The Long Term Care Review by Duane Lipham, CLTC

Once a year the Corporation for Long-Term Care Certification releases their one page summary of tax benefits for LTCI. I have installed that updated summary on my website and it can be viewed easily by clicking here now.

They also have produced a very nice Powerpoint presentation that compliments the summary as well. It can viewe as a PDF file by clicking here.

I hope to see tax benefits for long-term care insurance increased in the years ahead but what we have available to us now is found in these documents.

The holidays are a perfect opportunity to see how older members of the family are getting along health-wise. We may not see each other very often through the year and sometimes families are shocked by the physical appearance of older ones when they get together to celebrate the holidays.

Very often if the health of one older spouse is declining the relatively healthy spouse will try to take the burden on alone. The extent of the stress and physical demands required may not be apparent through telephone conversations. But it can often be readily seen in person.

So how do family members begin to discuss long-term care needs within the family in a considerate manner?

Here is a article that provides some warning signs that you can be watching for that indicate long-term care may soon be needed, and it also makes some suggestions on how to bring the subject up and help older family members get the help they need.

Gail Sheehy, the well-known author of the non-fiction best-seller Passages and frequent contributor to Parade magazine and other popular periodicals, is writing a new book on long-term care based on her experiences caring for her ill husband. She calls her 15-year journey through the U.S. healthcare system a “nightmare.” Even though she and her husband were both successful and financially well-off, they could have used long-term care insurance to pay the bills. “We had a hell of a time trying to maintain some quality of life,” she says.

Click here to read more.

The American Health Care Association has just released a report showing which state Medicaid programs are the most severely under funded. Topping that list are New York, Illinois and Ohio. Projected Medicaid cuts in 2009 will make the situation even worse and make the case for private LTCi even more compelling.

Here is a list of the states whose Medicaid program is the most seriously under funded:

New York $ 548.1
Illinois $ 379.3
Ohio $ 281.2
Pennsylvania $ 261.2
New Jersey $ 241.9
Texas $ 235.0
California $ 203.6
Wisconsin $ 200.0
Massachusetts $ 197.0
Florida $ 188.5

Click here to read more about this report.

This blog has regularly contributed information on the latest status of the long-term care partnership program that has been rolling out across the country as states adopt it through legislation. This program was initially introduced by the federal government in the Deficit Reduction Act of 2005 and each state can choose whether it will join the program or not.

One of the common questions I am asked about the partnership program is whether or not there will be reciprocity from one state to another if someone buys a long-term care insurance policy in one state and then moves to a different state.

HHS recently issued a notice that describes the reciprocity standards for LTC Partnership states, under which they agree to provide beneficiaries who have purchased a policy in one state—but move to the other—asset protection if they qualify for Medicaid in their new locale. States participating in a reciprocal agreement must agree to the following:

• Medicaid applicants who purchased a LTC policy in a state participating in the reciprocal agreement and who has received benefits under their private LTC policy will receive an asset disregard in an amount equal to the benefits received (dollar for dollar).
• The asset disregard procedure and calculations must be uniform among the states participating in the reciprocal agreement.
• Amounts equal to the benefits received under the LTC policy will be exempt from Medicaid estate recovery.
• If a person moves from the state in which his or her partnership policy was issued and later applies for Medicaid in another state participating in the agreement where they are determined to be eligible for Medicaid using the asset disregard, the asset disregard may not be revoked upon eligibility re-determination if the state subsequently withdraws from the reciprocal agreement.

All DRA partnership states will be deemed as participating in the reciprocal agreement unless they elect to be exempt from the standards by notifying the Department of Health and Human Services in writing. States opting for an exempt status may choose to form agreements on a state-by-state basis outside the agreement. Conversely, the Original partnership states must elect to participate in the reciprocal agreement.

To date, no DRA state has formally declared that they are opting out.

