Are Long-term Health Insurance Premiums Deductible?

Long-term health insurance, also known as long-term care, LTC, insurance are coverages that pay for services and care you need at older ages. Such services are not covered by regular health insurance plans. If you purchase tax-qualified LTC plans, you are able to deduct your premium payments from your earned incomes if your health care expenses exceeds 7.5 percent of your adjusted gross incomes, AGIs.

What Tax-qualified Plans Cover and Don't Cover

• Tax-qualified LTC plans pay for several services such as skilled and non-skilled nursing care, respite care, hospice care and occupational and speech therapy. These plans also cover services provided in facilities such as nursing homes and adult day-care centers. Services you received outside of the United States, in government buildings or related to you doing illegal drugs, alcoholism, acts of war or suicide attempts are not covered by tax-qualified LTC plans.

About Tax-qualified LTC Plans

• If you have tax-qualified LTC plans, benefits are paid to you tax free. You can purchase these plans individually through insurers or your employers may provide LTC coverages as part of its benefit packages. You can access benefits to pay for medical conditions lasting longer than 90 days. You also receive benefits if you need assistance with two or more Activities of Daily Living, ADLs; there are six ADLs in total: eating, dressing, bathing, continence, transference and toileting.

Plan Features

• Tax-qualified LTC plans have options you can add to customize your coverages. Your policies can pay benefits for several years or for the rest of your life. You can receive benefits to pay on a daily or monthly basis, as well. If you want to receive benefits to pay for services provided in homes and in facilities, you can opt for comprehensive plans or you can purchase 'facility only' plans that only pay for services in assisted living facilities, adult day-care centers and similar facilities.

Other Exclusions

• LTC insurance companies generally exclude you from consideration if you apply for coverage and you have certain medical conditions. You are denied if you have Parkinson's and Alzheimer's diseases, Multiple Sclerosis, AIDS or histories of strokes. Insurers also deny you if you need help with some of the ADLs or are currently using LTC services.