Americans support federal tax incentives to help them purchase Long-Term Care Insurance. According to the late March 2021 survey from The Associated Press-NORC Center for Public Affairs Research, 61% of respondents want to see these tax breaks, with only 8% opposing.
The AP-NORC poll surveyed 1,114 adults between February 12 through March 3, 2021. Seventy percent of those surveyed also supported the ability to get some long-term care coverage through a MedicareAdvantage or a MedicareSupplement insurance plan.
Health insurance, including Medicareand Medicaresupplements, including MedicareAdvantage, pay little for long-term health care. While most people purchase Long-Term Care Insurance in their 50s, the total number of people doing some is relatively small.
Consumers Unaware of Partnership Benefits
An overwhelming majority of Long-Term Care Insurance specialists (87%) said in an LTC NEWS survey that too few consumers are aware of the Long-Term Care Insurance Partnership Program and available tax incentives that are available for some people. Specialists have also noted in past surveys that many consumers think Long-Term Care Insurance is more expensive than it actually is.
An Associated Press story on this survey said, "Private Long-Term Care Insurance has failed to catch on because premiums are high and preexisting conditions restrictions apply." The story fails to contribute the statement to anyone.
"Many consumers are surprised when they see how affordable LTC Insurance happens to be. Long-Term Care Insurance is custom designed so the consumer, with the help of a specialist, can design a plan that fits their concerns and budget. However, premiums can vary over 100% between insurance companies," said Matt McCann, publisher of LTC NEWS and a specialist who has been in the industry for 21 years.
The good news, according to McCann, is more people are aware of the consequences long-term health care can have on their family and finances. People want a solution.
LTC Insurance Has Tax Incentives and Other Benefits
"While some people are looking to government to provide the solution, they already have set up tax incentives and the partnership program which provides dollar-for-dollar asset protection. Even a small plan can provide robust protection," McCann added.
Long-Term Care Insurance provides choice, and people choose to stay in their homes when they need extended care services.
"Being financially prepared allows seniors to choose where and how they want to age. Long-Term Care Insurance also enables seniors and families to decide where and how the senior wants to receive care," said Alie Johnson, who runs an Amada Senior Care in the Fox Valley area of Chicago.
White House Wants to Expand Funding
The Biden administration is looking at ways to expand Medicaid eligibility for long-term care; however, for families with savings to protect Long-Term Care Insurance remains the solution. President Biden's plan would expand federal funding for Medicaid home- and community-based long-term care by $400 billion. For most middle and upper-middle-class families, it will do nothing.
The President is on record for expanding tax incentives for private Long-Term Care Insurance. There are already some tax incentives in place, and some states offer tax benefits.
Some States Getting Involved
The State of Washington is rolling out a taxpayer-funded long-term care plan for its residents. However, it is hardly long-term care as its benefits provide very little care.
Washington State residents will have up to $36,500 in benefits to pay for care at home and other services once they vest into the program. Long-term care services and support costs are much more expensive and vary depending on where you live. The costs increase yearly with the increasing cost of labor. You can find current and future costs with the LTC NEWS Cost of Care Calculator.
The program is funded with a payroll tax of 0.58 percent on employees. The state will not start to collect the tax until January of 2022 and won't start paying benefits until 2025. Benefits begin at $100 and will be adjusted annually at a rate no greater than the Washington Consumer Price Index.
State residents who own or obtain Long-Term Care Insurance before November 1, 2021, can avoid the tax. A few other states are looking at similar programs.
Washington State is one of 45 states that offer Partnership Long-Term Care Insurance with additional dollar-for-dollar asset protection. Tradition policies will also provide much more benefits, but you must health qualify to obtain coverage in the first place as policies are medically underwritten.
Best Time to Prepare – 40s and 50s
Experts suggest planning in your 40s or 50s when premiums are lower, and your health is usually better. You don't need a survey to understand the consequences long-term health care will have on your family and finances. To avoid the crisis, however, you must be proactive.
More people today understand the consequence of changing health and aging. Yes, long-term care costs drain assets and change lifestyles. Yes, long-term care is a cash flow issue. It is a significant cash flow problem. However, long-term care is also a family problem. Affordable Long-Term Care Insurance addresses both family and finances.
LTC NEWS Offers Resources to Help You Plan
LTC NEWS offers multiple tools and resources to help you research the financial costs and burdens of aging so you can find an affordable solution.
Start your research with The Ultimate Long-Term Care Guide.
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