She died in 1991, so it would have been in 1989 or 1990. She didn’t survive long on the Medicaid.
This thread reinforces our decision to take out long term care (LTC) insurance years ago. I don’t want my kids to be in this situation.
In the past, some couples would actually get divorced in order to protect assets. It seems that this is no longer common due to Spousal Impoverishment Rules. I am by no means able to speak on how this works, but I did find some information. But not sure if this also applies to VA programs or not.
I would advise everyone to research that very carefully.
LTC insurance, annuities, and reverse mortgages are often targeted at older people who are rather fearful and don’t have a lot of financial experience.
They often have very high expenses and may not be the best use of your assets.
It’s the federal version of LTC. Runs about $100/mo for each of us. It’s only meant to defray costs, not cover it all. We have a sizeable nest egg to take care of what’s not covered .
Thank you, that link is very informative, and at least gives me the ability to speak with a professional and have an idea of what I’m talking about. I have my dad asking amongst his church friends to see if anyone has a recommendation for a good attorney in this field.
Once you know some of the terminology, you can continue searching for more information. In addition, you might want to try reaching out to veteran associations, they probably know of a few good people who are knowledgeable in how the VA works and are more than happy to help you.
Not familiar with that. Could you give us a link?
In a telling comment on the general state of the LTC industry, the home page of @Chefguy’s cite says the federal employee LTC system was closed to new entrants effective Dec 2022 = almost 2 years ago. Further, existing enrollees can’t increase their coverage. Which is a standard feature of private policies to account for the non-trivial inflation rate of LT care. So what coverage is in effect is effectively shrinking every year as LT care cost inflation eats away at the purchasing power of current fixed-benefit policies.
The notice does say this closure expires every 2 years unless renewed. So come Dec 2024 the system will re-open unless the closure is extended. Decent bet that the closure will be “temporarily” renewed until 2026. And thus are cans of worms kicked down roads.
As a person who has steadfastly refused to buy life insurance over the decades, this was not an easy choice. But the idea of sticking my heirs with the cost was less appealing than dealing with the insurance industry. I have medical insurance to be envied by most. I’ve never paid a copayment since retiring, other than a token amount for meds, because of my military medical coverage combined with Medicare. I had a knee replacement a year ago that didn’t cost me a nickel. Most people don’t have anything approaching this and I’m grateful for it. The less I burden anyone, the happier I am.
They don’t make it easier to age, do they?
Sad commentary.
A society should always care for the young, elder and infirmed.
Good luck for you and your Mom.
Yeah, getting old ain’t for sissies 
And my wife and I are approaching that. This has definitely been a learning experience, but what I’ve learned should help us when we get to this stage, so my daughter will have a pretty clear path.
In essence LTC is a form of insurance on part of your estate.
Up front you pay premuims now that would otherwise be sitting in your portfolio growing your assets. So you have more insurance but are incrementally poorer every day for the rest of your life.
There are basically 4 possible outcomes:
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If you die w little infirmity, the premiums are wasted. You lose them and the umpteen years of income / growth that money would have generated in your portfolio.
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If you die after some infirmity you’ll consume some of your LTC benefits to offset the premiums paid and assets foregone. You’re still net negative on the deal, but not so bad.
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If you die after lots of infirmity you’ll draw benefits equal or exceeding your premiums and growth foregone. Now you’re making a profit.
In all the above cases your infirmity doesn’t hit your assets. -
If you die after mongo infirmity, the lifetime policy max is hit somewhere along the way and it quits paying out. You made out well and your benefits received significantly exceed premiums paid and the opportunity cost on that money. After that point you are spending your estate = your kids’ inheritance on your care. But you / they are better off for the up-front blob of expense that the insurance shouldered.
Depending on the size of your estate and how high your policy limits are, you may be insuring most of your estate or only a few percent. For most people w LTC the insured estate percentage isn’t that high:10-20%. Because past that point the price of more insurance become prohibitive for folks who’re that amount of wealthy. IOW, if you could afford 2x the insurance you’d probably be ~2x as wealthy too.
Tbe vast majority of people with LTC will die in condition 1 or 2 above. But the whole reason anyone buys any kind of insurance is to cover for the unlikely but plausible outcome of being the unlucky bastard stuck in case 3 or worse, 4.
I’ll also point out that most LTC has 2 limits: lifetime and daily. Once you use up lifetime it’s done, period. As described above.
The daily limit is more subtle. They’ll only pay that much per day for each and every day of care. No skipping care on Tue & Thu so you can have them pay 2x for expensive home care on just Mon & Wed.
If your actual care bill is more than the max on any day, much less every day, the excess is all on you / your assets / the kid’s inheritance. Which depletion might start from your very first day in care if the policy is small and the care is very costly.
So someone with a low benefits policy in an expensive situation could find themsves in case 2, not getting full value from the policy and paying OOP for some, not all of their LT care. Thereby depleting some of their assets earmarked for their spouse or heirs.
I personally have LTC coverage for about 15% of my net worth. It was probably a wise decision when bought, but is probably a waste of money now. But I could never get it back if I dropped it and tried to get it again. I’m “protecting my investment” in prior premiums by throwing more money on the bonfire every month. Smart? Highly debatable. Do I sleep better at night? Maybe a smidgen.
The real problem is the people of modest means who need the coverage to avoid being wards of the state are exactly the people who cannot possibly afford any coverage much less full coverage. It’s definitely an upper-middle or higher- class problem / product.