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Financial lessons from my family's experience with long-term care insurance
- jqpabc123 1y agoDelay, deny, defend --- this is the insurance industry's modus operandi. Insurance is the only industry where customers are the enemy.
- toomuchtodo 1y agoThere seems to be no will to replace this dysfunctional arrangement with a social safety net unfortunately.
- zackmorris 1y agoBecause injustice is corruption. So every area of our lives that feels like it doesn't work like it used to - cost of living, healthcare, education, antitrust enforcement, journalism, accountability at the highest levels - represents a segment of the economy which has been corrupted. Through this lens, socioeconomic policies start to make sense. For example, if your goal is to skim a fraction of the income from everyone in an economy and redirect those funds to specific goals/organizations/individuals, you could put tariffs on common goods and pass the funds collected on to companies granted large government contracts. Then the largest companies like GM and Ford see their profits reduced or even show a loss, while Grok and Palantir have all the money they need for mass surveillance. Explanations for regulatory capture aren't normally this reductive, but wealth inequality has reached such monumental proportions that the simplest answer tends to be the right one when the needs of the few outweigh the needs of the many.
- drstewart 1y agoSo through that lens how do you explain the healthcare situation before the start of tariffs, or is your entire worldview shaped based only on the news you read in the last three days?
- zackmorris 1y agoSorry for my late reply. I believe that the US healthcare crisis started in 1973 when Nixon signed the HMO Act, which had the effect of tying health insurance to employment: https://en.wikipedia.org/wiki/Health_Maintenance_Organization_Act_of_1973 https://en.wikipedia.org/wiki/Health_Maintenance_Organizatio... The alternative would have been some kind of single-payer option where US tax dollars would fun Medicare and/or Medicaid for all. Here is an explanation I found: https://medicaiddirectors.org/resource/understanding-managed-care/ https://medicaiddirectors.org/resource/understanding-managed... This differs from a public option, which would be a generic insurance offered by the government at a substantial savings over private: https://www.currentaffairs.org/news/2019/07/why-a-public-option-isnt-enough https://www.currentaffairs.org/news/2019/07/why-a-public-opt... A public option likely would be 20-50% less expensive than private due to the 80/20 rule and the fact the European healthcare is about 1/2 the cost of US healthcare, so a current $400/month plan might be $200-320/month: https://www.aeaweb.org/research/regulating-health-insurers-aca-medical-loss-ratio https://www.aeaweb.org/research/regulating-health-insurers-a... https://nashbio.com/blog/healthcare/the-healthcare-divide-privatized-us-vs-public-european-models/ https://nashbio.com/blog/healthcare/the-healthcare-divide-pr... Unfortunately Obamacare (Romneycare) forced everyone to get insurance or face a tax penalty mandate, which was lifted by Trump in the Tax Cuts and Jobs Act of 2017: https://www.ehealthinsurance.com/resources/affordable-care-act/obamacare-tax-penalties https://www.ehealthinsurance.com/resources/affordable-care-a... - Knowing these facts, what's really going on? Two things: * Obamacare did little to address the natural monopoly aspect of healthcare, so costs exploded * Republican concerns about government overreach into our private lives (knowing our info and determining who receives care) and negative impacts on private health industries have not been heard Natural monopolies are things that everyone needs, such as water, sewer, trash, electricity, education, healthcare, etc: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly Meaning that eventually running a capitalist system results in 1 or 2 companies controlling the entire market and charging whatever they wish, since high cost of entry prevents competition. Without competition, there is no supply and demand curve to counteract price increases. In other words, whoever controls the water can sell it at any price. Or insulin, or Epipens, or Hepatitis C treatments. The only way to bring costs down on a natural monopoly is through regulation. Society chooses which firm(s) will supply the good or service, and how much it will cost. Overages are paid through subsidies, which can be high, but are at least under public review, unlike when private industry controls a market. These are the reasons why healthcare got so expensive. But the meaning behind it, that's more nuanced. The US is very into individual responsibility. Our belief is that a strong citizenry ensures a strong nation. Because we defeated not just fascism in WWII, but the rise of socialism and communism during the Cold War. Our privately funded athletes beat state-funded athletes in the Olympics. Our private industry runs more efficiently than (for example) national construction projects in Russia and China which built cities that nobody lives in. We have our own pork barrel projects, but they tend to be limited by public scrutiny, unlike in communist nations. The US is also very into privacy. We have medical privacy laws like HIPAA which may not exist with state-funded medical