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Feb 10, 2015 • Tom Riekse Jr

Long-term care insurance and a wish list for the government


No matter what people think of HealthCare Reform, no one can deny that state and local government has been promoting the purchase of health insurance.  In Illinois, the healthcare marketplace has been advertising the "luck" health plan, showing the costs of not having health insurance through ads like this:



The Luck health plan even has a fake website, .  Pretty clever marketing.

On the other hand, long-term care insurance is not being promoted by the government the way it should.  Here are some helpful suggestions for both federal and state governemnts to increase interest in LTC insurance:

  1. Increase LTC awareness campaigns: While health insurance gets promoted, LTC Insurance is left to be promoted through government websites like .  More people need to be aware that Medicare doesn't cover long-term care.
  2. Reform partnership programs: The long-term care partnership program is a great concept - buy insurance and if you need Medicaid one day those policy benefits will not have been wasted.  However, current offerings are hampered by an automatic inflation requirement which prices products out of reach.  The law should be modified to remove the inflation requirement.
  3. Allow for penalty free withdrawls from qualified retirement plans to pay LTC  premiums.  One idea that might get some traction in Congress this year is to allow for the penalty free withdrawls from IRA's and 401(k) to pay for LTC premiums.  There is already precedent to do this as public safety officers, like police, can do that as part of the Pension Protection Act.  This should be allowed for all people with qualifed plans.
  4. Expand state tax credits for purchase of LTC Insurance. States have a vested interest in having more residents buy LTC Insurance and avoid Medicaid costs.  Tax credits can be an encouragement to do so.
  5. States should appprove carrier requests for inforce premium increases. Nobody likes in force premium increases, but delaying approval of justified adjustments just kicks the can down the road for insurance carriers and threatens the health of the in-foce block for policyholders.

LTC Insurance already has some great government backed support including some tax deductibility. However, it needs more if LTC Insurance is to be more widely bought and sold.



Download the 2015  LTC Insurance tax summary

Tom Riekse Jr

Written by Tom Riekse Jr

Tom Riekse, ChFC, CLU, CEBS is the Managing Director of LTCI Partners, one of the largest national distributors focused on long term-care planning. LTCI Partners works with financial advisors, benefit brokers, associations and anyone else interested in helping protect people against the devastating financial impact of a long-term care event.
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