Rob West: Long-term care isn't just a health issue. It can become a major financial and family decision. Hi, I'm Rob West. Most of us hope we'll never need extended care, but wise stewardship means planning for possibilities before they become a crisis. Nathan Sanow joins us today to help us understand long-term care, what insurance can and can't do, and how to build a plan that protects both your finances and your family. And then it's on to your calls at 800-525-7000. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Our guest today is Nathan Sanow, president of MasterCare and LTC Consumer. Nathan has spent more than two decades in the insurance industry helping individuals, families, and financial professionals navigate long-term care planning and find solutions that fit their needs. Nathan, great to have you here today.
Nathan Sanow: Thanks, Rob. Great to be here.
Rob West: Nathan, when people hear long-term care, their minds go straight to the cost of insurance, but I know you say the conversation should actually start with something much broader, and that is a plan. So, why is having a long-term care plan the most important first step?
Nathan Sanow: Yeah, it's a great question. One of the things that we always say is insurance is how the plan may be covered and paid for, but having a plan is really the first place to start. And firstly, Rosalynn Carter said it best, that there are really four kinds of people in the world: those who have been caregivers, those who are currently caregivers, and those who will be caregivers, and those who will need caregivers. And every one of us face this risk. And so it's important to have this conversation as a family to say, "If this was to happen to me, who do I want to provide that care? How does that impact their life? Are they physically able to do that? And, most importantly, how is that care going to get paid for?"
Rob West: Yeah. A lot of people assume Medicare, Medicaid, or even traditional health insurance will cover these long-term care expenses. So, what do those programs actually pay for, and where are the biggest gaps people need to understand?
Nathan Sanow: Yeah, and this is a very, very common misunderstanding. So, people just assume, "Well, someone pays for this care. I mean, my grandma back in the day needed it and somebody cared for her, and that was just paid for." But the reality is Medicare only pays for short-term care when you've been in a hospital for a short period of time under very specific conditions. So think rehab, like, "You know, I had a stroke and I need to get better, and I go to a rehab facility for a number of weeks," then Medicare will pay for that. Your traditional healthcare plan does not. Doesn't cover anything for custodial or healthcare. Medicaid does pay for long-term care, but it requires people to pay down to $2,000 of assets to get that. And then in many states, "Great, you've qualified for Medicaid, there's a waiting list to even get into a Medicaid facility." And so, it's important to understand what does cover and doesn't cover. The other one that is a common misunderstanding for working people is, "Well, I have long-term care because I have long-term disability," and they get the two confused. And long-term disability, obviously, replaces your income if you're not able to work, where long-term care pays for the care that you need when you're unable to care for yourself.
Rob West: Yeah, that's a really helpful overview. So, in light of those gaps then that you just identified, where does long-term care insurance fit into the overall plan?
Nathan Sanow: Yeah, insurance is—long-term care insurance is just like any insurance. It's a leveraged tool that says, "Okay, I've got this unpredictable risk that I'm facing that I don't want to pay for myself, so I'm going to assign that risk to an insurance company for a predictable premium so that if the unlikely catastrophic event happens, I've got that coverage that's there." The great thing is the policies are very, very loose, meaning you're in control of where you want to receive care, who provides that care. So if you want to receive care at home, which is where most of us would prefer if we're able to—
Rob West: Sure.
Nathan Sanow: —the policies pay the same for that kind of care as it would for facility. Most policies—not all, there are some that include a family member to pay for them, but most policies pay for professional home care services, so has to be somebody that is a professional home care agency aide, that licensed professional to come in, doesn't pay for your family member, although, again, there are some policies that do that. The other thing that's really great about long-term care insurance policies are the family caregiver support services. And this is something many people aren't aware of when a caregiving event happens—and I've gone through it in my own life—it's a very stressful time, and having those resources available to advise that family is incredibly valuable.
Rob West: Really good. Well, we're going to continue to unpack this, including the underwriting, the cost, and much more with Nathan Sanow from ltccan.com. We'll be right back.
