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Consumers Want Tax Deduction for LTC Insurance

Wed, 11/08/2000 - 12:00am — Karen Stevenson
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One out of three Americans above the age of 55 believe the single most important action government could take to help families meet their long-term care needs would be to offer tax relief for people who purchase private long-term care insurance, according to a new survey released today by the Health Insurance Association of America (HIAA). They found that more than three in four people who decided not to buy private long-term care insurance would be more interested in doing so if they could deduct the premiums from federal income taxes.

Other key findings of the new HIAA survey include:

  • Most Americans do not believe that the government will pay for most long-term care services within the next 10 years.
  • In 2000, 77% of long-term care insurance policies cover both nursing home and home health care, compared to 37% in 1990.
  • Over the past five years, the average daily nursing home benefit has increased by 28% while average annual premiums have increased only 11%.
  • One-third of all individual long-term care policies sold are purchased by people between the ages of 55 and 64.
  • The median income of current buyers of individual long-term care insurance is $42,500.
  • In 2000, 65% of buyers, and 55% of non-buyers of long-term care insurance believe that they have a greater than 50-50 chance of needing nursing home care. This compares to 26% of buyers, and 25% of non- buyers in 1995.

HIAA's survey of buyers and non-buyers of long-term care in the individual insurance market was conducted by LifePlans, Inc. of Waltham, MA.

One out of three Americans above the age of 55 believe the single most important action government could take to help families meet their long-term care needs would be to offer tax relief for people who purchase private long-term care insurance, according to a new survey released today by the Health Insurance Association of America (HIAA). They found that more than three in four people who decided not to buy private long-term care insurance would be more interested in doing so if they could deduct the premiums from federal income taxes.

Other key findings of the new HIAA survey include:

  • Most Americans do not believe that the government will pay for most long-term care services within the next 10 years.
  • In 2000, 77% of long-term care insurance policies cover both nursing home and home health care, compared to 37% in 1990.
  • Over the past five years, the average daily nursing home benefit has increased by 28% while average annual premiums have increased only 11%.
  • One-third of all individual long-term care policies sold are purchased by people between the ages of 55 and 64.
  • The median income of current buyers of individual long-term care insurance is $42,500.
  • In 2000, 65% of buyers, and 55% of non-buyers of long-term care insurance believe that they have a greater than 50-50 chance of needing nursing home care. This compares to 26% of buyers, and 25% of non- buyers in 1995.

HIAA's survey of buyers and non-buyers of long-term care in the individual insurance market was conducted by LifePlans, Inc. of Waltham, MA.