STILL WAITING FOR MY THANK YOU NOTE!

In the years prior to living in a trailer park and before moving into the rented, single-family home in which I grew up, my brothers and I spent a few years living with my parents…in the home owned by my grandparents…with my grandparents.

Three generations under one roof. This was the early 1960’s, and the standard in northeastern Pennsylvania.

Fifteen years later, this same grandmother – who provided shelter while my parents tried to establish traction with three kids under age 5 – moved “up to the country”, living with my aunt and cousin – ten steps across the yard from us. Mom would go over daily to check Baggy’s (every grandmother has a nickname, don’t they?) blood sugar and routinely give her B-12 shot.

Neighbors shared similar experiences. One family lived with their grandmother, in her home. My best friend (since 1966), and his family, welcomed his grandfather into their home during our junior high and high school years. He lived with them every day thereafter, until his last.

His name was “No-No.”  He was the Man.

Intergenerational living has always been a thing. It continues in neighborhoods across the nation. Without recognition, celebration, or compensation.

In Mom’s final years, she experienced a different kind of intergenerational living. After a life-threatening event and an extended hospitalization, followed by a nursing home stay for rehabilitation, Patrice and I admitted Mom to a home specializing in memory care, where she lived for seven years, until transferring to an in-patient hospice for the days preceding her death.

We took these steps because we – me, Patrice, and my brother, Scott, and his wife, Linda – were unable to provide best care possible for Mom in our own homes.

As Mom had neither the income, nor the net worth, to privately pay for her care, and met the coverage criteria, she would have been immediately eligible for a Medicaid-paid nursing home stay.

But this did not happen.

Alternatively, we chose – and helped pay for – what Mom needed from the time she was unable to care for herself, until she died.

By supplementing Mom’s limited assets and income with an additional $120,000 out-of-pocket (spent over six-and-a-half years) we saved the Commonwealth of Pennsylvania’s Medicaid program – determined by calculating the difference between Mom’s monthly income and an estimated average Medicaid rate paid to a nursing home, then multiplying this amount by the years Mom spent being cared for somewhere else – over $350,000. 

AN $870 BILLION FREE RIDE

I know people who have done what we did, exploring every option to meet their loved one’s needs and paying out of pocket for their care. Unfortunately, I’ve known – or met – thousands of people who did not possess this financial leverage, experiencing massive regret and heartbreak because they couldn’t.

And I know people who are taking care of someone they love – needing help, today, all day, every day – in their own homes. And while they do the right thing for loved ones, lawmakers completely take these caregivers for granted.

Here’s why… 

Based on Morningstar’s March 29, 2023, entitled 100 Must-Know Statistics About Long-Term Care: 2023 Edition, “The number of people in the United States providing care to a person age 50 or older, as of 2020: 41.8 million.”  And in a recent AARP/National Alliance for Caregiving report, 2025 estimates exceed fifty million.

Yes. 5-oh.

These are populations greater than any single state in the U.S. And the gub-mints (plural, state and federal) are getting a massive free ride.

You see, the federal government – and with few exceptions, the states – are experiencing the benefits of free care provided by families, or fully financed privately, rather than by taxpayers.

How big is the ride? A 2024 study estimated the price tag associated with family caregiving exceeds $870 billion annually.

And no one is writing thank you notes.

So…instead of thank you notes, in recognition of tax season and April 15 – when people are permanently separated from their money each year – maybe next year’s legislative agenda should include establishing meaningful tax incentives for people who do the nation, their states, and fellow taxpayers a solid each day, by taking care of their dependent loved ones at home and off the taxpayer payroll.

With the army of accountants, financial analysts, and lawyers employed in government, figuring out how best to do this should not be hard. The architecture is already in place for families, whether it be through the standard deduction for dependents, a tax credit, or some other financial “thank you.” 

Admittedly, this isn’t breakthrough thinking. On the other hand, however, we’re still awaiting the breakthrough. Congress has been to bat – and struck out – with bipartisan/bicameral-supported legislation providing family caregivers with non-refundable tax credits in 2021, 2024, and 2025. Having already achieved the hat trick in this decade, going down swinging in 2026 would earn our elected officials – in baseball terms – the Golden Sombrero.

Will this idea become a four-time loser? Hard to know. If it is, family caregivers remain taken for granted, providing further evidence that lawmakers aren’t serious about how best to provide incentives for the right behavior, use taxpayer funding for its highest and best uses, and optimize access to nursing home beds to those most needy.