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Rob West: We're talking long-term care today, planning ahead and where insurance might fit in. My guest today is Nathan Sanow, president of MasterCare and LTC Consumer. He's spent more than two decades in the insurance industry helping individuals, families, and financial professionals navigate long-term care planning and finding solutions to fit their needs. Nathan, before the break, you gave us a good understanding of where the gaps are in terms of covering long-term care needs in that season of life and where insurance might fit in. Let's talk about the costs, because that's of course a major concern for people. So, what does long-term care insurance typically cost today, and how can someone structure coverage to fit within their budget?
Nathan Sanow: Yeah, it's a great question, a very common question we get. And long-term care insurance is like any insurance. You can buy a Mercedes coverage, you can buy a Corolla coverage, and everything in between. But just to give you raw averages, and to give you perspective, we'll deal with probably 10,000 consumers a given year that are interested in looking at long-term care through our company. And last year, the average hybrid life/long-term care combination plan was about $6,000 a year per policy. For traditional long-term care insurance, which is what most people are used to over the years, that average policy is about $3,500. But I looked to the data, our smallest policy we wrote last year was $261 a year, the most expensive being $8,800 a year, so you can kind of see the bookends. And then short-term care, which is long-term care that covers 1 to 2 years of coverage, the average policy is about $2,000 a year.
Rob West: Hm, okay. Yeah, that's really helpful. And the data says that, if I'm not mistaken, and you would know better, 70% of Americans 65 and older will probably need some form of long-term care, is that about right?
Nathan Sanow: Yeah, the more recent stat that came out that we reference was by the Department of Health and Human Services that says 52% of us, so one in two, are going to need professional long-term care services for 90 days or more. So one in two of us are going to need that kind of care. And for women, one in five women are going to need professional long-term care for 5 years or more. So it's a big issue, especially for women.
Rob West: Yeah. And if something is going to erode your assets in this season of life, I mean, this has got to be at the top of the list or close to it, right?
Nathan Sanow: Absolutely. I mean, I don't care how well you've planned your retirement, it can leave a hole in a hurry. Just because the cost is so unpredictable. For example, in my state of Washington where I live, the average cost of a long-term care facility, if I was going to go into, is about $11,000-$12,000 a month. So that can eat up a serious amount of money very, very quickly, especially if you're going to need that kind of care for a long period of time, and most people just haven't planned for it, they just haven't thought of it.
Rob West: Yeah. Is there a rule of thumb to say who can self-insure versus those that just know they would need to depend on government services, and then kind of who's in that sweet spot to need long-term care insurance?
Nathan Sanow: Yeah, you know, when you look at—I would say under a couple hundred thousand dollars of assets, you're better off just kind of going your own and you're looking at Medicaid, for example, most likely. On the upper end of income, what's been very interesting, and really over the last couple years, we're seeing much, much wealthier people with significant assets still buying a long-term care policy, because they can self-insure, and I would say that break-even might be $4-$5 million of assets. But what they're looking at is that hedge, to say, "Okay, well, that policy may cost me $200,000-$300,000, but it's going to give me $1.5 million or a million dollar plus benefit, that's worth the trade-off for me." So we're seeing a trend where very, very affluent people are still looking at policies just as a risk transfer.
Rob West: Yeah. But everybody else kind of in the middle between $200,000 and $2 million in assets, I mean, this is absolutely something you recommend they look at, right?
Nathan Sanow: 100%. I mean, if you needed care that was going to cost $8,000-$10,000 a month, 12 months, that's $120,000. Where is that money going to come from in your plan? Have you planned for that? And that's one of the things we talk about, the importance of having a long-term care plan, not just long-term care insurance. Because maybe you want to self-insure. Okay, great. What asset is tagged that can be liquid so that if you need to pay for your own care, then you've got that asset earmarked, readily available at your disposal, should you need it?
Rob West: Yeah. Obviously, a common question that comes up is, when is the ideal time to consider buying this kind of insurance, balancing health eligibility and age? What are your thoughts?
Nathan Sanow: Yeah, so our average buyer is typically a couple age 55-56, give or take. And what we would tell people is most people in their early 50s, 50 to 65, is really kind of that sweet spot. Although we are seeing younger people in their 40s that we rarely ever saw coming into the buying zone. I think because they're seeing the issue with their parents who might be older. The other thing is, when people were in their 70s, we really were, because of health underwriting, limited on what we could offer. Now there's new long-term care annuities that help a lot more people be able to get coverage that previous years they just weren't able to get.
