Tax and the Long-Term Care insurance client

When we work with clients to educate them about the many Long-Term Care health insurance options available, sometimes Ed and I are asked whether LTC expenses, including Long Term Care insurance premiums, are tax deductible.

Understand, planning for long-term care involves a set of carefully thought out decisions, decisions best made with the guidance of an a professional. You need as much information as possible, so you can make educated choices, and it’s natural for you to want to know about tax deductibility as well.

While Ed and I do not offer tax advice (best to check with your own tax adviser for specifics in your own situation), we can give you a general idea of how long term care premiums relate to federal income tax.

  • Tax-qualified LTC insurance premiums are considered a medical expense.
  • Individuals who itemize tax deductions can treat premiums paid for tax-qualified long-term care insurance for themselves, their spouse or any tax dependents (such as parents) as a personal medical expense.
  • The yearly maximum deductible amount for each individual depends on the insured’s attained age at the close of the taxable year. The LTCi premium that exceeds the eligible amount not included as a medical expense.
  • For 2013, for taxpayers age 40 or under, the limit is $360. For those over 40 but under 50, $680. For those more than 50 but less than 60, it’s $1,360, and for those over 60 but under 70, it’s $3,640. For those more than 70, the deductible limit is $4,550.

There are many erroneous ideas about which long-term care expenses can be deducted and which cannot, and the best person to help you comply with the tax regulations is a qualified CPA.

However, as qualified LTC professionals, we wanted to give you a start, and we hope this helps. Have a question we didn’t cover? Link on the blue highlighted words or email us! We’re always happy to help you get the information you need.

~ Elise

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Putting the ‘gold’ in golden years

If you were born between 1944 and 1964, you are a Boomer, and are well aware of how important it is to save for your retirement. Today, the responsibility for retirement saving has shifted from employers to employees, and Social Security provides only a base level of income. Today, it’s up to you to put the “gold” in your “golden years.”

Many Long-Term Care companies survey trends in the marketplace. Among them, Genworth, Inc. did a Financial Reality Check Survey in 2011. 73% of people answering the survey said that they “would not know what to do if they received a call today letting them know that a family member needed long term care.”

The survey also reveals that people value their independence over comfort. For example, did you know that:

  • 8% say they would turn to family for financial support in retirement
  • 11% would move in with family to ensure a comfortable retirement
  • People are 5 times more worried about being a burden than dying, and
  • 78% say they would find it “helpful to talk with a financial professional or specialist about long term care planning” but only 16% have actually had the conversation.*

While it’s tempting to look for the proverbial “pot of gold” at the end of the rainbow and to think or talk about more pleasant things, we all age and most of us end up needing help in some shape or form. It’s not difficult to keep big or small issues from overtaking the golden years! Being prepared with informed decisions based on reviewing long term care protection can mean you’re “gold to go!”

*Genworth, Inc. April 2011 Cost of Care/Financial Reality Check Survey  ~Elise

How to avoid spending your last days in a nursing home

One sentence I’ve yet to have a potential client say is, “When I’m old, I hope to live my last days in a nursing home.”

I hear you loud and clear – that’s not your preference.

As the co-owner of YourLTCresources.net, I’m an extended care professional, and have been for the better part of the past 30 years. Helping you provide for yourself and your family in the ways you want is the best part of my job.

I know nursing home living is not part of your plan, so let’s map out a health care insurance plan that factors in your ideas, your finances, and your family. If you are approaching your 50s, right now is a great time to make key decisions while you are still vital and healthy, and make your preferences known.

I often refer to myself as a “tour guide” in the labyrinth of Long-Term and Short-Term Health Care Insurance options. Navigating that path on behalf of my clients is what I do best. And the best news I have for you is, you have a LOT of choices!

When we sit down to talk, it’s you that will be telling me what’s important to you, and how you want to live out your life. What I do is provide you with options that work with your ideas and your budget. Together we can plan for every health contingency.

You’ve worked hard to set up your life the way you want it to be. Let me help you align your future health and well being in the same way.

~ Elise

What boomers can do about retirement housing options, post market downturn

The May issue of Financial Planning magazine included a great article called Elder Housing Options. As the co-owner of YourLTCresources.net, I thought the article was well-researched, providing all types of data about those of us in middle age, quickly approaching retirement-decision age. As boomers know well, the past several years have not been financially kind to them.

As Financial Planning states, “For boomers, the housing market downturn couldn’t have come at a worse time. A large percentage (of boomers) no longer have the means to buy into appropriate senior-living facilities as they age.”

