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2016 Long-Term Care Insurance Tax Deductions

Posted by David Ross on Sat, Apr 08, 2017

Long-term care insurance tips and tax deductions. Contact us for long-term care insurance in Reading, Harrisburg, Allentown, Lancaster, Philadelphia, Pittsburgh, PA and beyond.There’s a good chance you’ve heard that long-term care insurance should be a part of everyone’s financial planning.

A long-term care insurance policy helps pay for the care you need when you become unable to care for yourself. It can protect your family's financial future and your investments and savings, and is therefore an important element in a well designed health insurance strategy.

What long-term care insurance covers

Long-term insurance benefits pay for services that include personal care such as bathing, dressing, eating, using the bathroom, moving around, or getting in or out of a bed or a chair. The help could be administered at your home or a variety of other facilities.

Long-term insurance rates vary depending on individual factors:
• How old you are when you apply for it
• The maximum amount that the policy will cover per day
• The highest number of days, months, or years that the policy will provide benefits
• The lifetime maximum amount
• Any options that you choose (increasing benefits with inflation, for instance)

Since most long-term policies require medical underwriting, you may not even qualify for the protection if you are in bad health. Sometimes, however, you can get group coverage that requires no underwriting, or you might be able to purchase an individual policy with limited coverage or at higher rates.

Good news from the IRS on long-term care insurance

The Internal Revenue Service (IRS) has announced that it is increasing the amount taxpayers can deduct from their 2016 income for long-term care insurance premiums.

Premiums for qualified long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses, exceed 10 percent of the insured's adjusted gross income, or 7.5 percent for taxpayers 65 and older (through 2016).

The premiums, which are the amount a policyholder pays the insurance company, are deductible for the taxpayer, spouse, and other dependents. Self-employed individuals take note: Your rules are different. You can take the amount of the premium as a deduction just as long as you made a net profit. And your medical expenses do not have to exceed a certain percentage of your income.

One caveat, depending on the taxpayer’s age, there is a limit on how much of the premium may be deducted. The IRS does not consider any premium amounts for the year that are above these limits to be a medical expense.

Here are the deductibility limits for 2016:

Age before the end of the year
40 or less: $390
41 to 50: $730
51 to 60: $1,460
61 to 70: $3,900
71 and up: $4,870

How to receive the long-term care insurance tax deduction:

You must itemize your deductions on your federal return to receive the long-term care insurance tax deduction. Your long term care insurance premiums are added in to your other unreimbursed medical expenses. To get a tax deduction, you must have unreimbursed medical expenses that exceed 10% (7.5% for 65 and older) of your adjusted gross income. If so, you may deduct up to the age-based limits shown above.

We can help you select the right long-term care insurance

Contact us for help in selecting the right long-term care insurance policy.It’s never a bad time to review your financial plan, and with the IRS giving you an added incentive, you should take the time to consider long-term care insurance as part of your plan for 2017.

Contact American Insuring Group online, or call us at (800) 947-1270 or (610) 775-3848, and get all the details on this essential coverage.

Tags: Long Term Care Insurance, Health Insurance, Health Insurance Allentown, Health Insurance Reading PA, Health Insurance Philadelphia, Health Insurance Lancaster

Medicare Vs. Long Term Care Insurance

Posted by David Ross on Mon, Oct 24, 2016

Tips for controlling your long term care health insurance costs throughout Pennsylvania, including Reading, Philadelphia, Lancaster, York, Harrisburg, Allentown, Lehigh Valley, Pottstown, Pittsburgh, Erie, PA and beyond.Most medical statistics that you read or hear about are not designed to brighten your day.

Well, here’s another one: Once you reach the Medicare-eligible age of 65, you have a seven in ten chance of needing long-term care at some future point. A good long term health care insurance policy can provide both peace of mind and valuable protection against the high cost of care. 

Long term care may be provided be at home, in a skilled nursing facility, or in assisted living. It is a surprise to many that the average annual cost of care in a nursing home is a whopping $81,000 for a semi-private room or $90,500 for a private room. Those are national averages, but you can expect similar costs in Philadelphia, Allentown, Reading, Lancaster, Harrisburg, Pittsburgh and elsewhere throughout Pennsylvania.

