4)When To Use Medicaid to Pay For Long-Term Care. Medicaid should be used as a last resort to pay for long-term care. However, in some cases, it may be the only option to protect family assets. Medicaid will pay for long-term care, but certain criteria must be met. It is important to seek the advice of a qualified financial professional and an elder law attorney prior to applying for Medicaid.
5) Important Considerations When Choosing a Long-Term Care Plan.'
A. Ratings: The recommendation is to choose a company with an AM BEST rating of A+ or better.
B. Assets: The assets of the insurance company should be in the BILLIONS.
C. Discounts: Some long-term care insurers will allow for group discounts through employers, or “affinity” group discounts through a local organization.
D. Tax Considerations: There are some tax advantages regarding tax-qualified long-term care insurance plans. At the federal level, premiums for long-term care insurance fall into the “medical expense” category. On the state level, 26 states offer some form of deduction or tax credit for long-term care insurance premiums. It is important to talk to a tax advisor or accountant for that information, as it changes every year.
6)Annuity-Based Long-Term Care & The Pension Protection Act. On August 17, 2006, the President signed into law The Pension Protection Act of 2006 (the “Act”). Individuals owning annuity contracts can now have long-term care riders with special tax advantages. The Act allows the cash value of annuity contracts to be used to pay premiums on long-term care contracts.
7)Asset-Based Long -Term Care Solutions. The ideal planning approach for individuals who choose to self-insure is to “invest” some of their legacy assets in such a way that the assets can be worth as much as possible whenever they may be needed to pay for care...in the home, assisted living facility, or nursing home. If not needed, the money would then pass to the intended heirs, with no “use it or lose it” issues as with conventional long-term care insurance.