Long Term Care Insurance - is it worth buying?

Excerpt From NPR Family Matters series:

Long-Term-Care Insurance: Who Needs It?

by MARILYN GEEWAX

Is it worth buying?

"Experts say the insurance can be a huge help, especially for people without children and relatively small retirement savings. But it's far from a perfect solution to all problems. For example, a policy typically covers three years of care, but many people live long beyond that cap. And the new policies are being written with more restrictions to limit insurers' risks.

Whether it makes sense to spend so much money on premiums, rather than focus on building up a retirement savings account, is a complicated equation that requires serious study."

Note:  "...especially for people without children and relatively small retirement savings."

Insurance is, after all, a form of gambling.  You are betting that you will get sick enough to need the policy.  The House is betting you won't need more than you have paid in.  But you can also look at it as a risk mitigation strategy.  Ask yourself the following questions:

"If I do not have the coverage, and do need substantial long term care, will I have enough resources to cover the cost of the care and still be comfortable?"  Answer:  Yes.  Action: Don't buy coverage.  Answer:  No.  Action: Buy it.  Answer:  Maybe - Weeeeeeeelll, the decision becomes very personal, and relates to your comfort level with the probability of your remaining in long term care facilities longer than you can afford.  

If, at the beginning of your long term care needs, you have sufficient resources to cover the likely costs, then LTC Insurance may only be worth it if you want to retain assets to pass on to someone.  On the other hand, if at the beginning of your needs you will not, then LTC might keep you out of medicaid a bit longer.  But, if you have no retirement kitty, Medicaid may be inevitable.

But if the probability of needing LTC for a long period at all is iffy, and you are comfortable with the gamble that you will not need it (in other words, you can live with the outcome if you are wrong), then why gamble?

Here is one "why":  I am a male.  I will not (likely) live as long as my spousie (we are not a same sex unit).  So, If I think I will need LTC for a long time before passing on to that elder hostel in the sky (or wherever), and during my needs we will have spent our wad, then there will be less or little for my spousie to sustain her in elderhood.   How's she gonna attract that second husband without some bait money? 

Experts don't agree (see the WSJ 5/13 "Should you purchase long term care insurance).  Friends will disagree.  Hell, there are times when I disagree with myself.  My advice would be, pick your strategy, periodically re-assess the ongoing costs (not the sunk costs you have already incurred - they are irrelevant), and then go have a glass of wine and relax.  With my luck, I will live to 108 and then die suddenly while falling off a bar stool in the Candy Store as I check out the booty of that new hot server that Stephan just hired. 

What a way to go!

Michael

PS, there will be one more post on this subject concerning a strategic decision that could result in a resounding "NO" to LTC Insurance.  Research is pending.  Then, enough already.  We have other things to talk about.

A few words on fitness for the kid-less.

Staying fit as you eld seems to be a good strategy regardless of whether or not you have children.  Under any circumstance, why would you want to become that immobile, vacant, dependent, Depends-dent person in front of the window watching the squirrels all day.  There isn't much point in spending a lot of time on the subject of fitness in this blog as it has been well covered elsewhere.

However, since this is in part a manual for our personal adventure in elditude, we will make note of a couple of interesting things we heard the other day in a talk by Dr. Richard Besdine, Director of the Center for Gerontology & Healthcare Research at Brown University, speaking at the Redwood Library, titled "Fit at 50, Sexy at 70".  Works for me.

- Behavior patterns are more important than genetics and the environment on maintaining good health as we age.  Form healthy behavior habits.
-Blood pressure - eat right, exercise and treat when necessary.
-Exercise - make it fun.  If it is fun you will develop a habit of doing it (remember "Habit"?).  Also, the French Paradox has nothing to do with wine.  It results from using public transportation, which results in more walking, which is good exercise.
-Smoking - STOP IT!
-Drive safely, or don't drive.  Move to a place with good public transportation.  Like Paris!
-Immunizations - get 'em.  Flu, pneumonia, shingles, etc.
-Pills - don't overdo it.  Make sure your Dr. knows what you are taking.  Most dietary supplements don't do any harm, but don't do much if any good.  Ginco can be bad for bleeding.
-Calcium - take it.  Both men and women need it.  With vitamin D.  50% of women in norther climates have vitamin D deficiency.
-Aspirin - not sure.  Mixed benefits.  Jury is still out.
-Environment - clean it up.  remove toxins, get fire alarms.
-Guns - get rid of 'em.  The odds of being shot by your own gun is 10x higher than the odds of you shooting someone else.  Also, a common occurrence: wife dies, husband is depressed, drinks, shoots self.  There is a reason why the NRA is opposed to DR's even asking if you have a gun (it is illegal in some states).  They know it is a risk factor, and don't want you to know it.
-Screening - colonoscopy, mammograms.  PSA is controversial.  Test over age 70 does not improve survival.
-Booze - tolerance declines with age.  Same amount drunk results in more alcohol in blood stream.
-Oral Health - not covered by Medicare.  Brush.
-Osteoporosis - See calcium above.  1,500mg/day, plus 800u Vitamin D/day.
-Falls - Elder women have worse balance than elder men.  Falls compound the osteo problem (fragile bones).  Yoga, Tai Chi are great for improving balance.  Falls cause anxiety, which carries over into all aspects of life.  Wear good shoes, maintain strength (resistance training, not just cardio), watch vision closely.
-Emotional Health - you can train yourself to be happy (Habit!).  Strive to reduce stress.
-Social networks - social people live longer.  Friends count.
-Sex -  Need I say more?
-Sleep - Treat discomfort factors.  Limit caffeine, it stays in the blood stream longer as we age.  Best treatment for insomnia is a warm drink, a dark room, soft music and a back rub.  See Sex above.
-Dementia/Alzheimer's - limit risk by exercise, diet, use your brain (do puzzles, learn a language, keep working, interact with surroundings).  Don't box or play football.
-Advanced Directives - you need these at the time of admission to a medical facility.  Make sure someone, everyone, knows what you want to happen.  Most elders are not afraid to talk about it, so listen to them/us.  I plan to have mine tattoo'd on my chest.
-Sex - Did I mention this?

Any other ideas?  I am especially interested in how to make your advanced directives heard.  How does the ambulance EMT know that you do not want to be resuscitated?  Do you even want an EMT to make that decision?  Short of having them tattoo'd on your chest, how do you make your wishes know when you are alone, without family to represent you?  Please let me know what you think.

Michael

Long Term Care Cost Update

Here is an update on the average costs of various elder services.  This may be redundant with earlier posts.

These are, of course, averages.  As you all know, total actual costs incurred are dependent on the intensity of use of these services.  Fortunately, all of our friends of a certain age are ALL very fit, mentally active, and will no doubt not need these services much, if ever.  Right.

The state by state comparison link is pretty interesting.  Where do YOU want to retire?  Or, where can you best AFORD to retire.  Maybe matching up availability of services and life-style features with costs would be an interesting exercise.

Michael

The Cost Of Elder Care

Adults have been providing an increasing percentage of financial assistance to their parents in recent years. Below are the national average annual costs and daily rates paid for various types of adult care.

Type	Average	Annual
Nursing home: semi-private room	$214/day	$78,110
Nursing home: private room	$239/day	$87,235
Assisted living	$3,477/month	$41,724
Home care: home health aide	$21/hour	$21,840
Home care: homemaker	$19/hour	$19,760
Adult day services	$70/day	$18,200
A state-by-state comparison

Source: MetLife 2011 Market Survey of Long-Term Care Costs