“Well, so what?” You’re probably thinking. “I might have underestimated the cost of long-term care, but my Medicare will be there to foot the bill.” Well, maybe not

Medicare Falls Short When It Comes to Long-Term Care

It's wise to consider long-term care insurance to supplement Medicare. Here's why: If you are recovering from an acute illness, condition or injury, Medicare will cover the services performed by a skilled medical professional. Your physician must certify to Medicare that these specialized services are necessary and that you are required to be housebound to receive these services. Any custodial care--bathing, eating, dressing, etc.--will be covered by Medicare only if the care accompanies your need for skilled acute care and is concurrent with it.

If you require long-term care in a nursing facility, Medicare will pay at least a portion of your care for up to 100 days, but only after you have satisfied a hospital stay of at least three days and you still need daily medical attention. For instance, physical therapy following a joint replacement or wound care after surgery would qualify.

Note: Medicare will cover 100% of your full costs for the first 20 days only. You are responsible for a co-payment of $157.50 per day on days 21 through 100. If you have Medicare Supplement insurance, it will pick up this co-payment. After 100 days of skilled nursing care, you are on your own for all costs. 

Why the confusion over Medicare?

Much of the misunderstanding arises because Medicare helps to cover certain services at home, but only if these services are medically necessary due to an acute medical need. But Medicare specifically excludes from coverage custodial care from chronic and disabling illnesses. As previously noted, custodial care refers to ongoing assistance with the activities of daily living such as bathing, eating, dressing and toileting. Skilled acute care and custodial care are decidedly different, yet skilled nursing facilities and home care agencies provide each type of care, which just adds to the confusion.

What about Medicaid?

People often do not distinguish between Medicaid and Medicare. Medicaid does cover 100% of long-term care custodial costs within a state licensed and certified Medicaid nursing facility. But Medicaid is a program for individuals and families with low income and insufficient resources to pay for health care. Additional confusion comes from not knowing this distinction.

You are responsible for your health care

Long term care can deplete your assets and shift the burden to your loved ones. You can ease these costs by properly planning for your future long-term care insurance needs. Doing so will help to preserve your savings and assets while providing you with options for the type of care that best meets your needs, whether it’s assisted living or in-home care. 

 

Contact Us for Help in Evaluating Your Long-Term Care Insurance Needs 

Contact us for help in evaluating your long term care insurance needsSeek professional assistance before planning for your long-term care. There are a variety of policies from which to choose, from traditional long-term care insurance to hybrid plans that will return your premium should you not need care. There are also decisions to be made within each policy type that may require expert advice.

To learn more about long-term care insurance, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848. Call or click today to get started!

Tags: Long Term Care Insurance, Health Insurance, Health Insurance Allentown, Health Insurance Reading PA, Health Insurance Philadelphia, Health Insurance Lancaster, Health Insurance Harrisburg, Business Insurance, Commercial Insurance

Paying for Long-Term Care Insurance: Myth vs. Fact

Posted by David Ross on Fri, Apr 01, 2016

Affordable long term care insurance in Philadelphia, Allentown, Lehigh Valley, Harrisburg, Lancaster, Pittsburgh, Erie, PA and beyond.Need something to jolt you awake faster than your morning espresso? Try these government statistics: About 70 percent of people over age 65 will need some type of long-term care during their lifetime, and more than 40 percent will need care in a nursing home at some point.

If you’re one of the many Americans who are not overly concerned about long term care insurance because you believe your kindly Uncle Sam will foot the bill, you should continue reading. 

What is Long-Term Health Care?

When someone requires help with physical or emotional needs over an extended period, this is long-term care. It involves a variety of services—from bathing and dressing to managing money--designed to meet these needs for a short time (several weeks or months) or a much longer period. These services help people live as independently and safely as possible when they can no longer perform everyday activities on their own.

Who Will Likely Need It?

While no one can predict how much or what type of long-term care insurance a person might require, there are several factors that can increase the chance of needing it:

  • Age: The risk increases as people get older.
  • Gender: Because women live longer, they are at a higher risk than men.
  • Marital status: Single people are more likely than married people to need care.
  • Lifestyle: Poor diet and lack of exercise can increase a person's risk.
  • Health and family history: These factors also affect risk.

How to Pay for Long Term Care — the Myths

  • Family members: Depending on a person's needs, long-term care can be provided at home by unpaid family members and friends. This option is becoming less reliable, however, as the ratio of available help for each aging family member continues to fall. Today there are about seven potential caregivers for one eighty-year-old requiring long-term care. By 2030 that ratio is expected to fall to 4-to-1 and by 2050 it could be as low as 3-to-1.

