Planning for Long-Term Care in America

Interesting article in Vanity Fair about California pension problems and the difficulty of planning ahead

Michael Lewis, the author of books such as Moneyball, Liar's Poker, The Big Short and The Blind Side, has an good article in the November Vanity Fair about the financial issues affecting California. (Link here) 

The article doesn't discuss long-term care, but it does have a couple of interesting paragraphs and a modern day parable about how it may be more difficult for people to plan for issues such as long-term care due to past affluance and competing issues.  

The Tragic Bungling of a ‘Class’ Act | Moneyland | TIME.com

Article about the lost opportunity of the CLASS Long-term care act in Time Magazine.  As the article mentions, this will not be the last time the issue of LTC is addressed by the government.

The Tragic Bungling of a ‘Class’ Act | Moneyland | TIME.com.

Do you have a spare 3 1/2 hours to view a congressional hearing on long-term care and the CLASS act?

Most people would rather do ANYTHING than have to do that.

However, if you are interested in seeing how Congress views long-term care  insurance and long-term care planning the October 26th House Committee meeting on the CLASS plan is worth viewing.  The hearing includes a general agreement that long-term care financing is a huge issue,but little other agreement. 

After viewing it, I think most people would conclude that there is a necessity to have both private LTC programs and government programs to help with LTC needs.  However, it is very difficult in this partisan environment to find representatives who talk about creating an integrated public - private partnership that might give credit to the other side. The gulf is huge - and that is a shame. 

Here is a link to the hearing:

http://www.c-span.org/Events/Canceled-CLASS-Investigated/10737425046/

 

Long-term care insurance - the non-economic benefits

Interesting study by SunLife about the peace of mind planning brings people.

Annuity, Insurance and LTC Owners Express Greater Retirement Confidence | LifeHealthPro.

New LTC cost survey from MetLife

Unlike health insurance, where it is is difficult easily find the "retail" rate for care costs (such as  a knee replacment), there is a lot of data on LTC costs.   One of the best surveys on LTC costs is from the MetLife Mature Market Institute, and here is a link . 

Here are the key findings:

The national average daily rate for a private room in a nursing home rose 4.4% from $229 in 2010 to $239 in 2011.

The national average monthly base rate in an assisted living community rose 5.6% from $3,293 in 2010 to $3,477 in 2011.

The national average daily rate for adult day services rose 4.5% from $67 in 2010 to $70 in 2011.

The national average hourly rates for home health aides ($21) and homemakers ($19) were unchanged from 2010.

 

The survey leaves some interesting questions.  Why are ALF facility prices going up?  Is it because facilities are going upscale?  Why are home health care costs flat?  Give your comments below...

Best Age To Buy Long-Term Care Insurance? | Fox Business

Article that discusses the ideal age to buy long-term care insurance.

Best Age To Buy Long-Term Care Insurance? | Fox Business.

Demise of Obama long-term care plan leaves gap - Boston.com

Article from the Associated Press that discusses the "gap" in long-term care insurance options.

Demise of Obama long-term care plan leaves gap - Boston.com.

Frankly, the article is kind of surprising since if you google "long-term care insurance" you'll find plenty of private insurance options and people willing to sell you private plans.    It goes to show you that there is much education to be done on explaining how private plans work.

2012 Tax Deductible Limits for LTC Announced

The IRS has announced the 2012 deductible limits under Section 213(d)(10) for eligible long-term care premiums. Remember, each year the deduction can go up, while most premiums remain level  Here they are:

The 2012 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:

Attained Age Before Close of Taxable Year   

40 or less – $   350

More than 40 but not more than 50 – $   660

More than 50 but not more than 60 – $1,310

More than 60 but not more than 70 – $3,500

More than 70 – $4,370

The per-diem limitation under 7702B(d)(4) is $310.

 

For more information on the tax treatment of LTC, visit the AALTCI.org tax section at http://www.aaltci.org/long-term-care-insurance/learning-center/tax-for-business.php

Editorial: Long-term care plan dies, but problem survives – USATODAY.com

Editorial: Long-term care plan dies, but problem survives – USATODAY.com.

CNN News story about the suspension of the CLASS plan

CNN Video on Monday, October 17th about the CLASS Act and planning for long-term care.  In 4:30 minutes, in discusses the issue in a nutshell - people don't realize Medicare doesn't pay for LTC and they need to plan!