I see it all the time. Seniors who have assets enough that need to be protected to make sure that their retirement incomes are not threatened. And yet they complain loudly about the cost of long-term care insurance and just procrastinate it’s purchase until it is no longer practical to consider.

A couple of reasons that long-term care insurance is expensive is simply because it is used so frequently and the cost of long-term care is unbelievably high. Let’s put it another way. Homeowners insurance is relatively inexpensive even though the cost of replacing a home due to fire or natural disaster can be in the hundreds of thousands or millions of dollars. But what keeps the cost of this kind of insurance low is that very homes will be destroyed in this manner. When the risk is low the insurance premiums are low as well.

On the other hand, not only are long-term care costs very expensive (almost $200 a day on average in many areas) but almost 2 out 3 seniors who pass the age of 65 will need some form of long-term care.

This calls for recognizing that long-term care insurance makes sense for most middle income people who have assets to protect.

Here is an excerpt from a MarketWatch article that discusses how that many seniors are woefully underinsured:

“Given all that could and does wrong in retirement, Salisbury also says older Americans should buy more property, life, auto, disability, health and long-term care insurance. Self-insurance, says Salisbury, is a sure way to destroy your savings. Likewise, Laibson said Americans are not setting aside enough to pay for potential late-in-life health and long-term-care costs. ”

Click here to read more of this article.

In most cases, if you are in reasonable health you can expect to be approved for long-term care insurance. But approval is not automatic and there are guidelines that the major carriers use to determine who qualifies.

These guidelines are published by each carrier in an underwriting field guide that can be used by agents to help them decide whether or not someone is a likely candidate for long-term care insurance approval with that company. Many underwriting procedures are fairly standard across the industry and I’ll discuss some of the most common reasons why a person could be declined for this kind of insurance.

These include health conditions such as: multiple sclerosis, Parkinson’s disease, AIDS, ALS (Lou Gehrigs disease), Alzheimers or dementia, muscular dystrophy and certain aggressive and metastatic cancers.

Most applications for long-term care insurance contain language designed to discourage someone with these conditions from placing an application with that company.

There are other more common illnesses that can also result in decline under certain circumstances. Those with more mild cases may be approved while those who have more advanced forms of the illness or disease may be declined instead.

These can include: arthritis (especially rheumatoid arthritis that affects weight bearing joints), Type 1 diabetes which requires substantial amounts of insulin to control, auto-immune disorders such as some forms of lupus, advanced osteoporosis, and others.

Some illnesses may be acceptable alone but may be declined in combination with other factors. For instance, some carriers will take a dim view of tobacco use when in combination with diabetes. Back problems associated with the use of narcotics on a daily basis to control the pain can be a reason for decline.

As you can see there are several factors that must be considered before applying for long-term care insurance if the applicant has health issues. What one carrier may allow another will automatically decline.

This calls for the agent to be knowledgeable and honest with each prospective client regarding their chances for approval. This means that the agent should not assign unrealistic rate classifications to those who most likely will not be able to get them based on the underwriting procedures of that carrier.

Since the cost of the insurance is influenced heavily by the rate classification based on health, there is a tendency on the part of some agents to promote rosy expectations in the application stage in order to get the sale. This does not benefit the client in the long run though. You are better served by working with a competent, experienced agent who will be honest in their assessment of your individual health condition.

The Internal Revenue Service has announced the maximum tax deduction that can be taken on qualified LTCi premiums in 2009.

Maximum Deduction for Qualified LTCi Premiums Under Code 213(d)(10)

Attained Age Before Close of Year 2009:

• 40 or less - $320
• More than 40 but no more than 50 - $600
• More than 50 but no more than 60 - $1,190
• More than 60 but no more than 70 - $3,180
• More than 70 - $3,980

Of course, these deductions are not available to everyone who owns LTCI. Those who are self-employed, owners of an LLC, or incorporated, will be able to get the most benefit from this schedule. I would happy to explain who benefits most from these deductions for anyone who inquires.

