Long Term Care Insurance Blog

As the debate over universal health care heats up, LTCI continues to receive far more attention then it used to. Some argue it needs to be further regulated, while others believe their just needs to be more transparency into how policies work.

Last week there was a new piece on long term care insurance in the NY Times, one that takes a stab at answering 5 pretty common questions regarding long term care insurance. These questions included:

• What should I look for in a policy?
• I’m only in my 50s. I don’t need to worry about this insurance yet, right?
• Why should I buy this insurance?
• Don’t Medicare and Medicaid cover long-term care?
• This insurance is expensive. What can I do to get more for my money?

These are all very good issues to address, ones that we get often. Although some of the answers provided in the column lack details, they provide some basic answers for those looking into LTC insurance. We’ve covered many of these topics in past posts, including (click on any of the links to go to that post):

• the medicare medicaid services issue (that is, neither of these services cover long term care under most circumstances.)
• At What Age Should I Purchase Long Term Care Insurance & CLICK HERE
• Reducing Long Term Care Insurance Premiums

Please feel free to contact us anytime you have questions regarding LTCI. You can also read the rest of the NY Times column HERE

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If you are considering a long term care insurance (LTCI) policy you should be aware that there are many ways to save money through discounts offered by insurance companies. These discounts and potential savings include;

• Spouse / Partner - Savings up to 40%
• Preferred Health - Savings up to 20%
• Increase your Deducible - Save up to 10%
• Small Business - Save up to 5%
• Buy Before an Age Change - Savings of 5-10%

Over the next several blogs we will be describing each in more detail. In the meantime if you speak with an insurance professional make sure they are aware of these savings opportunities.

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A short piece on the McKnights blog spells out a growing concern among the community of long term care providers in regards to Obama’s ideas for cuts to Medicare Medicaid services.

Nursing homes, long-term care hospitals and rehabilitation facilities, would see their share of Medicare and Medicaid money reduced by $14.4 billion over the next decade under Obama’s new proposal.

It will very interesting to see what the reactions are to Obama’s plans. What do you think should be done? Does this make a stronger case for having long term care insurance?

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The American Association for Long Term Care Insurance last week released a report summarizing the amount long term care insurance companies paid for long term care claims in 2008.

Insurers paid $8.5 billion in long term care insurance claims for 180,000 U.S. insureds in 2008

There are some very interesting pieces of information to take from the report:

The Association’s study revealed that 30.5% of claims start between ages 70 and 79; some 60.6% after age 80.

While the percentage of claims started after the age of 70 is large, the amount of money saved on yearly premiums for those who purchased insurance for long term care at a younger age is remarkable. Just comparing the two largest claims in 2008, we see a huge difference in long term care premiums.

The largest reported open LTC claim has paid out more than $1.2 million in benefits, the AALTCI says.

The claimant, a woman, bought coverage at age 43 for an annual premium of $1,800. Her claim began just 3 years later and has continued for almost 12 years.

Compare this rate with the following:

The second largest claim was submitted by a woman who bought her LTC insurance policy at age 72, for an annual premium of $12,766. Her claim began 3 years later and has continued for almost 9 years, paying a total of more than $1 million in nursing home benefits.

Purchasing long term care insurance at a younger age can and will save you a lot of money in the long run. Sure, you may be healthy now, but as the above quote suggests, nothing is guaranteed, as the women needed her insurance when she was just 46.

Read the rest of the article HERE where you can also purchase the entire story.

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In recognition of the enormous social and economic impact of long term care and the costs associated with that care, a bill was introduced in the House of Representatives to increase the accessibility of long term care insurance (LTCI) to Americans.

The “Long-Term Care Affordability and Security Act” would would permit LTCI to be included in employer-sponsored cafeteria plans and flexible spending accounts (FSAs), enabling people to pay LTCI premiums using pre-tax dollars.

You can visit govtrack.us to read the full text of the document and track the bill’s progress.

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Managing the cost of long term care. It’s a topic we often discuss here on the Long Term Care Insurance Blog, as we hope to educate and inform everyone about how to deal with both the financial and mental obligations that often fall hand-in-hand with with long term care. This is why we’re constantly browsing the web in search of resources we can share with our readers.

Today we came across an article on the WebMD website titled “How to Help Your Aging Parents without Going Broke“. (If you haven’t seen this site, take a moment to browse it’s huge library of resources.) So it’s not necessarily the most comforting headline, but it does get straight to the point. The article is broken into a couple sections, which are helpful, including “Have the Conversation”, “Get the Right Help”, “How to Save Money”, “Dealing with Alzheimer’s or Dementia” (Although the article goes into more detail about these specific issues, the discussion in the article can be applied to many long term care issues.) and “Paperwork Prep”.

