Living in the housing of your choice as you age requires planning. Too often, families are shocked to learn that Medicare does not pay for long-term Assisted Living or Nursing Care. Thankfully, many long-term care insurance plans can offer help.
However, a study published last month by the journal Health Affairs projected that 54% of the 14.4 million middle-income older adults in 2029 in the United States will lack the financial resources to pay for senior housing and care, and a combination of public and private efforts will be needed to address the looming crisis.
The Trump administration is considering regulatory changes and new tax subsidies to encourage middle-income Americans to buy private long-term care insurance, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
Possible changes, which could be announced later this year, according to the center, include:
- Updating federal rules to allow an expansion of products that combine life insurance or annuities with long-term care insurance.
- Allowing the sale of life or disability policies that convert to long-term care coverage.
- Expanding a tax deduction that consumers could use to buy long-term care policies.
- Creating a new product similar to a health savings account but for long-term care insurance.
- Permitting penalty-free withdrawals from retirement savings accounts for the purchase of long-term care insurance.
The aforementioned ideas under consideration by the federal government, however, “are unlikely to build much interest among those with middle-incomes,” according to the Tax Policy Center, which described the likely changes as “very modest.”
Long-term care insurance plans vary widely. The good plans offer support for families and help avoid spending down a lifetime of earnings. Consider researching these plans and, if at all possible, contact your representatives to let them know of your interest in making these plans more affordable.
Adapted from McKnight Senior Living, May 28, 2019