AND THE PRICE TO EVERYDAY PEOPLE IS SURE TO INCREASE

Love it or not, the Affordable Care Act increased the number of people with health insurance.

Fact. This law – passed, then subsequently classified as a tax – achieved, at least in part, what it had intended. Years since its enactment, more people have health insurance coverage since before the ACA. Census.gov estimates that 92% - or 310 million – people had health insurance coverage for all or part of 2024.

By this number? Impressive. Now… how about the number of people with long-term care insurance coverage?

About seven million, or 3.3% of the nation’s population. In 2025, estimates pegged the nation’s population over the age of fifty at 124 million.

As a statistic? Unimpressive. As an indicator of the population’s future physical, mental, and financial health?

Disgraceful.

The root cause of this embarrassment doesn’t rest with the consumer. It is purely a function of the existing incentives which – like the case of the family caregiver – fail to recognize, celebrate, or compensate for actions taken or decisions made.

I had the chance to purchase long-term care insurance at 40, almost 25 years ago. Next year, I’ll turn sixty-five. This policy…paid in full. It is the first-round draft choice among monthly discretionary bills. My wife has identical coverage, paid in full a few years ago.

Our incentives, back in 2002? Provide peace of mind and assets which protected other assets traditionally used to finance long-term care – like cash, home equity, and other liquid or hard assets.

It also gave us the ability to receive care at home, for as long as we can endure it, and supplement our care needs provided by family, friends, and private-paid caregivers.

While imperfect, this coverage surely beats the alternatives, including an earlier than desired admission to an institutional setting, like a nursing home.

These were the incentives for two people who have spent a combined eighty years working in healthcare, the vast majority spent working in, and on behalf of, nursing homes.

Candidly, I have friends, family, and colleagues who think long-term care insurance is total bullshit. This is because there is no incentive to think any differently until it is just too…effing…late.

When I was younger, these same people sneered at term (or whole) life or disability insurance, and Individual Retirement Accounts. Contemporaries now eye-roll about buying gold, silver, or Bitcoin. This is predictable, as people view life through an experienced-based lens, with biases of their own.

And yet these same people, who routinely rail about the taxes they pay and the ballooning costs of state and federal programs, seize up at the thought of how they will manage the price of getting old – or becoming sick.

People I know really get stuck on this last point. Thinking that they will maintain “good” health until grabbing their chests and simply toppling over, without ever experiencing a chronic illness, or sustaining a life-altering injury, they choke at the prospect of anything less than infinite self-determination.

We know that it doesn’t work that way. And when it doesn’t, people get hurt. Badly.

It is scary to get old. It is scary to be sick. It is scary, and painful, to be hurt. Now, make a salad out of this, and add a little of how scary it would be to be all this…and to not have money. If you prefer a mathematical equation, this might help.

Old + Sick + Scared + Hurt + Broke = Screwed

I’d suggest that a different incentive – not a tax, like the ACA - exists to reward people for buying long-term care insurance coverage, beyond the market leverage and expanded freedom of choice in selecting the care received when needed.

If lawmakers were serious, they would step into the shoes of people with this life equation and incent everyday people to finance their own long-term care.

If reducing the amount taxpayers pay for Medicare and Medicaid programming, and diminishing constituent fear and loathing – about late-life issues – matters, they would delegate authority to the army of accountants and financial engineers working on the tax item shared earlier, and give them an additional task:

Determine the long-term benefits from everyday people owning long-term care insurance, through the creation of a tax credit, equal to the annual premium amount paid by policy holders.

Too rich of a benefit? Don’t think so. Here’s why… 

For those interested in learning more – beyond what I’ll share – visit the American Association for Long-Term Care Insurance website (www.aaltci.org.). I have, specifically looking at their offering under ‘For Consumers’ and ‘LTC Statistics’ entitled, “Long-Term Care Insurance Facts – Data – Statistics – 2024 Reports.” 

Based on this detail, and depending on age, gender, coverage type, and inflation factor, a person can determine the annual out-of-pocket cost for coverage. For example, a single male, Age 55, would have paid $950 in annual premiums for $165,000 of level benefits, which means that the benefit amount would not be indexed for inflation. Similar coverage for a single female, same age, would cost $1500 annually.