Rob West: Yeah, yeah, that makes sense. I know price increases have to be done on the aggregate, but they have been challenging over the years. What do people need to understand about the potential for the premiums to increase over time?
Nathan Sanow: Yeah, so price increases are an unfortunate black eye on the industry. I mean, my own long-term care policy has gone up significantly as I've owned it over the years. But there's really two things to the benefit. One, there's some policies now, the life/long-term care hybrids, contractually cannot increase, so you can get guaranteed premiums. The other thing is data. So a lot of the issues previously were insurance companies that really didn't understand, one, interest rate assumptions. When we had the Great Recession back in 2008-2009 and the Fed rate went to zero, that impacted a lot of insurance companies. And then two, the claims data. Well, now, many years later, we have a much, much better data set to understand the interest rate environment and also the claims environment. So the likelihood of rate increases on policies sold today is very, very small.
Rob West: Yeah, very good. Just a couple of minutes left. I know there's some newer features or options that are available today that have not been available in the past. You want to mention a couple of those?
Nathan Sanow: Yeah, a couple things just to know. One, cash is king. So we're seeing an increase in cash benefits where you qualify for a policy, "Here's your money, use it to pay for a family member, friend, it doesn't matter." It's the ultimate flexible freedom at claim time, that's something that's new. The other thing is policies are moving to a monthly benefit versus a daily benefit, and that sounds small, but it's actually significant, especially in home care. When care is only needed 2-3 days a week, that monthly benefit provides the set benefit for the month regardless of your daily spend. A daily benefit is just the max per day, and you may cap out on those days of care.
Rob West: Very good. Last question: for someone listening today and realizing they need to start the planning process, what's the first step?
Nathan Sanow: Yeah, start with a family conversation. So think of is, if you needed this care, how is that care going to be paid for? Who's going to provide that care? Have you talked to them, are they physically even able to do that? And in what setting do you want that care to be had? And really start there. And then look at, okay, what kind of insurance coverages do we have? And talk to an independent professional. If there's one thing I would get, the health underwriting is very precise by carriers, and it's important to work with a professional.
Rob West: Excellent, I couldn't agree more. Nathan, we're going to have you back real soon, but really appreciate your time today, great information.
Nathan Sanow: Thanks, Rob. Great to be here.
Rob West: That's Nathan Sanow, president of LTC Consumer and MasterCare. To learn more about long-term care planning and explore your options, visit ltcconsumer.com. That's ltcconsumer.com.
We'll be back with your questions after this break, so call right now: 800-525-7000. That's 800-525-7000. Or if you'd prefer to email your question, send it to us at [email protected]. Stick around.
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Rob West: So glad to have you here on Faith and Finance on American Family Radio. I'm Rob West. Well, we'll be taking your calls here in just a moment, which means now is a great time to call 800-525-7000. Again, that number: 800-525-7000. Lines are open at the moment, although the calls are coming in, and we will dive into those here in just a moment.
In the news today, workers eligible for the federal no-tax-on-overtime deduction should have an easier time claiming the break for the 2026 tax year. The IRS has updated its guidance and will require employers to report qualifying overtime directly on workers' W-2 forms using a new code. That's a major change from 2025, when many taxpayers had to calculate the deduction themselves using their pay stubs.
The deduction only applies to overtime premium required under the Fair Labor Standards Act. That's generally the extra half of a worker's time-and-a-half rate. Eligible taxpayers can deduct up to $12,500 for single filers, $25,000 for married couples filing jointly. The benefit begins phasing out at $150,000 of income for individuals, $300,000 for joint filers.
More than 29 million taxpayers claimed the deduction for 2025 with an average deduction above $3,100, so pretty meaningful. Tax experts still recommend checking 2026 W-2s against pay records. If the reported overtime amount is wrong, you have to ask your employer for a corrected W-2 rather than changing the amount yourself. So, while employer reporting should make the overtime deduction simpler for 2026, workers still need to verify their W-2 before filing. Hopefully, it shortens the amount of work you have to put into the whole process. Nevertheless, a nice feature of President Trump's agenda. He campaigned on it, he followed through on it, and now we're seeing the benefit of it, both for individuals who benefit from it, but also just in the overall economy.
