Long Term Care Insurance Defined
Long Term Care What is Long Term
Care? Someone with a prolonged physical illness, a disability, or a cognitive impairment (such as Alzheimer's disease) often needs long-term care.
Long-term care is different from traditional medical care. It is care that helps one live as he or she is now; it may not help to improve or correct problems. Long-term care services provides help with activities of daily living. It may include home health care, respite care, adult day care, hospice care, care in an assisted living facility or nursing home. Often a care management service is provided which will evaluate your needs and coordinate and monitor the delivery of long-term care services.
Types of Care. One's condition will require either Skilled or Personal care. Skilled care is provided by medical personnel such as registered nurses or
professional therapist. This care must be ordered by a physician and follow a plan of care for 24 hours a day. Personal care (sometimes called custodial care) helps one with activities of daily living
(ADLs). These activities include bathing, eating, dressing, toileting, continence, and transferring.
Long Term Care Insurance is one other way you may pay for long-term
care.This type coverage will pay for some or all of your long-term care services. You can buy Individual Policies or policies through your employer. In shopping individual policies you will find that the benefits
can be quite different from one company to the next. Be sure to shop companies to find what coverage best fits your needs.Your employer may offer a group long term care plan or individual policy at a group
discount.One advantage of an employer group plan is you may not have to meet any medical requirements to get a policy; Although the cost is generally higher with an employer group plan, it can be well worth the
difference if you have medical problems.If you have good health, I would strongly suggest your comparing individual plans to your group sponsored plan.
Types of Policies You Can Buy include "tax qualified" and "non-tax qualified"
Long term care policies.There are important differences between the two types of policies. These differences were created by the Health Insurance Portability and Accountability Act. A federally tax qualified plan offers certain federal income tax advantages. If you have a tax qualified plan and itemize your deductions, you may be able to deduct part or all of the premium you pay for the policy.You may be able to add the premium to your other deductible medical expenses. You may then be able to deduct the amount that is more than 7.5 % of your adjusted gross income.Regardless of which policy you choose, make sure you understand how the benefits and triggers work( see your NAICA shoppers guide to Long-Term Care Insurance for a thorough description of the two policies).
Whether you are considering buying a tax qualified or a non-tax qualified policy, consult with your tax consultant or legal advisor.
Long-term care insurance policies that were purchased before January 1, 1997
(when HIPAA was implemented) were grand fathered in and are considered tax-qualified (TQ) for federal purposes. They will remain tax-qualified if there are no material changes made to them.
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