Chances for additional tax advantages for those who own or are considering Long-Term Care Insurance plans have been reduced with the result of the federal mid-term elections giving the Democrats control of the US House with Republicans remaining in control of the US Senate.
Speaking in Florida, Matt McCann, one of the nation's leading experts on long-term care planning and Long-Term Care Insurance, said little change is expected based on the election results.
"Democrats will most likely not pass any additional tax incentives or expand Health Savings Accounts in the House. This would have been a huge benefit for millions who wish to plan for the financial costs and burdens of longevity," said McCann.
McCann said you may see efforts in the House for expansion of Medicare to include some long-term care benefit or one-payor health care. However, these efforts will not see the light of day in the Senate as they actuarially would bust the budget with the high costs for these proposals.
"Even former President Obama's administration understood the federal government was not in the position to pay for every American's future long-term care. Far too many people will require care. However, the federal government has a plan in place that more American's need to be aware of and take advantage of," McCann added.
The federal plan is the Long-Term Care Partnership Program. In 2005, then-President George W. Bush signed the Deficit Reduction Act. Part of that law allowed the states to participate in the partnership program.
States are empowered to develop partnerships using the "dollar for dollar" model. For every dollar that a Long-Term Care Partnership Insurance policy pays out in benefits, a dollar of personal assets can be protected from Medicaid spend down requirements. This encourages residents in the participating states to purchase these special Long-Term Care Insurance policies by providing asset coverage equal to the benefits paid by the policy.
"This allows many American families to safeguard most or all of their assets with smaller and very affordable Long-Term Care Insurance plans. This public-private partnership creates an innovative program offering consumers access to quality, affordable LTC insurance and a way to receive needed quality care without depleting all their assets. This dollar-for-dollar asset protection makes sure you never exhaust all your assets no matter how long a care situation lasts," McCann explained.
McCann said there was some hope that President Trump would be able to get an above-the-line tax deduction through Congress or other tax incentives, including expansion of pre-tax Health Savings Accounts which can be used to pay for Long-Term Care insurance premiums. However, the election results may delay some of these proposals.
"With the current environment in Washington, any major action in these areas may just not happen. However, people don't need to wait for Washington as incentives and plans exist right now, so you can protect your hard-earned savings and reduce the stress and burdens that are otherwise placed on those you love," he added.
There are tax-incentives available right now for those who itemize deductions or who are self-employed or own a business (C or S corporation, LLC, etc.). Some states offer state tax incentives as well.
"People require long-term care services and supports due to illness, accidents or the impact of aging. Caregiving is hard on loved ones and paid care drains savings and adversely impacts income and lifestyle. Planning in advance for a successful future retirement is key to giving you and your family peace-of-mind. You don't need to wait for additional solutions coming from Washington. The plans are available today and they are easy and affordable, especially if you plan prior to retirement," McCann said.
McCann noted there are several types of Long-Term Care Insurance options available. These include traditional plans which can be partnership certified, asset-based plans which include death benefits, and smaller limited duration plans which offer basic coverage with wider underwriting standards.
He said while the best time to plan is when a person is in their 40s or 50s, affordable options are available at older ages.
As one of the leading Long-Term Care Insurance specialists in the country, McCann helps people nationwide with his unique process where they speak with him on the phone while seeing his computer screen on their computer. He works with all the major companies in Long-Term Care and is endorsed by the American Association for Long-Term Care Insurance.
Consumers can learn more and get free quotes from all the major companies: https://mccannltc.net/free-quotes. You can find the cost of care in your state, as well as the availability of partnership plans and tax incentives here: https://www.ltcnews.com/resources/state-information.