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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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.

 

Decisions about Health Care Insurance begin at the kitchen table

The most common misunderstanding about advance care health planning may be that it requires consulting with an attorney and the creation of numerous complex legal documents. In reality, advance planning starts at the kitchen table, with a thoughtful conversation with your spouse and/or family members.

Focus on advance care planning, talking about how you want your health care needs handled, financially as well as physically, and from there, move on to a discussion about a living will, a will and burial decisions. Then you are ready to speak with a Health Care Insurance advisor to set up a health care plan that meets your needs, and an attorney to take care of your will.

Yes, some of the topics may be uncomfortable to talk about. Studies show most people would rather indefinitely postpone these conversations, rather than have them. But all it takes is one cautionary tale from someone like me, a Health Care Insurance advisor, to realize delaying is not the answer.

Claire and Rich, both in their 50s, sat down with me and talked for about an hour and a half about Long-Term (LTC) and Short-Term (STC) Health Care policies. They agreed that having both a LTC and STC policy could help them, but decided to take a few days to think through some of the plans I showed them.

When I checked back with them, Claire had decided to postpone their decision for a couple of months, until after the holidays.

Unfortunately, Rich had a stroke about a month later, and was unable to buy the Short-Term Care policy that would have helped Claire pay for his home health care and nursing home care needs while he was recovering. Like many stroke victims, Rich lived, but will now be ineligible for Long-Term and Short-Term Care policies because of his pre-existing condition.

I was still able to help Claire, but felt very badly not to have been able to help Rich as well.

 Unfortunately, most of us don’t want to think about end of life and critical care health needs – often waiting too long – until after something devastating happens.

This is the reason I’m so passionate about health care insurance! I want to make sure you don’t get caught up in a crisis situation like Claire and Rich did. Both LTC and STC health insurance needs to be decided upon WHILE YOU ARE HEALTHY.

Together, let’s make your future health care decisions a priority, beginning at your kitchen table.

~ Elise

Short-Term or Long-Term Care insurance – what’s the dif?

Insurance is for filling in gaps. In the case of Long-Term Care insurance, it’s for helping you pay costs NOT covered by:

  • health insurance at your job
  • health insurance you purchase privately
  • hospital insurance policies you buy
  • Medicare

The “long term” in Long-Term Care means just that, long. Extended. Chronic.  In fact, the Free Dictionary defines long-term care as “the provision of medical, social, and personal care services…to persons with chronic physical or mental disorders.”

What classifies your condition as “chronic” and allows you to claim benefits from an Indiana Long-Term Care insurance policy?  You must meet one of these two criteria, as certified by a physician:

  1. For a period of at least 90 days you have been unable to perform at least two Activities of Daily Living (ADLs)
  2. You are suffering from severe cognitive impairment.

In the real world, of course, illnesses are often critical rather than chronic. And even though traditional health insurance does cover cancer, heart attacks, kidney failure, stroke, and even a major organ transplant, rarely are all costs covered. While bills are coming in fast and furious and claims are taking forever to be approved, your illness can cause financial devastation.

That’s when Short-Term Care Insurance is there to deliver a cash benefit when you need it most, paying you benefits over and above any other medical insurance or disability insurance.

Short-Term and Long-Term Care insurance – each has its gap-filling protective function to perform exactly when needed.  But that’s the thing – insurance must be purchased BEFORE it is needed.  Knowing you’re protected allows you to focus on recovery!

For more information on health insurance options, click HERE.

~ Elise

Long-Term Care insurance = being prepared for the future

Many of us think that if we have life insurance, Living Will, employer health insurance or private health, or Medicare, we’re all set. But unfortunately, that’s just not the case. I’ve seen what unexpected health crises can do when there hasn’t been forethought and planning, and it’s not pretty. In this regard, my insurance CLTC certification and training are important, but just as important is my 25 years of experience.

Because I know what CAN happen, I know how to protect you from as many potential problems as possible. As the co-founder of Your LTC Resource, my job is to assure that singles, couples and families are protected in as many ways as possible when it comes to their future healthcare needs.

That phrase “as many ways as possible” is incredibly important. We can’t know what our future mental or physical health will be. That’s why we need to have Long-Term Care insurance that is flexible as well as responsible.

Being flexible means both Long-Term and Short-Term Care insurance. It means taking a good look at your present health insurance policies, and finding the gaps. The more planning we do, the better prepared you’ll be for every health and financial contingency.

When you do our Long-Term Care planning homework, the payoff in your future is well worth the time.

~ Elise