  • Medicare: Many people mistakenly assume that Medicare will cover most long-term care costs. And while it does pay for some part-time services for people who are homebound and for short-term skilled nursing care, it does not cover ongoing personal care at home, like help with bathing, dressing, and eating. It may cover the first 100 days in a nursing home, but there will be some hefty co-payments, and nothing will be covered after that.

  • Medicaid: This Federal and State health insurance program for people with limited income and resources can provide help only if you have less than $2000 in assets.

  • Medicare supplement policies: These are not designed to meet long-term care needs, but some policies do cover co-payments for nursing home stays that qualify for Medicare coverage.

  • Reverse mortgages: People who are considering tapping their home’s equity through a reverse mortgage in order to pay long-term care should be aware of the high closing costs, fees, and interest rates. This is not a viable solution for most people.

Long-Term Care Insurance—the Real Solution

Depending on the coverage options you select—from in-home help to nursing home care--long-term health care insurance can help you pay for the care you need. The insurance might also provide payment for adult day care, care coordination (helping you to find appropriate care services) and, in some policies, help pay costs associated with modifying your home so you can continue living in it safely.

Contact Us for Assistance with Long Term Care Insurance

Because the insurance can be set up many ways to pay for a wide range of services and support, it can be complicated. We recommend you spend time with one of our specialists to establish a policy based on your preferences, needs, and budget. Give us a call at (800) 947-1270 or (610) 775-3848.

Tags: Health Insurance Allentown, Long Term Care Insurance, Health Insurance, Health Insurance Philadelphia

Long Term Care Insurance for the Sandwich Generation

Posted by David Ross on Sat, Apr 18, 2015

Welcome to the Sandwich Generation?

PA Long Term Care Insurance Policies. Serving Philadelphia, Lancaster, Reading, York, Allentown, Lehigh Valley, Pittsburgh, Erie, Newcastle, Lebanon, and beyond.Our world is changing.  The “typical” family has changed and people are living much longer due to advances in medicine.  These two ingredients have created a new generation – known as the Sandwich Generation. Gone are the days when a “typical” family consisted of a working husband, a stay-at-home wife and a couple of children.

Today, only 22 percent of all children under 15 are being raised by the “typical” family, according to a report for the Council of Contemporary Families.  Another 23 percent are being raised by a single mother, 7 percent live with a parent who cohabits with an unmarried partner, 3 percent live with a single father, and 3 percent live with grandparents.  In addition, nearly half of all American married couples are dual-career couples according to the Harvard Business Review. 

Plus, people are living longer.  When the 20th century began, life expectancy at birth in America was 47 years.  Today, newborns are expected to live 79 years. If we continue increasing life expectancy at the rate we have been, people will be living to 100 by the end of this century.  This means an increase in the number of aging parents – who are experiencing changing needs - will require some type of assistance.

According to Pew, “Nearly half (47%) of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting a grown child (age 18 or older).” Nearly 30 percent of those aging parents need some type of assistance.

Long Term Care Insurance: Relief for the “Sandwich Generation”

Today, many individuals are responsible for the care of an aging parent.  Some turn to professionals for help – hiring a caregiver or relocating their parents to a facility that can meet their changing needs – but paying for this long-term care can quickly drain your bank account. Long term care insurance can help ease the financial burden.

Here are some average costs of long-term care in the US, according to Longtermcare.gov: 

$205 per day or $6,235 per month for a semi-private room in a nursing home

$229 per day or $6,965 per month for a private room in a nursing home

$3,293 per month for care in an assisted living facility (for a one-bedroom unit)

$21 per hour for a home health aide

$19 per hour for homemaker services

$67 per day for services in an adult day health care center

This financial burden often forces individuals to take it upon themselves to become the primary caregiver for an aging parent.  In fact, more than 65 million Americans are the care giver for an adult family member.  Before deciding to take this route, you should consider all of the “costs” this decision can create.

Financial Costs

There is almost always a financial impact if you become the caregiver.  Nearly half of family caregivers spend more than $5,000 a year on out-of-pocket caregiving expenses, and about a third spend more than $10,000 according to a recent survey. Those who leave the workforce to provide care lose an average of more than $300,000 in income and benefits.