As in all tax matters it is best to consult your tax professional for clear advice on how much LTCI premiums can be deducted in your individual situation though.

The MetLife Mature Market Institute released the results of their 2008 survey on adult day services and home care costs.

They found that the average hourly rate of a Home Health Aide is now $20, up 5% from a year earlier. Companion/homemaker services saw no change and remain $18 per hour. Adult Day Services – programs that provide social, health and therapeutic activities in a group environment – are up 5% and now average $64 per day.

This is more or less in line with an average 5% annual inflationary increase in the long-term care industry for costs over the past 30 years or so. It is one more concrete support for getting inflation protection in a LTCI policy to make sure that you have the funds necessary to pay for care several years down the road if needed.

Long-term care insurance is a good financial protection vehicle for anyone who has enough assets to protect and can comfortably afford the premiums. It can help make sure that all of the time and effort spent on acquiring a sufficient retirement income is not lost due to the rising costs of long-term care.

There are several specific advantages for couples purchasing long-term care insurance. One of the advantages is that most often the caregiver for a married individual who needs care is the healthy spouse. Without LTCI the healthy spouse often takes on the bulk of caregiving duties simply to try to avoid paying the high costs associated with either home or institutional care.

This often eventually leaves the caregiving spouse almost as ill as the one who needs care. LTCI helps provide the necessary funds so that the healthy spouse can make sure that quality care is provided for the ill spouse while not further endangering their own health.

Couples can also benefit when they purchase LTCI as all major carriers will discount the cost of a policy by thirty to forty percent when both spouses are on the same policy. This can result in significant cost savings for married couples.

The good news is that even those who may not be married but have lived with someone else with whom they are in a committed relationship for more than a year may also receive the same discount for LTCI.

But what if one spouse is approved for a policy but the other has significant health issues that do not allow them to qualify for LTCI any longer? Does this mean that they should decline coverage for the healthy spouse? No.

LTCI is still an advantage for this couple because no one knows which spouse will need long-term care first. If there is a major reversal of health for the previously healthy spouse, the one who had health issues would be in an even more disadvantaged position as a caregiver. LTCI would provide the funds needed for quality care without further damaging the health of the spouse who was declined for LTCI.

It would not be reasonable to forego health insurance for one spouse simply because the other cannot qualify for a major medical plan. The same is true for LTCI. It may be disappointing that both cannot be covered but the financial risks for each of them are still prevalent and should not be ignored.

For several years the federal long-term care insurance program has been jointly administered by both John Hancock and MetLife. This is a testament to the stability and excellent service record that these carriers enjoy.

However, the current contract comes up for renewal in April 2009 and federal employees are being told in advance that changes could be coming to the current program. This includes the possibility of rates going up and even perhaps a change of administration of the program by a different company.

This warning is being published so that any federal employee who is considering the purchase of LTCI through the program will know in advance what may be happening next April.

You can read about these changes here.

In this election season it may be helpful to see what both presidential candidates are saying about the coming long-term care crisis and how they would suggest dealing with it. Here is an excerpt of an article that sheds some light on where they stand:

“Sen. Barack Obama

Sen. Obama has a section on his Web site devoted to seniors and Social Security. With regard to long-term care, Sen. Obama’s Web site states that he “will work to give seniors choices about their care, consistent with their needs, and not biased towards institutional care.

He will work to reform the financing of long term care to protect seniors and families. He will work to improve the quality of elder care, including by training more nurses and health care workers.” His Web site also states that he will expand eligibility for Medicaid and ensure it continues to serve its critical safety net function.

In addition, Sen. Obama told the AARP he plans to propose tax code changes that would benefit family caregivers who often “are making substantial contributions without a lot of help.” He has also announced that he will eliminate all income taxes on seniors making less than $50,000 per year.

Other proposals include allowing allow the federal government to negotiate for lower drug prices for the Medicare program, just as it does to lower prices for our veterans. Sen. Obama also supports allowing seniors to import safe prescription drugs from overseas and preventing pharmaceutical companies from blocking cheap and safe generic drugs from the market.

