BOSTON (CBS) – Long-term care is the care needed for individuals with chronic disabilities. This care could be in the individual’s home or it may mean custodial care in a nursing home.

According to the Census Bureau, about 4% of the 65+ population occupy nursing homes at any given time.

There are only 1.7 million nursing home beds (in about 17,000 nursing homes) and of those only 1.3 million beds are occupied with 70% of the residents relying on Medicaid to pay bills that average $83,000 a year.

The rate of nursing home use increases with age and almost 50% of those 95 and older live in nursing homes.

The cost of long-term care has been increasing at over 4% a year. The national average annual cost of a semi-private room in a nursing home is $75,000, with it costing over $126,000 here in Massachusetts,according to a survey done this spring by GenWorth Financial.

That’s about $345 a day. If your income from your pension and Social Security is about $40,000 a year you will need insurance to provide you with a daily benefit of $235 a day.

The younger you are the cheaper long-term care insurance will be. A 65-year-old couple in good health (you don’t think they want to insure the sick people do you?) can purchase a policy with a 90-day waiting period, a 3 year benefit period, $125 a day benefit for either home care or nursing home care for under $5,000 a year.

Start with your employer to see if they offer LTC insurance in the form of a group policy. Get quotes from reputable insurance companies and compare the policies. I got online with several different companies and the price varied as much as $500 for what appeared to be the same coverage. Two things will affect the cost of your premiums, your age and your health. The older you are the more expensive the policy.

Check out the office of Health and Human Services in Boston for more information.

One more thing: Resources: The National Clearinghouse for Long-Term Care Information and American Association for Long-Term Care Insurance

The cost of LTC is a tax deduction if you itemize. The older you are the larger the deduction. It gets lumped in with your medical expenses.


2014 Long Term Care Insurance Federal Tax Deductible Limits


Taxpayer’s Age At End of Tax Year – Deductible Limit
40 or less $  370
More than 40 but not more than 50 $  700
More than 50 but not more than 60 $1,400
More than 60 but not more than 70 $3,720
More than 70 $4,660

IRS Revenue Procedure: 2013-35

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