All right, let's dive into your questions today. We're going to begin in Tennessee. Mike, thanks for your call. Go ahead.
Mike: Yes, thanks for taking my call. My question was, I was wanting to put some money in my grand-kids' accounts for later on down the road, and I wondered about the Trump accounts, and then are there any other plans, you know, possible also?
Rob West: Yeah, great question. I love this idea that you want to seed an account for the kids, and I think that's a great thing to do. I wouldn't view a Trump account as automatically better than something else, particularly a 529. They serve different purposes, and using some of each can also make some sense. It really depends on your goal.
One important point is, you know, they would both be eligible to have Trump accounts because they're under 18, your two grandchildren. Neither, though, would qualify for the $1,000 pilot contribution. That required that they be born between 2025 and 2028.
The main purpose of the Trump account: long-term savings, a head start. 529 plans would be the kind of the other, more common savings vehicle for grandparents saving for their grandkids, but that's going to be specifically for education. Grandparents can contribute to both. The 2026 limit is going to be $5,000, you know, for the Trump account, much higher for the 529, essentially unlimited, although not exactly.
On the investment side, the investments on the Trump account are restricted to qualifying low-cost US stock index funds, which can be great just to buy the market, so to speak, at a low-cost approach. Whereas the 529 offer investment choices kind of like a 401(k). Each state has a 529, they pick their plan administrator and the fund provider, and then they build the investments, and the historical performance varies widely. In fact, you would probably want to look outside of your state if you went with the 529 as you evaluate the performance over the long haul.
In terms of the access as a child, the Trump account is generally locked up before 18, whereas the 529 is only available for qualified educational expenses. And then the taxes for the Trump account essentially follow the traditional IRA rules—growing tax-deferred, you pay the tax when it comes out. The nice part of the 529 is, although you didn't get the deduction going in, and you don't on the Trump account, you get that money out tax-free, including the gain, as long as it's used for qualified educational expenses.
So, you know, I think at the end of the day, it's going to come down to: What is your ultimate goal? If it's for college, I like the 529. If you'd like it more widely available, then the Trump account's going to be a great option for you.
Mike: Okay, that helps out quite a bit, and it's just something... I just want to put like maybe $100 a month for each one of them in until they're 18, and then let them use it for, you know, most of their college education.
Rob West: Okay, yeah. And so that's probably going to be the 529, largely because, you know, you're going to get the tax-free growth. So if you start now and they're young, you know, you're going to get a lot of growth over the next number of years. And, you know, you're talking 11 years on one, and, you know, on the other, I think you said he was three, we're talking 15 years there. As long as it's used for qualified educational expenses—and you can get it out on a pro-rata basis for scholarships and grants—then they get tax-free growth. They're never going to pay tax on it, which is not the case with the Trump account.
In terms of the best 529s from an overall kind of standpoint—low fees, high-quality investments—Utah, interestingly, has been the winner there, and then followed by New York, Nevada. And then you should also check your own state's 529, although you're in Tennessee and don't have a state income tax, so there's not going to be much of a benefit there.
Mike: All right, well, I appreciate it very much, and enjoy your show.
Rob West: Thank you, Mike. Lord bless you. You sound like a great grandfather, and we appreciate you being on the program today. Let's head to Mississippi. Hi, Vivian. Go ahead.
Vivian: Good morning. Thank you for your topic this morning, long-term care insurance. My husband and I have premium policies that are probably 20–25 years old. Of course, the premiums are getting more expensive each year, approximately $10,000 to $12,000 annual premium. So we are considering dropping that coverage and looking into what is called CCRC, Continuing Care Retirement Communities.
Rob West: Yeah, let me do this. I'm up against a break. I am familiar with that. I'd love to weigh in on it, and I apologize for cutting you off there, Vivian. Right after this break, I'll give you my thoughts on both of those questions. It's a great one. We'll be right back. Stay with us.