With regard to Social Security, Sen. Obama has called for a Social Security payroll tax on incomes above $250,000 a year to begin in 2019. Currently the tax is levied only on the first $102,000 of each worker’s income. He would not impose the tax on incomes between $102,000 and $250,000.

For more on Sen. Obama’s proposals for seniors, click here.

Sen. John McCain

On Sen. McCain’s Web site, he states there is a need to develop a strategy for meeting growing long-term care needs. His Web site mentions state-based experiments such as Cash and Counseling or The Program of All-Inclusive Care for the Elderly (PACE) that “are pioneering approaches for delivering care to people in a home setting.”

Sen. McCain’s Web site states that he wants to “reform the payment systems in Medicaid and Medicare to compensate providers for diagnosis, prevention and care coordination. Medicaid and Medicare should not pay for preventable medical errors or mismanagement.”

To that end, Sen. McCain has proposed a major overhaul of Medicare’s payment system to pay health care providers by how successfully they treat their patients instead of by each individual service they perform. He has also suggested making wealthier Medicare beneficiaries pay more for their benefits. Specifically he has proposed higher Medicare Part D premiums for couples making more than $160,000 a year.

With regard to caregivers, Sen. McCain told the AARP that he believes that decisions about the care of older family members should remain within each family, and “any way we can help caregivers [offset costs through tax credits or other financial incentives] we should. But it needs to be part of an overall policy regarding health care.” ”

You can read the rest of the article here.

I have published articles in this blog in the past that discuss the dire economic straits that the Medicaid system is currently experiencing. I have also reasoned that this situation can only get worse as more baby boomers begin to swell the Medicaid patient rolls and available funds are stretched even further.

Now we are beginning to see some of the results of this untenable situation start to come to fruition as some nursing homes and assisted living centers appear to be targeting Medicaid patients for eviction simply because of financial reasons in some cases.

And the most vulnerable appear to be those patients with dementia or highly vocal families who are on Medicaid, according to a recent Wall Street Journal report.

The federal government permits nursing homes to evict patients for specific reasons, such as endangering the health or safety of others and needing care only available elsewhere.

The facilities claim they play by the rules and follow federal guidelines, but an increasing numbers of formal complaints about nursing home discharge practices suggest otherwise.

The U.S. Administration on Aging has seen complaints double from 1996 to 2006. And this doesn’t take into account informal complaints or unreported incidents.

The reason for the increase in nursing home evictions – also referred to as involuntary discharges – appears to be financial. Evicted Medicaid patients are replaced by patients coming out of the hospital who pay a higher daily rate for short-term care and rely on Medicare or private insurance to pick up the tab.

This new focus on short-term recovery and rehabilitation makes good financial sense for facilities. One nursing home chain claims it averages $411 a day from Medicare patients but just $166 from those on Medicaid. As an industry, nursing homes report Medicaid reimbursements are $4.4 billion short of the actual cost of care.

Of course it’s the patients who suffer the most. Elderly and frail, they are transferred to other nursing home facilities, hospitals or psychiatric facilities, where they find it difficult to thrive in a totally new environment. The “transfer trauma” they experience results in mental health problems, weight loss, and frequent falls that can lead to death within months of a change in venue.

In comparison with nursing home patients, assisted living residents have even less protection. Management in assisted living centers can evict residents without reason or appeal process just by giving them one or two month’s notice. Here, too, the U.S. Administration on Aging has seen discharge practice complaints soar over the last decade. Accusations are growing that Medicaid patients are being targeted for eviction and two states are pursuing assisted-living companies on these charges.

You can read the article “To be Old, Frail and Evicted” by clicking here.

There are several reasons why consumers may choose not to buy long-term care insurance. Some of those reasons can be based on very sound decisions.

For instance, if you have made a thorough investigation into the cost of premiums from several of the financially sound major carriers and have found that the cost is just beyond what you can reasonably bear, this insurance is not for you.

