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Sep 07

Federal LTC Insurance Program Rate Increase (updated)

Due to the number of inquiries I’m having about the rate increase that is happening now on the Federal Long-Term Care Insurance Program (FLTCIP), I’m writing an article which will hopefully benefit many people. The decision to accept the rate increase or reduce benefits must be made by September 30th. Now, if you are just reading this for the facts and not the entertainment, you can skip to the bottom of this post, and you can also see the great FAQ on the FLTCIP website.

You can see elsewhere on this site that my consulting company LTC Consultants did the employee education for the Federal government when that plan was rolled out in 2002 to 4 million employees, 4 million retirees which with all the eligible family members, amounted to a universe of 20 million. What a wild ride! I accepted the assignment after much thought to deliver 1,000 employee education meetings around the country. When I called back to accept it, the person who had asked me said the insurance companies had made an error.  The project required 2000 meetings, not 1000! Gulp.  Moby Dick looks great in the water but when he lands in your boat, it’s a different story. After a deep breath, I accepted the biggest project before or since in the long-term care insurance industry.

The Apprentice started January 3, 2008When I think back on it, I realize we beat Donald Trump to The Apprentice.  Sitting on the plane, I carefully analyzed the map of the United States in the airplane magazine and calculated we needed 13 more people besides me plus a couple of floaters to take up any slack.  I had to use that map because my dad’s work moved us a lot and I never had geography.

The next step was to hire a diverse group instead of all insurance professionals.  Why? Because the Federal family consisted of civilian workers, military and postal employees. We invited people from the military and from social work organizations and long-term care providers to apply with a written statement of qualifications and a video of why they wanted the job. After sifting through hundreds of applications, we selected those who looked good for a personal interview with me. I would pop questions to them like “What do you do when you are angry?”

Line dancing at the Wildhorse Saloon

The selections from that group were invited to Nashville for a three-day extremely intense training…well, there might have been one night of line dancing at The Wildhorse Saloon…

Besides the background training on all the topics related to paying for long-term care, they had to  learn the presentation and do it in front of a video camera. I remember one girl was running a fever on the first day because she was so nervous.  We sent a couple of people home from that training and half had to come back for remedial training a couple of weeks later.

In the remedial training, one girl with a social work background burst into tears in front of the camera and that was it for her, plus a couple more were sent home.  At the end of the process, none of the non-insurance people made it because they just couldn’t learn the presentation without some background already in paying for long-term care. Even with insurance professionals, there were many hair-raising as well as comical moments.

  • The presenter from Oklahoma City had to do his first week of meetings in Philadelphia and the traffic spazzed him out. He was scheduled to do 24 postal meetings in Chicago, starting the following Monday at 8:30 AM. He called at 5:30 p.m. on Friday and quit. I remember interrupting him and saying “I can’t talk anymore because I have 48 hours to find a replacement for you” and terminating the call. My husband Bill and I were flying out the next morning to do two weeks of meetings in Hawaii (who else could do them?)  We grabbed an employee who had made the mistake of working late that night and told her she would be on a plane Sunday afternoon to Chicago to do those postal meetings.  She went postal…but got the job done!
  • We watched the news reports and prayed fervently for the safety of one of our Washington DC presenters who was doing meetings three blocks away from a sniper who wasn’t caught for days.
  • When Fred Thompson requested someone to do the presentation in his office, I hopped on the next plane (who else could do it?)  His staff was very interested and took copious notes.  Fred focused at the end of the presentation when he finally managed to catch the horse fly that had been buzzing around his head for 30 minutes.
  • The Hawaii meetings were incredible. One 30 year old soldier told me he was at the Pearl Harbor meeting because people in Hawaii believe in taking care of their families, and they saw long-term care insurance as the way to keep that promise. So many retirees came that we had to do six meetings, not two as planned. They were lined up, waiting to get into one of the two rooms assigned to us that only held 70 people. Only one man complained about the wait so we gave his money back.  [Kidding]

When it was all said and done, we wound up doing 2,020 meetings in 43 states and 210 cities in four and a half months.

After all that oversharing, you can see why I have an affinity for the Federal program.  The benefits are fantastic, especially the home care benefits that allow informal caregivers for an unlimited time and even family members for a certain amount of time. Unlimited benefits are still available, almost unheard of in today’s market. Inflation options are 5% and 4% compound, when today’s plans emphasize 3%. So in other words, it’s still a great program. Unfortunately, many people don’t realize they are eligible for it, especially adult children of living Federal civilians, military or postal workers annuitants. You can see the long list of eligibles here.