One of the first issues the article tackles is that of your parents financial status. Are they prepared to pay for care out of their own pockets or have they purchased long term care insurance? This is very important, because understanding your parents financial stability (or instability) will greatly impact the type, and ability, to maintain quality long term care.

You can read the full article here. It discusses medicare medicaid services but also provides some input into ways you can lower costs of daily care.

If you have any questions regarding long term care, please don’t hesitate to contact us. We’ve experienced our own family long term care issues and will be happy to share our wealth of history on long term care.

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Long term care insurance is often considered something only those ‘old folks’ have to think about. Obviously this isn’t true, as we’ve stated in a past post, some recent long term care insurance stats contradicting this myth. So I was happy to come across a discussion, directed towards the Generation X crowd, dispel the notion that they are clueless about the future of their health and how it relates to long term care issues. Now, that doesn’t mean they are fully aware of what long term care insurance covers or how it differs from medicare and medicaid, among other issues, but it’s great to see the discussion happening, now, not later. You can read the post here, and make sure to check out the comments.

If you have any questions about long term care, make sure to read our free guide, “Dignity for Life. Five Things You Should Know Before Considering Long Term Care Insurance. (opens in a PDF)

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As reported on by McKnights, a new bill on long term care insurance may change the way people pay, and save, for ltc insurance.

The bill, which Sen. Charles Grassley (R-IA) introduced late last month, would amend the Internal Revenue Code of 1986 to change the way long-term care insurance is offered. It also would provide additional consumer protections for long-term care insurance. AHCA noted that the bill is in line with its comprehensive healthcare reform proposal.

Read the full article HERE. Subscribe to our long term care insurance blog and be the first to hear about this new bill.

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A recent article on Ohio.com points out a growing concern employees have with their employers benefits.

Benefits are taking on a heightened importance for most workers in an economy in recession. They are more actively involved in managing the benefits provided by their employers, says a new study conducted by MetLife Inc.

Employer benefits have always provided a bit of a safety net for employees (as well as being used as a competitive advantage to hire the best canditates for the company themselves.) But as the article states, in the current economy, benefits are more important than ever before, and not just heath care and 401k plans.

The biggest concern, cited by 65 percent of workers, is affording health care in retirement. The second biggest worry was a tie between outliving retirement money and having the money to care for a spouse’s long-term needs, both issues cited by six in 10 participants.

The rising cost of health care is a huge issue, as we’ve stated numerous times. As the housing bubble deflates and large amounts of savings are lost in the (current) stock market, many are worrying about there ability to pay for long term care. While many companies do offer insurance for long term care, many are not aware of the high percentage (nearly 50%) of employees that at some point will be either directly or indirectly (family member) be affected by long term care needs. Not only would offering insurance for long term care insurance as a benefit help ease some employee stress, but there are employer tax benefits to long term care insurance too.

Individuals can also deduct long term care insurance on taxes, as we stated in our last post.

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Back in October we made a quick post regarding business tax deductions for long term care insurance. It was a short post with links to some very helpful resources. On the other hand, many individuals who pay for long term are care insurance are probably wondering if they can, somehow, write off some their own LTC insurance premiums. The answer is yes…

NOTE: before making any decisions regarding what you can, and can’t write off, contact a long term care specialist and find out what can be done.

The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2009. “To encourage individuals to purchase long-term care insurance the federal government and many states offer tax deductions and tax incentives that increase yearly.” explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance (AALTCI).”

Click here to read a comprehensive review of tax deductibility rules and 2008 and 2009 tax limits for individuals and business owners

There is still time to take advantage of tax deductions in 2008 and also benefit from the increased deductible limits next year. The deductible limits under Section 213(d)(10) for eligible long-term care premiums that can be included in the term ‘medical care’ are as follows:

2009 Eligible Long-Term Care Insurance Premiums

Attained Age Before Close of Taxable Year & Max. Limit

• 40 or less: $ 320
• More than 40 but not more than 50 $ 600
• More than 50 but not more than 60 $1,190
• More than 60 but not more than 70 $3,180
• More than 70 $3,980

Source: IRS Revenue Procedure 2008-66 (2009 limits)

More info resources regarding long term care insurance tax write-offs:

• http://www.kiplinger.com/columns/ask/archive/2008/q0814.htm
• http://www.smartmoney.com/personal-finance/insurance/the-smartmoneycom-ltc-insurance-evaluators-12864/#calculator2

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