|
What is Long-Term Care?
IRS Increases Limits for LTCI Premium Deductions in 2005 (November 28, 2006)
Long-term care involves a wide variety of services for people with a prolonged physical illness, disability or cognitive disorder (such as Alzheimer's disease). Long-term care is not one service, but many different services aimed at helping people with chronic conditions compensate for limitations in their ability to function independently. Long-term care differs from traditional medical care as it is designed to assist a person to maintain his or her level of functioning, as opposed to care or services that are designed to rehabilitate or correct certain medical problems. Long-term care services may include, but are not limited to, help with daily activities at home, such as bathing and dressing respite care, home health care, adult day care, and care in a nursing home.
Person’s wit physical illnesses or disabilities often need hands-on assistance with activities of daily living. Persons with cognitive impairments generally need supervision, protection or verbal reminders to accomplish everyday activities.
The delivery mechanism for long-term are services are changing very rapidly; however, skilled are and personal care remain the most common terms used to describe long-term care and the level of care a person may need.
Skilled care is generally needed for medical conditions that require care by skilled medical personnel, such as registered nurses or professional therapists. This care is usually provided 24 hours a day, is ordered by a physician, and involves a treatment plan. Skilled care is generally provided in a nursing home, but may also be provided in other settings such as the patient's home with help from visiting nurses or therapists.
Source: A Shopper's Guide To Long-Term Care Insurance, published by National Association of Insurance Commissioners
Most of us protect ourselves against the risk of losing our house to a fire, or being in an auto accident… but often overlook the much greater threat of financial ruin from being uninsured against the cost of Long Term Care coverage! The statistics speak for themselves:
- 1 in 1200 chance of losing your house to a fire
- 1 in 240 chance of being involved in a serious accident
- 1 in 4 chance of needing Long Term Care for at least a year after the age of 65 On average, Medicare pays less than 2% of Nursing home expenses – costs that can exceed $40,000 per year, and are expected to increase to $78,000 by the year 2010!! Care in your home can be just as expensive, with strict eligibility requirements for Medicare reimbursement.
- Medical plans and Medicare are designed to primarily cover skilled, not custodial care.
- Disability plans are designed to replace income, not cover extraordinary Long Term Care expenses 40% of those who need long term care are working adults who need care because of stroke, heart disease, disabling injuries and mental impairments. The results could be financially devastating. More than 75% of those who receive nursing home care become impoverished in just one year.
IRS Increases Limits for LTCI Premium Deductions in 2005
Individual taxpayers who itemize may deduct more of the cost of their eligible LTCi premiums as a medical expense nest year. Beginning on January 1, 2005, the new levels will be:
Attained Age Before Close
of Limitation on Premiums: |
Taxable Year:
2005 |
Taxable Year:
2004 |
40 or less |
$270 |
$260 |
More than 40 but not more than 50 |
$510 |
$490 |
More than 50, but not more than 60 |
$1,020 |
$980 |
More than 60, but not more than 70 |
$2,720 |
$2,600 |
More than 70 |
$3,400 |
$3,250 |
[Top of Page]
[Return to Newsroom]
|
