connection between their diet and lifestyle and the cost of health care. Insurance, especially when it pays for most of the up front costs of many things, whether government sponsored or private, removes that direct incentive.
Unfortunately, I think it's just a question of time before large numbers of people end up curling up and dying anyway with all the debt we're accruing paying for health care (among other things). Of course, nobody thinks that can happen until it does. People just won't look for alternatives until there's a crisis and at the rate we're going there will be one--many, I think. I wish human nature was different, but we're a crisis oriented species.
As a healthcare worker for 20 years, I can tell you I have seen the effects of our diet get worse and worse. Diabetes is a legit epidemic now. We used to have maybe 1 out of 20 patients who get dialysis, now it's at least 3 or 4 times that (hugely expensive, they go 3 times a week for the rest of their lives, often paid by Medicaid and Medicare ((meaning we pay). Dialysis is a CASH COW for the owners of these facilities though. There is an incentive to keep us fat and unhealthy and a lot of people making money from it.
Even kids are getting type II now, which used to be almost unheard of. More and more kids, yes KIDS are on blood pressure pills and cholesterol lowering drugs, too. Treating these diseases for these kids throughout their lives dwarfs what serving them healthy meals would. I have also often thought food stamps should have an added stipend that can only be used for fresh fruits and vegetables. I find it very unfortunate that whole grain/high fiber items cost so much more than white flour items, I think subsidies for high fiber grains to bring down the cost for low income folks would be much better spent then the corn subsidies we have now. Why they subsidize something that ends up in our food as high fructose corn syrup most often, just shows how it's really about money. Give the Quinoa people some, and maybe one day bring down massive health care costs.
The nursing homes I work in don't help. They serve horrible food in terms of nutritional quality. I think there should be standards for schools and also health care facilities.
Given the current trends, future retirees need to consider a much robust budget to cover LTC expenses regardless of the path they choose. I also fear (personal opinion) that some insurance companies might end up defaulting if things get worse.
That could definitely happen. It is happening right now in Paradise, California with the insurer who many of the residents had homeowners with declaring bankruptcy right after the fire. Of course it's guaranteed, but if that happens with a company with policies across the country, or many companies, that will hurt all of us even more.
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