Tuesday, October 7, 2014

Longterm Health Care Insurance (Bleah!)

     Who can afford it? We sure can't. We much prefer save for retirement and the kids' collage educations which we can't afford either. Yet there is hope for us at least for the latter two: we scrimp and save and something will be there when the time and need comes. The trouble with long-term health care insurance on the other hand is it's a gamble: it'll only pay if something horrible happens. To get near one hundred percent coverage, we'd need to fork over whopping mortgage-sized premiums (we can't even afford a house, which for us would be a far wiser investment if we could afford one), and to settle for middling coverage at more affordable though still expensive, flush-it-down-the-drain rates would simply delay the inevitable: the dreaded spend-down of accumulated personal assets before Medicaid kicks in. 
     For those unfamiliar with Medicaid, the U.S. federal and state governments program will cover personal long-term health care expenses after a qualified (sick, sick, sick) person in essence becomes broke (excluding house and car and other personal effects, depending on state). Thus a wonderful, hardworking mom or dad—diligent saver and fine citizen—who suddenly through no fault of his or her own takes ill resulting in permanent disability and longterm health care needs, has to spent down accumulated life savings before Medicaid will pay a penny. Henceforth, one hundred percent of costs will be covered.
     This spend down provision is so dreaded by my mom, she once said if faced with a personal long-term health care crisis, she'd just...and she looked skyward, shrugged, and gestured with matter-of-fact face and upturned hands, meaning she'd take her own life because to her it wouldn't be a life worth living—a quality of life issue—and the thought of having to hand all her life's loving, intentional hard earned savings meant to benefit her family to outrageously expensive health care providers in a matter of a few short years repulsed her beyond words.
     So to prevent that my parents have been recently transferring while they are still healthy substantial assets to my siblings and me, because any gifts made within five years of applying for Medicaid will result in a “claw back” provision that delays benefits approximately equivalent to the gift amount. So my parents are gambling that they won't get seriously ill within five years of making these gifts (my mom's main concern) and also that if they need that money (say if one of them becomes seriously ill or dies), that we'll do the right thing and provide them the necessary finances (my dad's main concern). I assured Dad I'd do my share (though it still makes him uncomfortable as it goes against his strong independence ethic).
     Decades ago my work required me to examine the finances of an elderly widow with over a million dollars in assets. In a little over a decade, her savings had been depleted by longterm health care expenses before Medicaid kicked in.
     I raise this because this has been a large dysfunctional ongoing problem in America's long-term health care system and I deem it shameful that it hasn't yet been resolved or even seriously addressed. Should middle class Americans have to go broke before they're helped? If so, why?
     One abhorrent option desperate spouses sometimes exercise is divorce. It's totally legal and Medicare will kick in after about fifty percent of former jointly owned property is spent down (versus one hundred percent). Most of these are paper-only divorces with couples still doing things as they had before—no need to separate or cut ties, but at what cost? Is marriage just a legal document that no one else has to know about? Or is it a sacred lifelong commitment?
     Another option rarely mentioned that I think I might be willing to explore is moving to a low cost locale, probably abroad. Such locales abound. And they provide equivalent palliative or nursing care at a puny fraction of the cost.
     Some people, I believe are far too fixed on where they feel they have to live to be happy. Being open to more world-wide possibilities would bring far more happiness to far more people. It's not so bad and scary out there as most people imagine because the world is becoming increasingly homogenized. Just look at the photos. Just read travel web sites and books. Just go to a few places. And meet some people. It all strikes me as familiar yet excitingly different. Does it really matter what language the health care provider speaks if everyone is comfortable and growing? It might be a lifelong dream fulfilled for some—spending their final years together in beautiful exotic countries and not having to worry endlessly about money.

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