The program is having its second rate increase now, averaging 83% which is only a monthly average of $111, because the premiums have been well under today’s plans.  No one who bought a policy age 80 or older is receiving a rate increase. [This is a correction from my original post.] The increase is mainly due to a better understanding of how many people use long-term care insurance and for how long, and the FLTCIP wants to be sure that future claims can be paid. The low interest rate environment we continue to be in hasn’t helped, because that means claims reserves have to be increased.

A 54 year old woman contacted me recently who has had her plan since she was 49. Her increase will be 30% to keep her benefits the same with an unlimited benefit period and 5% compound inflation, which has made her daily benefit grow from $150 to $191 today. Her biweekly premium is $95. Her premium can stay the same if she decreases the 5% compound to 2.95%. Here’s my answer:

Hi Doris, I’m so glad you contacted me. Please do not decrease your inflation at all. You are so young and 5% compound is a good number, especially for the “country club” assisted living facilities that work out so well for so many people, especially women. You aren’t limited to the options in your letter. Ask what the premium is to decrease from unlimited to 5 years. If you need to shave a little more off, ask them for 4% compound instead of 5%. Try to stay at that level for now. To see the value, multiply your new premium times 26 X 30 years, which is what you will pay in 30 years without another rate increase. Your daily benefit is now at $191 a day and at 5% compound, when you are 84, it will have grown to $825 a day, which is $25,094 a month! With the 5 year plan, that’s at least $1.5 million in benefits. It will be more actually as it continues to grow each year while you are receiving benefits, even though you aren’t paying your premium. Even with future rate increases, I think you can see that your premium is very tiny compared to the benefits you receive when you keep the 5% compound inflation.

Even if your premium doubled to $190 biweekly, you would pay $148,200 in 30 years vs. the benefits in 30 years of at least 5 years. Per the Society of Actuaries’ 2015 claims study, women who need care longer than a year tend to need care about 4.5 years so that’s why I’m suggesting not reducing below 5 years. This also leaves you room to decrease a little more if you ever need to in the future.

However, if you have Alzheimer’s in your family history, be very sure you want to let the unlimited plan go, because you can’t get it back. The average time someone has Alzheimer’s is 8 years but can be 3-20. A massive stroke can also lead to many years of care. My cousin just passed away at 75 after a major stroke at 61, which left her paralyzed on one side and unable to speak intelligibly.  

 Just remember, you can call LTC Partners at 800-582-3337 and ask for any combination of benefits, not just the ones in your letter.  You can also go to the www.LTCFEDS.com site and use the secure email form. Hope this helps. Phyllis Shelton

Her premium is only increasing 30%, not doubling, so my guess is she will accept the increase this time. The last paragraph in my reply to her is the important takeaway.  The insurance companies have to provide options to reduce premium when a rate increase is implemented with any plan, not just the Federal program, but you aren’t limited to those options. Also, PLEASE DO NOT ACCEPT THE OFFER TO STOP PAYING YOUR PREMIUM AND HAVE BENEFITS PAID EQUAL TO THE PREMIUM YOU HAVE PUT IN AT ANY POINT IN THE FUTURE. This is a very bad deal for you as your benefits will likely last only a few weeks if you just get paid back your premium.

In closing, please allow me to reiterate that the original Federal employee education presentation made it clear that the premiums could go up on the entire group of policyholders if approved by The Office of Personnel Management (OPM) and the Government Accountability Office (GAO). The FLTCIP Benefit Booklet says it now. John Hancock doesn’t think another increase will be necessary based on current information, but of course they can’t guarantee it.

See if this helps your perspective. When you consider that home health aides can cost anywhere from $18-$25 an hour, the really nice assisted living facilities average $5000-$6000 a month, and nursing homes can cost $8000-$12,000 a month, my experience is that most long-term care insurance premium paid in usually amounts to about 10% of a three to four year claim.*

Whew, well that was fun.  I should write a book on the Federal enrollment experience.  Oh wait, I already did. WORKSITETOOLBOX_COVERFINAL

 

 

*when the premium is waived for home care

16 comments

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  1. Sasha

    Hello Phyllis,
    We are considering cancelling our Federal LTC. We have paid in since 40 years old. My husband and I are both 54 years old. We think because of our age, that the premiums will continue to increase drastically before we might be using the LTC. We would not consider future payments of $500/month for LTC insurance. We are concerned only about the other spouse not having enough money left if the other spouse needs to spend time in nursing home. We don’t have children so are not concerned about estate left after both pass. We both will receive FERS annuity upon retirement – about $30,000 each. Together we have 1,500,000 in TSP. Our idea is to get set up so that medicaid will pay as early as possible if something happens to leave as much money as possible to live. Our house is worth around $500k. Any help is greatly appreciated!