care. Now, this is a half-truth, because Europe has arguably the same or better privacy than we do. Because there is little incentive to sell medical information there, unlike here. What it really comes down to is that people who are used to paying through the nose for US health insurance after a lifetime of hard work aren't ready to see others receive it for free through the government. They don't want someone determining how long they have to wait for care, or if they receive it at all. They perceive government red tape as making health providers even more expensive or putting them out of business. As in, why would doctors go to medical school merely to be paid little more than teachers and other public servants? Yes, privacy may be impacted with single-payer. But in the US, the answer is usually about $$$. Sadly, this debate has resulted in the lose-lose we see today: rising costs with no backstop, and threatened privacy due to regulatory capture by health companies which have misaligned incentives and are too big to fail. - My solution to this political impasse would be a gradual transition to single-payer healthcare (probably Medicare for All) on an opt-in basis, either at the state or individual level. Knowing that taxpayers who opt in may pay a higher rate for a time to supplement those on private insurance. Until enough people are in the single-payer system that it becomes self-evidently better and the majority switch to it. Similar to private school vouchers, except going the other direction: public healthcare vouchers. People could still buy private insurance to supplement Medicare for All and go to the front of the line. I don't like it, because I believe that healthcare is a human right that shouldn't depend on money, but this is America. If someone has the money to pay doctors overtime, then it probably makes little economic sense to stop them. Medical research should go back to the previous university/publicly funded model. So grants would be available for companies pursuing billion dollar cures for cancer and other diseases which diminish quality of life or its duration. Then medications would be sold at close to wholesale price. This eliminates the current problems where pharmaceutical companies sell treatments instead of cures, that tend to start out very expensive. - Sorry this got so long. I believe that you'd receive a similar summary from an LLM, and that without this context, a debate would fall into dogmatic attacks that lead nowhere. Edit: fixed small typos.
- TuringNYC 1y ago>> There seems to be no will to replace this dysfunctional arrangement with a social safety net unfortunately. I think one problem is that healthcare in many cases is meant to tackle the 1.5-2 sigma problems -- so naturally few people really encounter bad healthcare. The others thing they have good healthcare, until they are unlucky enough to encounter an issue. I'm shocked how many people on my exact same health plan at work think it is a great plan.
- wwweston 1y agoThe crucial understanding is that incentives are cross aligned because the product is risk coverage. The more immediate/pressing your need for risk coverage, the worse it is for them to sell it to you. The less you need it, the better it is for them to sell it to you and the worse for you to buy it. Pretty different than ice cream or cars or housing. Too many people just think “oh corporate greed” without thinking about the underlying economics (partly because of how us culture pretends markets are magic).
- pyuser583 1y agoThis is why state's have insurance commissions. In the past, insurance companies (think: liability, fire, life, shipping) responded to a claim by hiring a lawyer and negotiating down. Like most contracts. So states began creating insurance commissions, which serve as law firms that defend consumers from insurance companies. In practice, their existence forces insurance companies to pay what they are owed. We need insurance commissions for health insurance. If there is a reason why the policy shouldn't pay (services received after policy expired, for example), the insurance commission has to sign off. This is how normal insurance works. Health insurance, of course, is not normal insurance.
- lazyasciiart 1y agoLTC insurance is covered by insurance commissions.
- mjevans 1y agoWe need to just nationalize these things as basic civic infrastructure that everyone funds as part of the social contract.
- pyuser583 1y agoMy immediate worry is that insurance usually focuses on fixing private harm, not public harm. If my house burns down, there's both public harm and private harm. The public harm is the danger to bystanders, the loss of neighboring real estate values, etc. The private harm is the fact that I lost most of my equity and have to declare bankruptcy to get out of my mortgage. Insurance is focused around preventing private harm. So the state is now on it's own in preventing public harm (already the case), but also now liable to remedy the private harm too. I personally know many millionaires who lost their mansions in the LA fire. I'm glad tax payers aren't paying to rebuild their $20 million dollar houses. That's an extreme example, but insurance benefits those who have something to lose the most. Let's keep government insurance focused on things that private industry refuses to insure, like unemployment and health insurance for sick people.
