The market for long-term care (LTC) is expected to grow at an annual rate of 10.5 percent through 2009, with revenues expected to reach $394 billion, according to a new study, The Long Term Care Market: Nursing Homes, Home Care, Hospice Care, and Assisted Living, from Kalorama Information, a division of MarketResearch.com. Fortunately for the consumers and businesses fueling that growth, the Internal Revenue Service (IRS) recently announced increased deductibility levels for long-term care insurance policies purchased in 2006.
“With the average life expectancy in 2009 set to reach 79.1 years, growth is simply a matter of supply and demand as you’ll have so many more older Americans needing some form of care, whether it be full-time skilled nursing or simply home healthcare,” notes Alison Sahoo, author of the final report.
The Government Accountability Office (GAO) found that private insurance, both traditional health insurance and long-term care insurance, accounted for only 11 percent of the long-term care expenditures in 2000. Less than 10 percent of the elderly and even fewer among the near elderly (aged 55 to 64), had purchased long-term care in 2002, although the numbers have been increasing since the 1990’s.
“Many financial professionals, including accountants and planners, are unaware of the rules and limits pertaining to the deductibility of long-term care insurance premiums,” said Jesse Slome, Director of the American Association for Long-Term Care Insurance. He add “millions of Americans, especially those who own small and mid-sized businesses, are completely unaware of the ability to fully deduct the cost of long term care insurance protection.”
For 2006, the deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term “medical care” are:
- $280 for individuals under 40 years of age
- $530 for individuals older than 40 but not older than 50 years of age
- $1,060 for individuals older than 50 but not older than 60 years of age
- $2,830 for individuals older than 60 but not older than 70 years of age
- $3,630 for individuals older than 70 years of age.
The in-depth study examines the trends and issues affecting nursing homes, home care, hospices and assisted living facilities including: regulatory and quality; insurance and managed care; and consumer attitudes, behaviors and preferences. A thorough demographic analysis of the aging population and in-depth profiles of leading long-term care competitors are also included in the report, which can be purchased online from Kalorama Information.