    1. Phyllis Shelton

      Sasha, there are several things you need to understand before you consider canceling your Federal LTC Insurance Plan (FLTCIP), and if you have already canceled it, you may be able to get it back if you act quickly. First, when you apply for Medicaid to pay for long-term care, the state looks at your combined assets, regardless of whose name is on the asset. Your state will then divide the assets in half and the healthy spouse keeps half up to about $120,000 this year. The rest of your money will have to be spent down to $2000. Prenups have no bearing on this process. There is a 5 year lookback period to transfer your assets but once you transfer them, you have lost control of them. Is that really what you want? If you use a trust, it has to be irrevocable, meaning it can’t be changed. A revocable living trust won’t help because it can be changed. Also, once you get on Medicaid, you go where the state tells you to go. Medicaid doesn’t cover assisted living and doesn’t cover a lot of home care. Medicaid pays nursing homes less than their private pay charge so nursing homes that are predominantly Medicaid patients just don’t get enough money to do as much for you as a private-pay facility. That’s the way it is today. I can’t imagine being in a Medicaid nursing home 20-30 years from now.

      Rather than think about nursing home care, it seems like home care would be more attractive, at least for the first spouse who needs LTC. The FLTCIP has the best home care benefit as it will pay informal caregivers for your entire benefit period and even family members for a certain period of time. This means you could hire someone whom you trust who isn’t a licensed caregiver and pay less than a home health agency would charge. This person can’t live with you when you are approved for benefits but could move in afterward. How great is that?

      The surviving spouse will likely be safer in an assisted living facility, but not just any assisted living facility. It needs to be a “country-club” assisted living facility. Some of these places are so nice that it’s making claims last longer because people live longer when they are happier. They look nothing like nursing homes and couples can stay together if it comes to that and the facility doesn’t charge double for the healthy spouse to move in. The really great news is that about 80% of assisted living patients don’t transition out to a nursing home. In fact, most people don’t wind up in a nursing home. Of course, you have to be able to pay for the country-club assisted living facility. I think you will find that to be about $5000 a month today ($5500 in your area). In 30 years at 5% compound inflation, that can be about $21,000 a month. The average for women who need care more than a year is 4.7 years and 3.8 years for men who need care more than a year. If you have Alzheimer’s in your family, that time can be much longer. Paying $500 a month for your FLTCIP coverage means you will pay $180,000 in 30 years if one of you doesn’t have a claim prior to that. Look at your benefits and calculate what they will be in 30 years. I think you find the $180,000 to be small next to that number. Premium stops when benefits start. If it makes you feel better, John Hancock doesn’t anticipate another rate increase…at least for a long time. If that is a large concern, there are products that combine long-term care insurance and life insurance that you and your husband can buy with a guaranteed premium. You can buy a joint product for a more cost-effective approach. You can buy separate policies which will leave a death benefit to the surviving spouse if care is not needed. If any of these ideas interest you, you can fill out the short questionnaire on this website and we will be glad to show you these options, with no obligation of course.

  2. Karen Hunt

    Hello, Phyllis – I am a federal employee who must make an election regarding my LTC premium by 09/30/16. I will be 62 in December and plan to work until I am 66. My mother is in great health at 87 but my father’s sisters had dementia (one still alive and well, except for dementia, at age 89). I currently have 3yr benefit period with 5% ACIO. Current premium is $45.74 biweekly but will increase to $80.04 biweekly to keep the same coverage. I am considering reducing to 4.40% ACIO to have a new biweekly premium of $62.89. After I read the posts above I’m sorry I didn’t get a longer benefit period. Should I just pay the increased premium and keep what I have? Any advice? Thanks for your help.