But if you are like most people, the real reason that you may hesitate about preparing for possible future long-term care costs has very little to do with reasonable decisions. It is most likely based on feelings and emotions instead.

Many people live in a state of denial about their possible need for long-term care services in the future. This is often because they have always been relatively healthy in their life and so find it hard to even picture themselves in a state where they may need assistance with activities of daily living.

Or perhaps they remember that their parents just died suddenly or within a short period of time and so they figure that most likely the same will happen to them.

Or perhaps the state of denial is so strong that very little thought has gone into the matter at all. This is because just the thought of this kind of subject seems so depressing that there is a conscious choice to just delay any decision about it to a another time. And that time never comes.

None of these thought processes are based on fact. Anyone knows that good health can change overnight. Almost everyone has knowledge of someone whose health situation changed dramatically in a very short period of time. This risk obviously increases with age. So the chances of it happening to an individual are very real.

Using the health history of your parents as an exact guide for your own future health just doesn’t work either due to the advances that have been made in medical science in recent years. It is obvious that more people are living longer and often need more care in the last years of life. And this care is extremely expensive.

For those who just refuse to even think about their future health care needs, the question must be asked “Who will be left to make this decision for you?”

Simply choosing not to think about the subject does not make the possibility of needing long-term care any less real. It simply defers the decision to those you love the most. They will often have to make decisions about your care at the last minute when the choices are extremely limited and unpleasant.

Our families will be well served if we all decide now to take responsibility for our own future health care needs and make sound decisions based on facts instead of unreasonable emotions.

Like most other consumer services long-term care costs have continued to rise steadily over the past 30 years. Of course, there are periods where the inflation rate in this industry has not been so high. But overall, the historical data shows that private nursing facility costs have tended to double about every fifteen years or so.

Prudential has just released a study on the rising costs of long-term care that covers not only nursing homes, but also assisted living facilities and home care. Here is a summary of what they found:

• Average costs for long-term care services increased over the past two years and are expected to continue to rise. The average daily cost for an assisted-living facility is now more than $100, or $3,241 per month. What’s more, the average daily cost of a private room in a nursing home is now $217, or $79,205 annually.
• Home health care experienced the smallest rate increase, rising just 5 percent over the past two years. The average hourly rate for a home health aide/certified nursing assistant increased by $1 in the past two years, to $21.
• Costs for long-term care services continue to vary significantly by location, with Alaska, New York City, and Stamford, CT consistently being the most expensive areas for nursing home and assisted living facilities, and Oklahoma City, St. Louis, and South Dakota being the least expensive.

You can read more about the results of this study here.

I am often asked about the procedure for getting a claim in process when long-term care becomes necessary. It’s natural to be concerned about this since no one wants to have to go through a hassle to get quality care and make sure that the insurance company is fully on board with the choices they make.

The good news is that several of the top-rated carriers have provisions in their policy to bring in a Care Manager to help with this very important stage. They will assist in helping you fill out the appropriate forms for the insurance company and then help draw up a plan of care that will be in line with the wishes of the policyholder and the medical advice of their doctor. They can even help get everything in motion by making the arrangements for you if you are too ill to do so.

Unfortunately, many people have never heard of Geriatric Care Managers and have no idea about what they do. Here is an article that helps explain more about them:

“About 44 million Americans look after adult family members – an especially daunting task for adult children who live in another state or who have demanding jobs or their own children – according to the Family Caregiver Alliance. And that number is expected to double by 2050.

That’s where geriatric care managers such as Ms. Paggi come in. While they don’t typically provide hands-on care, they help families hire and supervise in-home caregivers or shop for a senior-living community.

Mike Tankersley has called on Ms. Paggi twice in six years, first to evaluate nursing homes for his mother-in-law and more recently to help his mother move from Austin to a senior community in Dallas.

“There are so many communities, we couldn’t have done it on our own,” he said.