- Workaccount2 1y agoPeople need to stop looking at it like this. Healthcare is a triangle. There are three players. You, Insurance, and Doctor. All three are adversaries and allies in different ways.
- Synthetic7346 1y agoIn reality the triangle is Doctors, Insurance, Hospitals, and you in the middle.
- frankharv 1y agoIn reality what the article says is they needed adult-sitters. Family at first but USE PROFESSIONALS. Due to scummy ins company wanting docs. How is that health care? Babysitting is now health care??? We need a better way to deal with dementia. Not health care. A literal babysitter to make sure they eat and don't run into the street. I don't see dementia as sickness. Brain illness maybe. So we have to warehouse these feeble folk. That is the problem. We need a more humane way rather than Doctor K's method.. What about the poor old guys girlfriend?
- SoftTalker 1y agoI wrote a longer response but deleted it as it was just a personal anecdote. Suffice it to say I'll never buy LTC insurance or participate in any elder care such as "assisted living" or "nursing care." It's all (IMO) engineered to drain old people of their assets before they die. Providing care is nowhere on the list of motivations of anyone involved.
- thepryz 1y agoI could not agree more. My father has a neurodegenerative disorder that requires 24 hour care. He did tons of research and purchased LTC insurance decades before he was diagnosed. Experiencing first hand how difficult and predatory both the insurance company and the care facilities are has made it so I will never put my own children through it. My plan is to just euthanize myself when the time comes.
- tiahura 1y agoI disagree. Getting a $3800/mo payment for up to 3 years sure was nice when I had to put mom in a $4000/mo assisted living facility. There’s a reason companies got away from offering these policies, they were losing money on them.
- SoftTalker 1y agoIn my case they never paid. According to the lawyers I had involved, this isn't uncommon.
- SilverElfin 1y agoI’ve heard from many recent moms that Aetna regularly denies normal labor and delivery charges that are explicitly covered in their plans. That then forces you through a months long process of calling them repeatedly, tolerating hold times of 1-2 hours each time, and getting virtually no help. And maybe at the end of it, when your child is almost one year old, they may pay out. That’s for a normal delivery with no complications. Aetna knows exhausted and stressed moms are less likely to persist. It is blatantly fraudulent but they get away with it because no one has the time or money to get their executives thrown in jail.
- ta555555 1y agoThe alternative is to depose them. It's a massive shame how he is treated right now. Right after the deposition of one mass murderer CEO, another would-be mass murderer insurer backtracked their plans to limit time under anesthesia. Deposition works. Even those who believe human lives are equal (they are not) have to admit the price of one dead (bad) person outweighs the number of people who would have died or had serious complications from rushed procedures.
- GnarfGnarf 1y agoThere are three things a nation needs to accept about universal health care: (1) It’s expensive (2) Everybody has to pay (3) The government’s gotta run it
- bluGill 1y agoGovernment does not have to run it. Gokernment needs to ensure it is run well but there is no reason they have to run it.
- reactordev 1y agoOversight doesn’t work, look at the finance markets.
- vjvjvjvjghv 1y agoIt works in other countries
- bluGill 1y agoworks very well there - don't confuse imperfection for not working.
- cowcity 1y agoAmericans are perfectly conditioned to instinctively and aggressively deny all three. :(
- bluGill 1y agoYou need to get this long before you need it, but also ensure it is good plan that will take care of you. The person in the article is lucky to have kids doing that, if you don't have kids who care who will care for you.
- vjvjvjvjghv 1y ago"ensure it is good plan that will take care of you. " That's basically impossible. You will only know if you made the right choice once you are actually starting to use the insurance.
- bluGill 1y agonot exactly - you can check on the experience of those who have it. Though of course things can change.