    1. Phyllis Shelton

      Yes Karen you should accept the rate increase if you can afford it with the longevity and dementia in your family history. It’s still a great deal. Your three year benefit period will last longer if you don’t use your entire daily benefit every single day so you need to keep the daily benefit as high as possible with the 5% ACIO. You can use this calculator to see what your daily benefit will be in 25 years and multiply that number by 1095 days to see what your total benefits will be at that time. That number will make your premium look very small. Most of the LTC insurance carriers are gender-rating today which means women pay a lot more. The Federal plan hasn’t done that. John Hancock doesn’t think it will need another rate increase but they can’t guarantee it of course. Remember your premium stops when you have a claim. Make sure that someone who really cares about you knows about your policy in case you aren’t able to tell them when you need it.

  3. Jon Titman

    In 2009 Long Term Care Partners increased premiums 25% across the board. It was to “fix” the actuarial mistakes they’d made when launching the program. 7 years later they raise premiums by a minimum of 83%. The increases are usurious and unscrupulous. If John Hancock couldn’t get the actuarial numbers correct in 14 years, how will they be right in another 7 years? They won’t. Hancock will close the program in 2023 because policy holders will not be able to afford new premium increases. Benefits will be frozen and Hancock may file for a rollback in its payment schedule. The current increases are designed to force out policy holders who are fast approaching the need for the insurance they’ve paid premiums for for many years. They’re retired and on fixed incomes. How in the world can you justify this? I asked the CEO of Long Term Care Partners, the wholly owned subsidiary of Hancock and he couldn’t answer the question either. Without a doubt, OPM fell for Hancock underpricing its policies while you and your staff were out there peddling them. We bought in as soon as the policies became available. That’s 14 years ago. We just retired and our income has dropped, which is totally expected. However, there isn’t a product or service in the world that’s increased 83% in cost in one price hike. This usurious increase could never have been expected or prepared for.

    1. Phyllis Shelton

      The rate increase decision was based on four main things: 1) Actual claims experience – the most recent claims study said women who need LTC longer than a year need an average of 4.7 years of care, whereas men need only 3.8 years. The “country-club” assisted living facilities have made this longer. People live longer when they are happy! 2) The demographic reality that people are living longer, and the longer people live, the more likely they are to file a claim. 3) Low lapse rate which means most people don’t cancel their policies, even when they get rate increases. 4) The low interest rate environment we are in has reduced present and future investment income on the money held in reserve to pay claims. The rate increase in 2009 had to be directly related to how the interest rates tanked. The other thing we can’t forget is that the cost of LTC is growing dramatically as well, facility care much more than home care. I use 5% inflation for the nice assisted living facilities as I believe the demand from the baby boomers used to nice things will keep it high. You can see in the FAQ that John Hancock believes the new rates will be enough to pay future claims and doesn’t anticipate another rate increase but they can’t guarantee that of course because we are living in a very uncertain economy. Yes, 83% is a large jump, but I would encourage you to use this compound calculator to compare the new premiums you will pay with what the benefits will grow to in 20 years. If you absolutely can’t afford the increase, then look at the options to lower your premiums. If you lower the inflation benefit, make sure you can make up the difference between the charge and the daily benefit at claim time. You might be better off to shorten your benefit period if there is room to do that and keep your daily benefit high. As for the amount of the rate increase, our health insurance premium went up 86% over the last couple of years and our carrier is saying another 62% increase this year.

  4. thomas martino

    Hi Phyllis: I, too, am in the Federal LTC plan. I received my increase notice, but before I made a decision I went online and checked out other people’s opinions on the increase. I came upon a consumer affairs website and was shocked to see how many policy holders complained about how difficult it was to receive payment when a loved one was put into a nursing facility. They complained about the endless paperwork and the general incompetence of John Hancock. It seemed that Hancock tries to stall as long as they can to make payments. Can you state your opinion and experience with Hancock and if the federal government is properly looking after their employees and retirees in this matter? Thank you.

    1. Phyllis Shelton

      I’ve only experienced great claims service with John Hancock. I started my insurance career with John Hancock and have had a number of clients on claim and all have been treated fairly. Hope this helps Thomas.