A crisis often prompts the initial call to a care manager. A parent falls and breaks a hip, or the children notice that their mother doesn’t remember a conversation from just minutes ago.

In those cases, Dallas care manager Molly Shomer said, she usually starts by sitting down with the family and determining the older person’s physical, mental and social needs. She drafts a plan for care and, if the family agrees, coordinates it.

“Some families may think Mom is ready for a nursing home, but maybe all she needs is a daytime companion,” Ms. Shomer said. “Other times, her continuing to live at home may be isolating or dangerous. It all depends on the person.” ”

You can read the rest of the article here.

One of the main reasons long-term care issues are becoming more critical in the US is the increasing life expectancy rates for the population in general. In short, we are simply living longer because we are surviving many of the diseases that were killing us at earlier ages, and the diseases that increase the likelihood of needing long-term care are on the rise.

This means that although we live longer we need more care in the final stages of life. The National Center for Health Statistics just released new data that illustrates the decline in age-related deaths due to certain common diseases. Here are the findings:

• Between 2005 and 2006, the largest decline in age-adjusted death rates occurred for influenza and pneumonia, with a 12.8 percent decline. Other declines were observed for chronic lower respiratory diseases (6.5 percent), stroke (6.4 percent), heart disease (5.5 percent), diabetes (5.3 percent), hypertension (5 percent), chronic liver disease and cirrhosis (3.3 percent), suicide (2.8 percent), septicemia or blood poisoning (2.7 percent), cancer (1.6 percent) and accidents (1.5 percent).

Here are the findings for life exspectancy:

• Life expectancy at birth hit a new record high in 2006 of 78.1 years, a 0.3 increase from 2005. Record high life expectancy was recorded for both white males and black males (76 years and 70 years, respectively) as well as for white females and black females (81 years and 76.9 years).

Unfortunately Alzheimer’s is still growing as expected and is moving up the list of the leading cause of death. Here is what they found:

• Alzheimer’s disease passed diabetes to become the sixth leading cause of death in the United States in 2006. An estimated 72,914 Americans died of Alzheimer’s disease in 2006. However, the preliminary age-adjusted death rate from Alzheimer’s did not change significantly between 2005 and 2006.

These statistics give even more reason to plan ahead for our long-term care needs with LTCI.

In an earlier blog post I discussed the possibility of LTCI premium increases due to selecting an inflation protection option that is not automatic at the inception of the policy. In this article I will explain how policyholders could face future rate increases due to factors that are beyond their control.

When a policy design includes automatic inflation protection the premiums are designed to stay level for life. This is because all future benefit increases are already built into the premium. So benefits continue to rise each year to offset the cost of inflation but the premiums remain the same.

However, all insurance carriers are required to inform applicants for new LTCI policies that they reserve the right to be able to raise LTCI premiums in the future if it becomes necessary. This is because long-term care has proven to be a constantly changing field in the past 30 years and this presents a significant challenge for insurers to be able to accurately predict future costs in this industry.

There are many other forms of commonly purchased insurance such as life, homeowners, and even auto insurance, These all have reliable and stable data that goes back many years and therefore most insurance carriers are able to accurately predict future costs fairly easily.

On the other hand the ever-changing nature of long-term care presents unique challenges for most insurers and several very good companies have come into this industry in the past and eventually had to cease their LTCI sales or even leave the field altogether. This often means that their policyholders will face rate increases to offset the unforeseen costs that were not built into their premium at the inception of the policy.

Sometimes, these increases may be fairly minor. But in some cases policyholders may face rate increases of 50% – 70% or even more. Of course, this can be a serious problem for owners of these policies who are on a fixed income.

So how does a consumer try to minimize the chances of facing these kind of premium increases in the future?

It is usually best to choose from the major carriers who have been in this field for a long time and have demonstrated solid rate and financial stability. This shows that these carriers have weathered the challenges and problems that are unique to long-term care insurance. It also shows that they employ high quality business practices and underwriting procedures that will most likely make them reliable for many years to come.