- lvl155 1y agoHealthcare in the US is broken and they won’t let you fix it because the money is too good. Think about the fact that PBMs, which is there to save and manage on pharma is incentivized to promote drug price inflation. That’s just one “small” piece of this clusterf*k. It’s layers and layers of these convoluted system of incentives. As to OP, the simplest solution is to move out of the US early enough or become “poor” enough and be in a wealthy blue state by the time you get to this predicament.
- wnc3141 1y agoI think the broader extrapolation is that the social contract has emerged around giving private enterprise wide latitude to promote the public welfare. However that does mean that the quality of said welfare entirely revolves how profitable you are to said enterprise. While great for airline tickets, its a tragedy for healthcare.
- silisili 1y agoHealthcare is little more than a jobs program at this point. I believe it is the largest industry by employment in every single state now. That compounds the problem even further. Really fixing it would put a double digit percentage of people out of work. I'm all for it, but I can see why politicians are hesitant.
- Avicebron 1y ago> Really fixing it would put a double digit percentage of people out of work. I'm all for it, but I can see why politicians are hesitant. I'd love to hear what you think "really fixing it" is, please share. I can report that all (almost all?) of the hospitals and their networks both big and small in the area I am in have had layoffs this year of admin staff and healthcare professionals (nurses, doctors, etc). They have reduced bed counts, and cut programs and treatment options available. All of this was done in the name of the "affordability crisis" and is kind of like the 3rd wave of this kind of consolidation, belt-tightening behavior. And..prices haven't gone down, and they keep cutting.
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- malshe 1y agoI wonder if moving his father to an assisted living facility at some point will be a better option. I have little experience with this topic so I am genuinely curious.
- thepryz 1y agoIn my experience, these facilities are all in crisis. They can't find people to staff the facilities and provide care and when they do, they can't afford to pay them. My father has a neurodegenerative disorder and we've struggled to find a place that will provide consistent care. My mother, a retired nurse, is the one who tends to do a significant amount of the work to feed, clean, and otherwise care for him despite paying over $10k/month. It's infuriating.
- malshe 1y agoOh wow, that's frustrating! I hope you find someone to provide consistent care at a reasonable price. Btw do your parents live in a state with high cost of living or this is a general situation across the country?
- thepryz 1y agoMidwest, so cost of living is relatively low to moderate. I don't have firsthand experience elsewhere but it's my understanding that what we experience isn't uncommon. This is the third facility he's been in and options are limited because a lot of facilities aren't staffed to provide memory care. Unfortunately, there just aren't many options unless you're wealthy enough to have in-home care.
- WarOnPrivacy 1y agoMy youngest and I were discussing how removing zoning barriers to ADU (in-law suites) can be a big win for families and small win for housing in general. In short, build an efficiency apartment on family property for an alone-living relative. Family can better provide support; the relative's residence goes back into the housing supply. The municipality provides usual construction inspections but doesn't prevent the construction for non-pragmatic reasons. ref: https://duckduckgo.com/?t=h_&q=zoning+to+allow+ADU%2C+in-law+suites&ia=news&iar=news https://duckduckgo.com/?t=h_&q=zoning+to+allow+ADU%2C+in-law...
- mud_dauber 1y agohis notes are EXACTLY my experience. bookmark it.
- wrs 1y agoSame here…three times so far.
- dehrmann 1y ago> they each paid about $14,000 in annual premiums for 10 years, and the daily benefit started at $200 per day. Insurance companies have to make money, but that's not that good of a deal, and the payout isn't that high ($73k annually) considering you won't be doing much else.
- SoftTalker 1y agoConsider also that by the time you need a nursing home or some other form of continual skilled care you are probably going to die within that year. "Long-Term" is sort of a scare tactic that is used to get you imagining that you're going to be needing expensive skilled care for years. That can happen, but isn't normal.
- lazyasciiart 1y agoSevere dementia id exactly when it does happen, though. Most patients die within months of moving into a nursing home. Dementia patients average ten years.