  5. carrie

    I am single, no dependents, and my parents have passed away. I am CSRS, still working with no SS I have had the federal LTCIP since its inception but like everyone else the new monthly premium options offered are all 100-200% more than my current policy. 1) If I decide to keep LTCIP at all, which is the best parameter to reduce – inflation or number of years, or..? I’d already reduced the policy last time from 5 to 3 years as well as reduced the inflation rate. What if every 7 years, I reduce the parameters to the point where the policy is worthless. You don’t mention in your 20-year calculations that JH or whomever will definitely raise the premiums every 7 years and likely at rates higher than this new increase. That’s nearly 3 more adjustments in that time frame. If JH gets out in 7 or 14 years, who will pick up the policies. Am I throwing good money after bad this second time around?
    2) Customer service appears to be abysmal. Even the posted reviews here suggest that the company reps can’t or won’t answer correctly. Reviews for John Hancock are really awful on many sites. How will I be able to negotiate claims for my policy if I am incapacitated physically and/or mentally. The reviews suggest that any advocate has to have the patience of a saint to endure hours of hold on phones, refusals to help, JH endlessly misplacing documents, and consistent claim denials even when the client is clearly designated incapable of self care by numerous physicians. A distant relative, let alone a hired advocate, wouldn’t be able to withstand the frustration placed on them nor be invested enough to care to put up with the nonsense inflicted by such an approach to customer service. Would I ever have a legitimate claim approved for care? It seems unlikely.
    3) Young people are not buying in so this is not, if ever it were, a balanced insurance program in which healthy segments support those that are not. The initial sign-up required no medical exams. The current demographic will have increasingly larger numbers of older and more needy participants putting even more pressure on the vendor to increase premium costs at even greater rates than the current increases. Who regulates this part of the insurance industry and what needs to be done to balance the participants – require LTC insurance of all or what?

    1. Phyllis Shelton

      Hi Carrie – I’m happy to help you if you send me your rate increase letter. The information on the FLTCIP site about the rate increase says John Hancock doesn’t expect to need another rate increase. Of course they can’t guarantee it but we are in an all-time low interest rate environment and the current rate increase happened mainly so they can pay future claims. On the customer service issues I want to point out that customer service for the FLTCIP is handled by Long Term Care Partners in New Hampshire, not by John Hancock directly. However, I started my LTC insurance career in 1988 with John Hancock and have never had a problem with any of the clients I sold in those early days with John Hancock and several have been on claim. As for younger people buying long-term care insurance, many buy when it is offered through their employer, just like the FLTCIP is. A recent case comes to mind of a 23 year old who set up a personal consultation with me to buy LTCi. Of course I asked her why she wanted to buy and her answer was amazing. She said “I don’t ever want to be a burden on my parents.” Very mature young lady.

  6. harlan Hirt

    I talked to customer service and was advised I have only the three given options for inflation protection, 4%(current rate), 2.65% or 0.9%. I was told I cannot negotiate any other factor. Your material suggest otherwise.

    Apparently the option of a shorter benefit period is available, but I did not want to go there.

    1. Phyllis Shelton

      I’m happy to help you Harlan. Please email your rate increase letter to me at phyllis@gotltci.com or fax it to me at 615-590-0307. Please let me know your age and any other geographical area in which you might live if it is other than your present address. Don’t forget to include your phone # so I can contact you. Phyllis Shelton

  7. Shawn Dadisman

    I bought LTCFEDS at age 46, I am now retired at age 60 living near Denver. My policy is for 5 yrs with a 5% inflation option and a current daily benefit of $282. My premium increased from $122.89 to $277.73 monthly! That’s 126% increase. The options they have giving me are to decrease the ACIO from 5% to 3.9% or 2.2%. Premiums would then be $277, $200 or $122 respectively. I did call and ask if I could change other parameters instead of the options they gave me and after being giving incorrect quotes (new policy quotes) was elevated to the 3rd person and finally told that only some parameters could be changed. I can decrease my daily benefit or period but not increase. And I am limited to the inflation percentages that they offered me only (5%, 3.9% and 2.2%). However, they can not give me quotes for inflation decreases and period or daily benefit decreases until I select and submit that option. Then they could run the quote for me with a reduced daily benefit or period. I have assets of $1.1M including my home, TSP, IRAs, savings and a CSRS pension of $65k no SS. I am a widow with no children. My grandmothers lived to be 92 and 99 and lived in nursing homes for about 10 years with dementia. However, both of my parents are in their 90s (90 & 94) without dementia and still at home without care. I’m really not sure what I should do. I’m leaning towards the decrease to 3.9% but that is still a 63% increase. Another +50% increase in 7 years would really be hard to absorb with little wiggle room.