Since long-term care insurance has only been available for the last 30 years or so, there are not a lot of companies that can boast of having a stable premium record for the last 20 years or more. But choosing from the short list of highly respected LTCI carriers who have such excellent track records can help protect against significant premium increases in the future.

It’s no secret that in many cases a person’s health will be better overall when they are married and have someone else around for company. Many studies over the years have found this to be true.

In fact, some long-term care insurers place such a high value on married couples that is even reflected in their premium calculations. These companies have greatly biased premiums in favor of those who are married as opposed to a single individual.

So it only makes sense to find out that once a spouse deceases the other may be especially susceptable to needing long-term care. Here is an article that discusses a study that corroborates this:

“An older person’s likelihood of entering a nursing home or other long-term care facility is particularly high immediately after the death of a spouse, new research indicates.

There could be various reasons for this, Elina Nihtila, of the department of sociology at the University of Helsinki, Finland, who led the research, told Reuters Health.

“It may be related to the loss of social and instrumental support, in the form of care and help with daily activities such as help in cooking, cleaning, and shopping formerly shared with the deceased spouse,” Nihtila said.

“Second, grief and spousal loss may cause various symptoms, such as depression and anxiety, loss of appetite, sleep disturbances, fatigue and loss of concentration that could increase the need for institutional care.” She added. “Furthermore, grief may cause increased susceptibility to physical diseases.”

The research team analyzed how the death of a spouse affects the likelihood of entering institutionalized care among nearly 141,000 Finnish adults aged 65 and older. All of them were living with a spouse at the beginning of the study and were followed for five years.”

You can read the rest of the article here.

I’m constantly surprised by the numbers of people I talk to about LTCI who have the assets to comfortably pay for a policy but who ultimately decide to take their chances with the Medicaid system if they exhaust their assets and still need care.

This mentality of reliance on government programs to bail people out of tough financial situations may have worked in the past, but there are ever increasing signs that it will be very risky business in the future.

We are already starting to see many facilities who decline participating in the Medicaid program altogether due to the fact that funds provided for Medicaid patients are often less than what is needed for providing their care. And this is before the baby boomer generation begins to retire and place an even greater strain on the Medicaid coffers in the years ahead.

For those who complain that LTCI premiums are so expensive, my response is “Try paying for the care itself”. Here is an excerpt from an article about how many facilities are actually evicting patients when they become Medicaid eligible:

“Evictions of Medicaid residents from assisted-living centers has become a growing problem across the state, elder care experts say. The state Long-Term Care Ombudsman’s office received 200 complaints last year surrounding involuntary discharges from long-term care centers.

About 75 were specifically related to facilities canceling their Medicaid contracts with the state or reducing the number of beds available to low-income tenants.

Although residents get help finding a new place to live — typically a group home or skilled nursing center — moving can cause “transfer trauma,” leaving the elderly and disabled to think they did something wrong, according to Louise Ryan, the state’s long-term care ombudsman.

Laurie Bebo, chief executive of Assisted Living Concepts, the Wisconsin company that owns Blossom House, said residents are prepared well in advance for a move in order to minimize disruption.

“We have always found appropriate placement for people,” Bebo said.

Companies like ALC that oper-ate assisted-living centers blame low Medicaid reimbursement rates, which in the state of Washington rose just under one percent last year. Such centers, which cater to people who are relatively self-sufficient, lose $20 to $30 a day on each Medicaid resident, according to the Department of Social and Health Services.

Gary Weeks, executive director of the Washington Health Care Association, said this is an unsustainable business model.

“You can’t run a business losing money on every resident on Medicaid and keep charging private-pay patients more and more,” Weeks said.

“What happens is the private-pay folks spend their resources down and become Medicaid-eligible themselves. It’s a cycle we can’t seem to find our way out of.” ”

You can read the rest of the article here.