Long Term Care Insurance is Changing
For many years the federal government and various states have provided incentives for individuals to purchase Long Term Care insurance (LTC). Last year Washington state lead the way in taxing those that did not own LTC. Now twelve new states, California being one of them are looking into taxing you if you do not purchase LTC.
Of the twelve states California and New York are the closest to putting into operation a tax if you do not own LTC on your own. California is looking into several options but it appears the most likely will be similar to Washingtons.
Washingtons plan has a state benefit of $36,500 of lifetime benefits. The 2022 median cost of a private long-term care facility in California is $146,000/year or $400/day. As you can plainly see the state benefits fall drastically short of what is needed. This is not counting home care where 4 out 5 people would prefer to have their care, as opposed to a nursing home environment. Home care costs average $18,000 to $20,000per month for 24/7.
The Washington plan used wages for premium assessment to include salary or hourly wages; the cash value of gifts, goods, or services, including meals and lodging; commissions or piecework; bonuses; holiday pay and other employer-paid time off; separation pay; and stipends or per diems.
California is looking to do something very similar. The passage of AB 567 established the Long Term Care Insurance Task Force in the California Department of Insurance to explore the feasibility of developing and implementing a culturally competent statewide insurance program for long-term care services and supports.
At this time it might be prudent to explore your options pertaining to long term care and how it will protect against the emotional, physical and financial consequences to you and your family.
If you would like to set up call to discuss the choices available to you, please either call me at 818-802-0686 or use my calendar link below to schedule a quick call.