    My last retirement seminar suggested that a 3 year term was adequate and after 3 years medicare would probably keep me in the same place when it kicked in. Do you think that would be wise? I’ve also read that many or most of the insurance companies that started selling LTC insurance have folded and policy owners have lost their benefits. I know that John Hancock was the only bidder on LTCFEDS with a high premium increase this time and also an increase 7 years ago. I’ve invested 14 years with this and $18k and worry that 7 years from now I’ll be in the same boat or worse if no company bids. I honestly thought that LTC was the safe investment but if this high percentage of companies are bailing what makes this not a risky investment. HELP!

    1. Phyllis Shelton

      So let’s talk about what you have. $282 a day x 5 years = $514,650 TODAY. In 20 years at 5% compound, you will have $748 a day x 5 years = $1,365,100! Plus remember your premium stops when you have a claim and your benefits still grow at 5% compound a year. You have paid in $20,645 so far and at the new premium of $277.73 a month, you will pay $66,655 over the next 20 years if you don’t have a claim first. So that’s a total of $87,300 for that $1.3 million in benefits in 20 years. Let’s say you have another rate increase and you wind up paying in $100K by the time you are 80. Are your savings growing at 5% compound guaranteed every year? And how soon would your savings be wiped out if you didn’t have $8,577 in monthly benefits now and about $23,000 a month in benefits 20 years from now? This is why I still say that LTC insurance is the best deal in the country, especially the Federal LTC plan because you have the best home care benefits in the industry since the plan will pay for friends and family members.

      No one has lost their benefits because a company has gone out of business. Whoever told you that is just wrong. One company is in a state receivership and the claims are being paid like clockwork. Denver is a higher cost area and I think you will need every bit of your daily benefit to be private pay when you need care. With the history of dementia and longevity in your family, I think you would be foolish to reduce the benefit period, but if you feel you must lower your premium, that would be the way to do it. Don’t reduce the daily benefit and don’t reduce the inflation. Medicare won’t pay and trust me, you don’t want to wind up on Medicaid with no choices. You might not need care for 30 years, at which time your daily benefit will be $1218 a day and your benefit account will be $2.2 million! A lot of very smart people are predicting the biggest crash we have ever had that will affect stocks, bonds and real estate. Given a choice, I’d rather deal with another 50% increase in my LTC insurance premium than a 50% loss of my savings. There are ways to reposition assets to keep them safe from market downturns and add an additional LTC benefit so you wouldn’t have to accept another rate increase. You can always book at time with me to discuss that at the “Suze” link here. A final thought is how much has our health insurance increased in the last 14 years? Mine has gone from $300 a month to $1670 a month for two people…and my carrier is predicting a 62% increase or 2017! So I think your FLTCIP policy is like gold and I encourage you to hang onto it…Alzheimer’s claims can run into the millions.

  8. nikki schweitzer

    i would like your opinion. i bought $250/day, 5% inflation increase, unlimited time, 8 years ago at age 60. Premium was $526/mo. Two years later, it increased to $710/mo. my premium just went to $1600+, more than double. I am now at $450 a day and live in San Diego. I have been offered ther stable premium of $710 if I reduce my inflation factor to 2.2% I have been told that I am over insured and that this is a good deal for me. What do you think. I can’t express how angry I am because I bought through the federal plan with the understanding that OPM would protect me from large increase. My husband’s plan with Genworth has not had any increase in 15 years, and my friend sells for Mass Mutual and they haven’t had any since he has started working for them. I fear another increase in 7 years when the contract needs to be renewed. Since I am now consdierably older, and there are different health concerns, I don’t think I could get a decent policy even though I don’t have any illness. Thanks for your help. Nikki

    1. Phyllis Shelton

      I’m glad you contacted me. Using $6000 a month today for a really nice assisted living facility in San Diego and inflating that at 5% compound means it could cost $12,500 a month in 15 years when you are 85. Your $450 daily benefit is equivalent to $13,600 a month today. So you are fine for an assisted living facility. A nursing home will be more like $18,500 a month in 15 years, if you need it as a last resort. You can certainly reduce the inflation to 2.2% and your current benefit will still grow to $18,800 a month in 15 years, which gives you full coverage for facility or home care.The Federal program has the best home care benefits in the industry with the phenomenal coverage for informal caregivers. You also have room to reduce your unlimited benefit to maybe 5 years to lower the premium, but don’t do that if you have Alzheimer’s in your family history. Do go ahead and reduce the inflation to 2.2%. If you have the resources to make up more of the cost, you can consider reducing the daily benefit. You don’t have to accept just what you are offered in the letter. You can always call 800-582-3337 and ask for different options.

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