Health Costs

As you focus on the needs of your loved one, it’s very easy to forget to take care of yourself.  About one in five family caregivers believe their health has gotten worse as a result of their responsibilities.  Between 40% and 70% of family caregivers of older adults have significant symptoms of depression. Other common health problems of family caregivers include increased anxiety, heart disease, hypertension, sleep problems and fatigue. Therefore, quality health care insurance coverage is key.

Career Costs

Becoming a primary caregiver can also affect your job.  Consider these statistics for working caregivers: 

• 60% say their duties have had a negative impact on their jobs

• 68% make work accommodations

• 64% arrive late, left early and/or took time off in the middle of the day

• 17% took a leave of absence

• 9% reduced hours or took a less demanding job

• 5% turn down a promotion

Relationship Costs

Being a full-time caregiver can change your family dynamics and put a strain on your relationships with your spouse and children. It can also create stress and conflict with siblings when it comes to topics like financial support and sharing the caregiving responsibilities.

The Solution: Long-term Care Insurance

Providing long-term care to an aging loved one will always be an emotional and often trying experience for families. If you don’t want to become a burden to your family, you should consider long-term care insurance to protect your family’s finances, provide choices, and alleviate many of the “costs” associated with long-term care.  Most importantly, long-term care insurance provides peace of mind for both you and your family. 

Learn more about long-term care insurance. We serve Philadelphia, Reading, Berks County, Allentown, Lehigh Valley, Pittsburgh, Erie, Harrisburg, and beyond with long-term insurance policies.Take the first steps in learning about long-term care planning and find out how solutions like long-term care insurance can protect both you and your family.

For more information, contact American Insuring Group at (800) 947-1270 or (610) 775-3848.  

Tags: Health Insurance Reading PA, Health Insurance Allentown, Health Insurance Harrisburg, Long Term Care Insurance, Health Insurance, Health Insurance Berks County, Health Insurance Philadelphia, Health Insurance Lancaster

How Life Insurance Can Help Field Life’s Curveballs

Posted by David Ross on Sat, Jun 21, 2014

Life Insurance For Lifes CurveballsMost people don’t want to think about life insurance; it’s something they pay for and hope they never use. But, let’s face it - you just never know when life is going to throw you a curveball.  It’s what makes life so incredibly exciting sometimes and so very scary at other times. 

Insurance can help you and your family field many of life’s curveballs, but too many people don’t think about insurance until it’s too late.   Here are three curveballs that the right insurance can help you and your family handle.

Early Death

Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” We are all going to die; fortunately, the odds of dying at a young age are pretty slim.  In fact, the odds of a 25-year-old American dying is about 1 in 3,000; for a 33-year-old, it’s 1 in 1,500; and for a 42-year-old, it’s 1 in 750.  Comforting, right?

What if you have the misfortune of being one of the “1 in”?  If you haven’t planned for this curveball, the financial consequences can be devastating to those you leave behind.  Younger individuals often have additional debt, such as student loans and mortgages.  Many have young children who still have a lifetime of expenses ahead of them.  Life insurance can financially protect your loved ones. 

Long Life

On the flip side of an early death, is living well into your 90’s or 100’s.  Medical advances are allowing people to live longer, healthier lives.  According to data compiled by the Social Security Administration:

  • A man reaching age 65 today can expect to live, on average, until age 84.
  • A woman turning age 65 today can expect to live, on average, until age 86.

And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. Traditionally, most people expected about 15 years of retirement.  Today, it can be 20, 30, or even longer.   This is awesome, right? 

Absolutely - if you’ve prepared for this particular curveball.   A permanent life insurance policy can provide much-needed funds to help supplement your retirement income.  You can also get a long-term care rider on permanent life insurance that can help cover long-term care costs.

Becoming Disabled

Your chances of becoming disabled are probably higher than you think.  According to the Council for Disability awareness:

  • Just over 1 in 4 of today's 20 year-olds will become disabled before they retire.
  • One in eight workers will be disabled for five years or more during their working careers.

Are you prepared this curveball? Probably not.

•       The average group long-term disability claim lasts 34.6 months.

•       5% of working Americans say they could not cover normal living expenses even for a year if their employment income was lost; 38% could not pay their bills for more than 3 months.

