Regular readers of my blog know I am a big proponent of long-term care (LTC) insurance, the only thing which will pay for private-duty caregiving services that Family inHome Caregiving provides enabling seniors to remain independent in their own homes. It's expensive, with premiums varying based on your age, what type of coverage you want and the term of the policy (the one I bought only has premiums for 10 years--after that you are covered for life with no additional premiums). However, if you can afford it I would urge you to buy it while you are still young and healthy (insurance companies won't cover you with any pre-existing conditions). As April 15 approaches, people are scrambling for ways to save on their taxes--and LTC premiums can save you money if you have enough medical expenses to be able to deduct them on form 1040. Premium costs for LTC insurance, as Barry Dolowich pointed out in his March 23 Tax Tips Column in the Monterey Herald, are deductable and are a tax-advantaged employee benefit if the employer pays the premiums. There is a high threshold. Itemized deductions are age-based amounts that are adjusted for inflation annually and medical expenses in aggregate can only be deducted to the extent that the total exceeds 7.5% of adjusted gross income on Schedule A. If you are self-employed, however, you can deduct 100% of the premiums.
Full LTC coverage kicks in when you are defined as "chronically ill" which, given the definition can simply be a function of age which scales back the activities we all do on a day-to-day basis, but get more difficult with age. Qualified LTC services include diagnostic and preventive care, therapy and rehabilitation. In addition, maintenance and personal care services are included if the insured meets the definition of chronically ill under the tax law, which requires that the insured need help with at least two of six activities of daily living (eating, using the toilet, transferring, bathing, dressing and continence). I have a number of Clients on LTC insurance (although not nearly as many as I would hope for) and it is often a Godsend. Once a Doctor signs off on eligibility, the Client can relax and enjoy private duty caregiving services up to the maximum daily amount chosen under the policy. This amount normally goes up each year with inflation. These funds can also be used for things like adult day care, which helps keep the body healthier and the mind more active.

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