According to the Federal Reserve, the overall value of real estate owned by U.S. households fell to $17.65 trillion in 2012 from $22.7 trillion in 2006.

“And much of that decline hit boomers the hardest,” said Financial Planning magazine author June Fletcher, “since most were in their peak earning years when the financial meltdown occurred and were living in the largest homes they would ever own.”

Financial Planning magazine recommends doing what is possible now to stretch your retirement housing dollars, for instance:

  • Invest your portfolio more aggressively
  • Lower your taxes (possibly by moving to a state with lower or no state income taxes)
  • Remodel your home to make it more senior-friendly
  • Consider an ECHO home (temporary prefab units on a relative’s property)
  • Get a reverse mortgage (borrowing against the equity of your home)

Investing wisely and downsizing are good ideas. Another sound financial piece of wisdom is to think ahead and prepare for your future now, while you are healthy.

Need information and resources to make informed educated decisions about your future? That’s my specialty and my passion. I can help you learn what Long-Term Care Health Insurance, Critical Care and Short-Term Care Insurance can do to help you protect your financial future.                             ~ Elise

A painful lesson on adding (financial) insult to (health) injury

When I read Christine’s story (click HERE to read), my heart ached for her. The co-founder of the business “The Parent Care Solution,” Christine and her husband Dan created their company together after caring for Dan’s father, who suffered from Alzheimer’s disease.

Even though Christine and Dan, both in their 50s, had worked with dozens of couples who were under-insured and struggling to provide healthcare for an ill spouse, they had not yet invested in Long-Term Care Health Insurance for themselves. As many do, they thought they were too young for any devastating health problems.

Unfortunately, they were wrong. Dan was diagnosed with a brain tumor at age 55  and died just 13 months later. After Dan was diagnosed, he could not buy Long-Term or Short-Term Health Insurance. And as the owners of a small business, Christine and Dan were under-insured with their health insurance. Thirteen months of surgeries, chemotherapy, and hospital stays took their toll not only emotionally on the two, but also financially.

As Christine says, I became painfully aware of how important it is to have a plan during such an emotionally trying time… The longer you wait, the fewer choices you will have and the more it will cost you, emotionally as well as monetarily.”

Nothing could have eased the terrible pain and emotional suffering of this couple. But when it came to financial pain, financial health care planning could have made a big difference. The lesson Christine learned the hard way could be acted upon by you early enough to make a difference in your life and that of your spouse.

It’s just too easy to postpone talking about difficult matters. As the owner of YourLTCresources, I consider it is my personal passion to guide the “Christines and Dans” of this world with the information and resources they need to make informed, educated decisions about their future. I hope you’ll contact me to learn about what Long-Term Care Health Insurance, Critical Care and Short-Term Health Care Insurance can do for you.                                                      ~ Elise

Health costs are skyrocketing. You need additional insurance protection.

AARP keeps telling us this fact, and I keep reminding my clients to pay attention: The U.S. health care system is the most expensive in the world.  AARP’s 2009, 2010, 2011 and 2012 studies all point to just how expensive it can be to have healthcare in our country. What’s more frightening is that medical costs continue to rise each year. Dramatically.

Here are the facts according to reports from both AARP and the American Heart Association:

  • Americans spend an average of $8,200 per person on general health care every year (For comparison, Canadians spend just $4,400 annually).
  • A typical hospital stay costs an average of $236 per day in India, $655 per day in France and a whopping $3,949 per day in the U.S. (2011 Comparative Price Report Medical and Hospital Fees released by the International Federation of Health Plans.)
  • The first day of hospital admission averages $1,246, while the cost of discharging a patient averaged $304.
  • An average hospital stay in the U.S. is about $18,000. In the Netherlands and Japan, the 2nd and 3rd most expensive, comparable costs are $4,000 to $6,000 less.
  • U.S. average hospital charge for coronary artery bypass was $122,743 in 2010.
  • Average U.S. cost of hospitalization for a stroke was $87,600 in the same year.

These prices are averages, and don’t reflect costs paid by health insurance. These prices also only reflect hospital costs. Add your surgeon’s bill, your anesthetist, medications, plus quite often, rehabilitation and home health care, and frequently, nursing home care. Even Medicare or a good general supplemental health plan will only pick up 80% of these costs. (That still leaves a substantial amount on the table to be picked up by YOU!)

Don’t let a health crisis deal a critical blow to your finances. Be ready. Advance care planning is a conversation you need to have with a health insurance professional BEFORE anything happens!