The Case for Disability Insurance

Disability insurance is important to help you make ends meet until you’re able to go back to work.  Plus, many life insurance policies allow you to add a disability waiver to cover certain expenses if you become disabled, and some permanent life insurance policies have a premium waiver in the event you become disabled.

Contact us for help in obtaining the right life insurance or disability insurance to help handle life's curveballs.Insurance Protection for Those Curveballs!

American Insuring Group can help protect you and your family from life’s unexpected curveballs.  Contact us by email or give us a call at (800) 947-1270 or (610) 775-3848.

Tags: Life Insurance Berks Pa, Life Insurance Philadelphia Pa, Life Insurance Lancaster Pa, Long Term Care Insurance, Life Insurance Reading PA, Life Insurance Allentown Pa, Life Insurance Harrisburg Pa, Life Insurance York Pa, Disability Insurance, Life Insurance

Is Long Term Care Insurance Right for You?

Posted by David Ross on Sat, Jan 11, 2014

Tips for considering long-term care insurance. We serve Reading, Lancaster, Philadelphia, Allentown, Harrisburg and beyond with health insurance protection. Contact us for a free consultation.Do you want to become a burden to your family? Of course not.

Do you have homeowner’s insurance to protect your home in case of a fire?  Chances are you do.  It’s a very scary thought and – wisely - very few people think twice about protecting themselves against such a possibility. 

Less Than 8% of Adults Have Long Term Care Insurance: Why?

OK, next question… Do you have long term care insurance (LTCI)?  There’s a good chance that your answer is no.  Recent statistics show that less than 8% of U.S. adults and about 10% of seniors have long-term care insurance.  And yet, nearly 10 million people in the U.S. (37% under age 65 and 63% over age 65) needed some form of long-term care in 2000 (see http://longtermcare.gov/ for more information).  It’s estimated that almost 70% of people turning age 65 will need long-term care at some point in their lives. 

Bottom line… Your chances of needing to make a claim for long-term care are considerably higher than making a claim for a fire.

What Exactly is Long Term Care Insurance?

LTCI helps pay the cost of care for seniors or individuals with disabilities if they should ever need it over a long period of time.  It helps pay for the cost of care for individuals unable to perform the basic activities of daily living (ADLs) -- such as bathing, eating, getting in and out of bed, dressing, and going to the bathroom – over a long period of time. 

Depending on the policy, LTCI may cover home care, assisted living, adult daycare, respite care, hospice care, nursing home, and Alzheimer's facilities. Certain policies will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse.

The cost of an LTCI policy is based on:

  • Your age when you purchase the policy
  • The maximum amount that a policy will pay per day
  • The maximum number of days/years that a policy will pay
  • Any optional benefits you choose, such as benefits that are adjusted for inflation

What is the Cost of Long-Term Care and Who Pays for it if You Don’t Have LTCI?

According to the U.S. Department of Health and Human Services, in 2010 the average cost for long-term care was more than $6,000 per month in a nursing home, more than $3,000 per month in an assisted living facility, or $19-$21 per hour for a homemaker or home health aide. 

One of the biggest misconceptions about long-term care is that it’s covered by Medicare.  Medicare only pays for a maximum of 100 days if you need skilled services or rehabilitative care in a nursing home.  It does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services. 

Medicaid pays the largest share of long-term care services, but only applies if your income is below a certain level and you meet minimum state eligibility requirements.

Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances

Benefits of Long-Term Care Insurance

More and more people are purchasing LTCI to protect themselves in the event that they need long-term care.  Some of the benefits include:

  • Ensuring that you will be taken care of should you need long-term care
  • Allowing you to live as independently as possible without burdening your family 
  • Allowing you to spend family time with your children rather than caregiver time
  • Protecting your savings
  • Premiums paid on a long-term care insurance product may be eligible for an income tax deduction

Learn More about LTCI

Contact us to learn more about long-term care insurance for you or your loved ones.If you want to ensure that you can live independently and not become a burden to your family and friends in the event that you need care over a long period of time, give us a call at (800) 947-1270 or (610) 775-3848 or contact us by email.  The sooner the better!

Tags: Health Insurance Reading PA, Health Insurance Allentown, Health Insurance Harrisburg, Long Term Care Insurance, Health Insurance, Health Insurance Berks County, Health Insurance Philadelphia, Health Insurance Lancaster