Portions of LTC Insurance May Be a Tax Deduction

As individuals get set to work on their taxes, there is some good news for consumers.

Consumers should check with their tax advisor if they have long term care insurance. Individuals may be able to deduct a big chunk of their 2009 premiums.

What if they don't have long term care insurance? Then consider getting it NOW to lock in tax benefits next year. Uncle Sam may in effect pick up the tab for much of one's premiums for 2010.

According to the Internal Revenue Service, for individuals the amounts of long term care insurance premiums that are deductible as medical expenses in 2009 can be as high as:

A. $3,980 if you're 70 or over

B. $3,180 if you're over 60 but not over 70

C. $1,190 if you're over 50 but not over 60

D. $600 if you're over 40 but not over 50

E. $320 if you're 40 or under

For individuals, the amounts deductible as medical expenses in 2010 can be as high as:

A. $4,110 if you're 70 or over

B. $3,290 if you're over 60 but not over 70

C. $1,230 if you're over 50 but not over 60

D. $620 if you're over 40 but not over 50

E. $330 if you're 40 or under

Additional potential benefits, beyond the above federal deductions, include:

A. If your state offers tax deductions or rebates, and you qualify, these are additive to your federal deduction, if you qualify.

B. When a policy is designed to pay on a per-diem basis, a limited portion of the benefits may be excluded from taxable income.

C. When a policy is paid for out of a Health Savings Account (HSA), there can be tax advantages.

D. For businesses, there are tax breaks that can be especially attractive. For example, opportunities exist for some business owners to deduct premiums without having to satisfy the 7.5% medical expense threshold amount.

Research Paper Says Consumers Lose with Proposed Health Care Reform Bills

According to a new research paper, patients are the losers in both the Democratic and Republican versions of the health care reform bills. The study says proposed health care reform won't help patients find out how much health care costs before they get care and many hospitals aren't set up to help.

A new research paper from The Healthcare Blue Book (www.healthcarebluebook.com) entitled Surgery Pricing Secrets: The Challenges Patients Face, shows that it is almost impossible to get prices ahead of time if a patient plans to have surgery in a hospital.

Healthcare Blue Book researchers found that:

A. It took three times as many phone calls and four times as long to get pricing information from a hospital.

B. Hospitals would not provide guaranteed prices and price ranges often varied by more than 100%.

C. ASCs were more likely to discount prices for cash customers; regardless of the patient's financial status.

D. Facility fees are 3-4 times higher in a hospital than in an ASC.

Healthcare Blue Book researchers contacted hospitals and ambulatory care centers (ASCs) in three markets: Raleigh-Durham, NC; Denver, CO; and Portland, OR. Hospitals and ASCs were asked to provide the costs of an anterior cruciate ligament surgery of the knee for a patient without health insurance.

Queries were primarily about facility fees, but researchers also asked respondents about other fees associated with the surgery.

It's almost certain health care expenditures, which totaled about $2.5 trillion in 2009, will continue to climb by at least 6% a year. Hospital costs are 31% of the total according to the Centers for Medicare and Medicaid Services. So what are health care consumers going to do?

The Healthcare Blue Book, an Internet content provider, offers a free consumer guide to fair pricing for healthcare treatments and services for local markets at www.healthcarebluebook.com.

"One of the main tenets of successful healthcare reform will be patients taking more responsibility for finding out what their care costs as they make treatment decisions," said Dr. Jeffrey Rice, Healthcare Blue Book CEO, and white paper author. "But until hospitals are able to provide exact pricing, managing out of pocket costs for both insured and self-pay patients is almost impossible."

National Median Car Insurance Rate for 6-Month Policy over $700

The national median car insurance rate for a six-month policy is currently (Feb. 2010) $702 according to InsWeb, an online insurance comparison provider. This rate has fallen about 0.5 percent over the last six months.

InsWeb also released national median rate data for specific demographic groups including men, women, and age groups ranging from teenagers to seniors.

The company currently reports that women pay a median car insurance rate that is about 5 percent lower than men, or $683 compared to $720 for a six-month policy. Additionally, drivers age 19 and younger pay the highest median rate -- nearly $1,300. That is more than double that of the group with the lowest reported median rate, those ages 60 to74, who pay a median rate of $596.

"While much of what determines a driver's auto insurance rate is beyond his or her control, many are still paying more than they have to," said Brad Cooper, senior vice president at InsWeb.