Why the difference? Ask any number of reps associated with companies offering this coverage.

Premiums, like optional features on an automobile, rise based on the type of coverage desired. Every percentage point in annual benefit inflation influences the annual amount paid. Age also influences premiums paid. It is cheaper to initiate coverage at 55 than at 60, and at 60 than 65 or 70.  Combining coverage with life insurance (aka – Linked-Benefit) changes the premium equation as well.

According to AALTCI data, buyers are not making the decision to buy earlier in life. Surprised? Not when considering the incentives currently in place.

Based on 2024 data, only 17% of individual traditional long-term care insurance policies were purchased by people age 49 and under, with a whopping 78% of policies purchased by those between 50 and 69.

Existing incentives do not spur younger buyers to secure this coverage earlier in life. This is costly, beyond premiums. In AALTCI’s 2022 report, 47.2% of all applicants over age 70 were denied coverage, as were 38.2% of applicants between 65-69.

Yes. This is what the beginning of Screwed looks like.

As Jesse Slome, director of the Association for Long-Term Care Insurance explains, “Your money pays for long-term care insurance, but it’s your health that really buys it.”

If these buyers continue to pay premiums and secure continued coverage – whether they eventually use the policy benefits or not – their behavior will save fellow taxpayers a significant amount of money in later years. While they make these payments, however, they aren’t receiving much recognition, celebration, or compensation for their behavior.

Today, long-term care insurance premiums are tax-deductible, at least for those who itemize deductions on their federal tax returns. With props to AALTCI, below is the 2025 IRS schedule for LTC insurance and deduction limits, expressed by age:

2025 Maximum Deduction Limits Long-Term Care Insurance

Attained Age Before Close of Taxable Year                    2025 Limit
40 or less                                                                                $480 
More than 40 but not more than 50                                      $900 
More than 50 but not more than 60                                       $1,800 
More than 60 but not more than 70                                       $4,810 
More than 70                                                                           $6,020 

What’s the collective tax benefit for the seven million people purchasing LTC insurance and itemizing deductions on their 1040s? I don’t know. It’s a number greater than zero.

What I do know, courtesy of AALTCI, is the annual amounts of long-term care insurance claims paid, from 2018-2023:

Year                    Amount

2018                    $10.3 Billion

2019                    $11.0 Billion

2020                   $11.6 Billion

2021                    $12.3 Billion

2022                    $13.3 Billion

2023                    $14.1 Billion

Total                    $72.6 Billion

And I’ll bet that none of the 1,972,000 claimants involved in saving their respective states – and the federal government – billions in cash…received a thank you note for their efforts.

But they might from their families, as this asset can protect other assets, which they may need – and benefit from – in future years.

Based on recent history (AALTCI, 2022), policy holders used this benefit as leverage to stay out of a nursing home, and off the Medicare and Medicaid rolls. Among first claims initiated in 2021, 73% occurred for services involving home care, with another 18% for assisted living. In basketball terms, nursing homes couldn’t score in double-digits, with claims activity at 9%.

This is incredibly good news. For policyholders – and policymakers. Remember, people don’t get up in the morning and say, “I can’t wait to live in a nursing home!”

In the IRS tax code (www.irs.gov), under “Credits and Deductions,” there are credits available for parents with children, students pursuing higher education, people buying electric or hybrid vehicles, enhancing their homes’ energy efficiency, and under some circumstances – paying for their health insurance premiums. 

There is, however, no tax credit for long-term care insurance premiums. This absence may indicate a mismatch between incentives and outcomes. My proof? Approximately seven million people – or 3.3% of Americans – hold long-term care insurance policies.

Again... disgraceful. With 68.5 million Medicare recipients (and rising with each birthday), over forty million adults on Medicaid, and at least 160 million people over age 40, any way you slice participation in this program…it sucks.

Yes. Sucks. Based on policyholder statistics alone, these incentives aren’t recognizing, celebrating – or rewarding – people for investing in their own independence and self-determination in their later years.

If lawmakers were serious, they’d wave the white flag on this eyesore. Unless they are serious in passing bigger tax bills to generations of voting constituents and encouraging old, sick, hurt, and scared people to be broke and screwed.

Hey, $72.6 Billion in taxpayer savings over a recent six-year stretch makes for the start of an interesting business case. Doesn’t it?

Feel free to share your thoughts at www.davedevereaux.com  Happy Tax Day.