Life insurance companies are making money because there is a cost associated with it (either indirectly through a reduction in death benefit or increased premiums).
Also, all that’s happening is you’re getting monthly payments that you wouldve received had you passed away. It’s essentially a small upfront payment of your death benefit. And if you can’t do 2 do the 6 ADLs, historically there isnt a 20 year life span either.
Im sure the life insurance companies have done the calculations. The benefit to the client is they dont have to liquidate assets to pay for care and then wait to collect the insurance until after the insured dies. These payments help prevent forced liquidations.
As stated, I dont sell life insurance (I dont sell any financial products) so people should talk to their own financial consultants to determine if these products are appropriate for them.
It varies, but for ease of math, assume it costs $10k out of pocket per month for skilled nursing. That’s $120k per year. The CNAs are not salaried, probably make around $15/hr, depending on the location. I don’t remember the exact rules about staffing, but found this reference:
California requires 3.5 hours of nursing per patient per day. It is common for CNAs to have 10 plus patients at a time, iirc. There are actual RNs on staff, but they are mainly in charge of meds and supervision of staff. The food is institutional. So, yeah, that’s how the industry makes its money.
I don’t disagree. I would never ever ever put someone I love in skilled nursing if I could help it. Thing is, quality in home care through an agency in my area is $32+ per hour. It is truly a luxury few can afford.
That’s the Sophie’s choice- low level care or cost-prohibitive care.
My mother had one of the old/cheap/good LTC policies. When she started Hospice, I did not try to start home care because she did not yet meet 2 of the 6 criteria. Once I finally called, it seemed super easy to invoke by phone, no physical (maybe helped by Covid situation?). It turned out that we only had one nurse visit before she died, and I did not process the claim. No regrets that she had the LTC policy - she had limited resources (Section 8 housing), and it gave her tremendous peace of mind. But… the current LTC policies are supposedly not as good and they cost a lot more.
It does sound to me like Medicaid Trusts are probably legal if done correctly but very questionable ethically. The whole point of Medicaid is to pay for people who don’t have the funds, not people who have the funds but have given it to the kids just in case they need to go into a nursing home.
I think there are a lot of questionable lawyers doing trusts generally. Years ago, I decided that I wanted to set up a trust that as one of its properties increased the protection of my assets. I started to read about asset protection (books, internet) and calling lawyers who claimed to specialize in it. It became clear that there were a lot of people selling schemes that sounded good on paper but had failed in the courts or would likely fail.
Agreed, but consider that these trusts require people to divest themselves almost entirely of all their assets at least 5 years before they may require nursing home care that accepts Medicaid. Payment for living expenses and the conservation and investment of all your former assets are now in the hands of the trustee(s) regardless of whether you ever go into a nursing home. Wealthy people are not going to do this.
For accuracy’s sake, in California it is 30 months, not 5 years, but the point is correct. The MAY is the key word there. Even non-wealthy folks balk at handing over all of their assets to someone else, even to the most trustworthy of kids. It is an autonomy thing.
Fact is, the average stay in skilled nursing is measured in months, not years. Medicaid doesn’t apply to assisted living, or most in home care. There are some programs in place that are changing this analysis (the PACE program in California) but pretty much most people are on their own.
A friend is currently paying $35/hour in Boston for home care for her mother. When I hired aides four years ago for my mother in the NYC suburbs, the cost was $25-$27/hour. It adds up quickly if 24 hour care is needed.
I handled all of the paperwork for both of my parents . To say it wasn’t easy to get them approved was an understatement. Actually, I will rephrase that. It wasn’t all that difficult to have them approved, but it was a real hassle to submit the paperwork to satisfy the 100 day elimination period.
I don’t know if all policies operate this way, but we had to provide proof of licensed care for 100 days before the LTC carrier would pay anything. Once the elimination period was satisfied, filing claims was fairly easy. My parents had fantastic benefits at low premiums, neither of which would be offered today.
It’s a tricky decision. I think LTC can be a huge benefit for those who cannot afford to self-insure and do not want to spend down all assets to leave second spouse without any resources.
Yes, definitely a tough one. The numbers vary a lot by region but in my area cost is more like 14-16 at high end places (and some are higher). I don’t think it makes sense to get into hypothetical numbers. That’s something for the owners of the facilities.
Homes aides is the way to go esp for someone who has enough $. The issue often is, the elderly are put in homes because there is no one to take care of small things or they don’t have close relatives nearby in case of emergency.
Agree with your last line. Even when someone lives in an assisted living facility, there are functions the staff cannot handle so it is essential to have an involved relative nearby.
My in laws chose to go into an assisted living facility because my FIL slept in a recliner in a living area at one end of the house, and my MIL slept in their bedroom at the other end. She couldn’t hear him if he needed her. Neither wanted people in their home 24/7, and neither wanted to live with their kids (neither of whom have homes with bedrooms or full bathrooms on the first floor). Living in AL gave them privacy, but help was a button push away. It worked for them (and it’s been good for her to have a community home since he died). Different strokes for different folks.
This is my opinion as well. You are basically moving money around to appear indigent when you’re not.
When I spoke at client events, the majority were hosted at nice restaurants or country clubs. Yes, some people had a couple of hundred thousand life savings but many had at least a few million in investable assets (otherwise the advisors wouldnt be working with them).
I would not answer any questions regarding Medicaid Trusts.
We looked at home care for my dad when my mom passed. He had it in his mind that senior living centers were places women went to when their husbands died. Would have been very expensive based on number of hours of care he needs (and its less someone to actually care for him than to just spend time with him because he is extremely social and has memory issues so someone needs to keep an eye on him). But he had a back problem that required a rehab stay in a skilled nursing facility. After spending a couple months there, he transitioned to the assisted living side of the same facility.
From a social stand point its great because there are a lot of opportunities for socialization. Everyone in the place knows him because he talks with everyone and anyone. Better than just having one person with him at home. Or spending any amount of time at home by himself. He has his own apartment so he can spend time by himself if he wants. All meals are in the dining room (or he can eat in his room which is something several residents do but my dad never does).
My siblings thought we could get by with less daily care if he stayed at home. But that would have him by himself too many hours each day (socialization issues plus uncertainty as to having someone keep an eye on him). But when you look at the cost of the home care hours he would have needed (and add in food, house/maintenance/utilities/etc and compare that to assisted living costs, the AL facility was actually less expensive.
Different approaches work better for different people. Just need to look at what the parent/you need and what will better serve them and costs of each. You can also think about potential future needs going forward but that can be challenging (life is what happens while you are making plans type situation).
My mother has agency home health aides 24/7 in my home. It’s costing her $20,000.00 per month. She can afford it for now but not for too long. It’s unsustainable.