- squigz 1y agoGiven that my only experience with such homes is indeed long-term, I'd be curious to see actual statistics on this
- Scoundreller 1y agoThe studies I’ve seen that say months or a small number of years specially look at older adult admissions, so may exclude a lot of dementia patients. US study: > The mean age of decedents was 83.3 (SD 9.0) and the majority were female (59.12%), and White (81.5%). Median and mean length of stay prior to death were 5 months (IQR 1-20) and 13.7 months (SD 18.4), respectively. Fifty-three percent died within 6 months of placement. Large differences in median length of stay were observed by gender (men, 3 months vs. women, 8 months) and net worth (highest quartile, 3 months vs. lowest quartile, 9 months) (all p<.001). These differences persisted after adjustment for age, sex, marital status, net worth, geographic region, and diagnosed chronic conditions (cancer, hypertension, diabetes, lung disease, heart disease, and stroke). https://pmc.ncbi.nlm.nih.gov/articles/PMC2945440/ https://pmc.ncbi.nlm.nih.gov/articles/PMC2945440/ Danish Study: > The median survival after nursing home admission was 25.8 months, with the 3-year survival being 37%. https://academic.oup.com/ageing/article/49/1/67/5639744 https://academic.oup.com/ageing/article/49/1/67/5639744 Tbh, there’s a lot of data on this because it’s easy to measure.
- mhb 1y agoThere's another interesting twist to this. The insurance company is willing to pay a certain hourly rate to home health care providers. There is a limited number of health care providers willing to work for this rate. Supplementing the rate is not permitted. Lo and behold, it is sometimes not possible to find a health care provider which the insurance will pay for.
- tsoukase 1y agoFrom the European POV this is awful and marginally scary. A commenter down the article writes that she is gonna sell her mother's house in order to serve her and even that will not last long. The way US health care functions is an argument that the nation's principles (all free capitalism and no public intervention) are problematic. If I were POTUS for a season, I would make a volcanic erruption in the health system. If I needed to care an elder without insurance, I would pay out of pocket a willing friend or even a homeless and not proceed to euthanasia as a commenter suggested.
- wat10000 1y agoWe have a ton of public intervention in health, it’s just not very well done. The US government spends more per capita on health care than other developed countries, while covering only a fraction of the population. We’ve had universal health care for almost forty years, it’s just bad and nobody wants to call it that. A law called EMTALA says hospital emergency rooms can’t turn people away for being unable to pay, so anyone can get care, just in a very inefficient way. Properly covering everybody is Socialism(tm) and therefore isn’t in the cards.
- rawgabbit 1y agoI don't know about LTC insurance. I can tell you though; how it works in Texas where I live. If you want to go into a reputable facility, meaning one that is actually staffed and pays their staff a livable wage, it is very expensive; you pay out of your own pocket and after you had exhausted your savings etc. then they will apply for Medicaid on your behalf and use those government funds to continue your care. As for me, when it is my turn, I plan to do "home attendant services". My understanding is that Medicare will pay, after a doctor has declared I am home bound, medical services at my home. I will have to arrange for meals, bathing, etc. out of my own pocket. When that time comes, I hope to find people at my church who are willing to do this. When it comes close to my time, I would need the doctor to say I need "at home hospice". Then an attendant will stay with me 24 hours a day and give me painkillers etc. until I pass in my own home.
- refurb 1y ago> all free capitalism and no public intervention Who is going to tell them?
- narrator 1y agoThe best way to do long-term care for a loved one is to hire the nurses they like at a facility they stay at for a short while to treat the sick person at home. This is vastly cheaper than doing so in a facility, and the nurses earn more and are incentivized to keep the person as healthy as possible because the job pays very well since there is no facility extracting enormous overhead and executive salary costs from their salary.
- jalapenos 1y agoOne thing I don't get, given all the talk that the US healthcare system is like it is "because capitalism" - is why doesn't supply increase given the sky high costs? You'd think with the insane money the system is gouging out of people, every man and his dog would be trying to get a bite? Also sounds like buying insurance isn't enough there, you'd have to buy some kind of insurer management service to deal with all the bullshit required to claim
- FloatArtifact 1y agoFor those in the US, In some states like Minnesota, if you have long-term care insurance, assets can be sheltered equal to the amount of the LTC policy. This allows you qualify for Medicare with significant assets beyond the House, Vehicle and traditional qualifying assets. The sheltered assets could be used for legacy or personal needs.
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