~ Elise

 

 

Indiana health care insurance professional gives ‘boomers’ exactly what they are looking for

We baby boomers are changing the nature of health care planning. With 70 million of us, our dramatic numbers alone are radically altering the world of health care insurance.

As ‘boomers,’ we have high expectations and prefer to leave nothing to chance. We want control of our financial and health planning to ensure we get the type of healthy, dignified, independent, and secure future we have envisioned.

Those of us edging toward retirement plan earlier and plan thoroughly. I enjoy working with pre-retirement clients to plan for all health care contingencies. They are bright, well educated, and expect a long, healthy future with a lot more self-sufficiency and control than their parents had.

If you are a boomer, we should talk. Soon. Because nothing ever goes absolutely according to plan, it’s smart to look ahead, before a health emergency strikes you or your partner.

And, because health care prices continue to go up, health insurance costs continue to rise as well. There’s no better time to lock in rates for Long-Term Care, Short-Term Care and Crisis Care health insurance plans than right now, while you are healthy.

As a health care insurance professional for 26 years and a baby boomer myself, I can help make sure you cover all your health ‘bases’ and get the type of coverage that will leave nothing in your future to chance.

~ Elise

 

What is the difference between Medicaid & Medicare?

As a health insurance professional, I deal with this confusion all the time. Here’s what you need to know:

Although Medicaid and Medicare sound alike and are both government programs, they exist for very different reasons.

  • Medicaid is a federal program, administered by each state. It provides basic health coverage for low-income, financially dependent people. You must qualify for eligibility, which is tied to financial need.
  • Medicare is also a government program. It provides health insurance for people 65 or older, and people under age 65 with certain disabilities. Medicare is not tied to financial need. It is an entitlement program paid for through your Social Security taxes.

Since the U.S. healthcare system is THE MOST EXPENSIVE in the world, it makes sense to find health care insurance that assures you complete health care coverage, even if you have Medicare.

That’s because “having Medicare” will not pay your bills when you:

  • Need financial assistance while you are going through a critical illness. (But having Critical Care Health Insurance will pay you cash.)
  • Require prolonged health care assistance when you are older and in need of assisted living, nursing home care, hospice or home health care (Like Long-Term Care Insurance does.)
  • Need a cash benefit over and above any other medical insurance or disability insurance (As Short-Term Care and Critical CareHealth Insurance will provide).

I am sensitive to the worry I see in my potential clients’ faces when they consider how they want to be cared for, should they face a health crisis. That’s why health insurance advance planning makes good sense.

There is nothing that beats surefooted planning for all possibilities. That helps our clients – and me – rest easier, knowing they are protected.

 

Critical Care Insurance and how it benefits you

People are living much longer lives even after suffering a heart attack, cancer, heart bypass surgery, suffering a stroke, or many other maladies that used to guarantee fatality. No more, thanks to early earlier detection, better prevention and medical advances in serious healthcare treatments.

Unfortunately for many of us, surviving such a catastrophic illness can bring with it serious financial hardships – especially if that illness leads to a prolonged, expensive stay in a nursing home or assisted living facility (or both) while recuperating.

This is where Critical Care Insurance can help. Relatively new to the health care insurance scene, Critical Care Insurance provides monthly cash benefits for at home care, assisted living and nursing home care. The benefits provided progress with the expenses and duration of each level of care.

Here’s how it works. Let’s use Pat as an example:

Before Pat became ill, she purchased a Critical Care Policy with a monthly base benefit of $2,000 with a maximum benefit period of 18 months. Some years later, Pat suffered a stroke. Like many other stroke patients, she required lengthy follow up care.

Here’s how her Critical Care Coverage helped pay Pat’s bills:

  • 3 months in nursing home = $12,000
  • 8 months in assisted living = $24,000
  • 3 months in home care = $6,000

Total Critical Care paid to Pat over the course of 14 months of recovery in various facilities = $42,000.

What’s even better? Twelve months after Pat fully recovered from her stroke, all of her Critical Care Benefits were fully restored. So if Pat suffers from another catastrophic health event, she will be covered again.

If not for her Critical Care policy, that $42 thousand would have had to come from Pat’s retirement savings, the equity in her home –or even from her children. That’s something none of us wants to consider.

As an extended care advisor, I can help you figure out a plan of health insurance that fits you in every way possible. Together, we can choose a plan, a benefit period and a monthly base benefit amount that is right for you. Whether you are 18 or 84, I want to be sure your future health doesn’t cause you a moment’s stress or anxiety.

~ Elise