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Rob West: Great to have you with us today on Faith & Finance here on American Family Radio. I'm Rob West. We had Nathan Sannow with us in the first part of the broadcast. He talked about some really helpful insights on long-term care policies, which are often confusing, misunderstood, and a lot of folks have older policies that they're frustrated with around the premium increases. We're taking some questions today on this topic, but really any financial question in play today. If you've got something on your mind, call right now, 800-525-7000.
Before the break, we were talking to Vivian in Mississippi. She's got a long-term care policy, and she has seen some increases. She's considering a CCRC, a continuing care retirement community, and she's wondering about buying in and having that monthly rate for all services. You know, these can be a really great option. You know, these are also called life plan communities, and basically, to your point, designed to let someone move through different levels of care in one place. So you can go from independent living to assisted living to skilled nursing care or memory care if you need it. It's all right there.
Typically, they have a substantial buy-in fee plus then that ongoing monthly fee, and the exact deal really varies widely by community, including whether any portion of the entrance fee is refundable—typically not. The important issue is the type of CCRC contract. So some of them provide much more future healthcare and long-term care coverage for relatively predictable fees. Others essentially provide housing and access to care, but charge substantially more when you actually need assisted living or nursing care.
So you need to really find out: What is my entrance fee purchase? What is the amount, and how much is refundable? What does the monthly fee cover? And then what happens to that monthly fee if I need to progress through other forms of care? Does it remain flat and it's all-inclusive, or is it going to go up if I need assisted living or skilled nursing care? Are there daily or monthly limits? Have the fees increased historically, and if so, how much? You know, those kinds of things. Typically, they will evaluate your finances to make sure that you can, you know, you're sustainable so you don't run out of money.
But let me stop there. I can talk about whether or not to drop that old LTC policy, but, you know, I'm generally in favor of these communities if you can afford it and if you do your homework and understand what you're buying.
Vivian: Well, that's great information, and that is my research thus far is exactly as you've stated. I appreciate that.
Rob West: Okay, yeah, good. You do have a current long-term care policy that's in place, or no?
Vivian: Yes, we do.
Rob West: Okay, yeah, and it's becoming more and more expensive?
Vivian: Yes, that's correct. You know, the concern with a CCRC is you're somewhat anchored to that facility and/or group, whereas with obviously your long-term care policy, you may relocate and you have that benefit—which we have a tremendous policy that is pretty comprehensive. So it's a question, you know.
Rob West: Yeah, I totally understand it. You know, I will say my mom recently moved into one of these in the last couple of years, and she loves it. She's completely independent, very healthy, very active. But, you know, between the restaurants and the friends that she's made, and, you know, one night they go to the little movie theater on the property, and the next night, you know, they have dinner together every night, and they play cards and, you know, have a lot of fun together, go to church and Bible studies, and, you know, it just keeps her really active and she just loves that part of it. And she can progress through if she ever needed that skilled or nursing care, it's all right there and included.
So, you know, they can be wonderful, but you're right, you are making a commitment, especially if that substantial buy-in fee is not refundable. In terms of that older long-term care policy, I mean, this is, unfortunately, very common with the premium increases. The insurers originally underestimated things like how many policyholders would keep their coverage, and how many would eventually make claims, how long they would last. But those old policies have benefits and features that would be very expensive or impossible to replace today, particularly if your health has changed.
So if the premium increase becomes unaffordable, don't assume your only choices are either to pay it or cancel it. A lot of times, they'll offer reduced benefit alternatives. So depending on the policy, you might be able to reduce the daily or monthly benefit, or shorten the benefit period, or change the inflation protection. So those would be, you know, things you could look at before you decide to cancel it. But I think at the end of the day, you need to do your homework on all these, make some decisions, and, you know, whether or not you're willing to commit to one of these communities, and if so, that could be a great option.
Vivian: Well, and you're correct, and I appreciate that information. You've confirmed everything that, as I said, we've researched, and we're praying about it, and the Lord will lead us and we'll make the right decision. Thank you for your help this morning.
Rob West: Absolutely, Vivian. I'm confident of that as well. Thanks for your call today. James 1:5, if we lack wisdom, ask God and He'll give it generously. Stewart in Virginia, go ahead.
Stewart: Yes, Rob. Thank you for taking my call. I have pretty much the same problem that Vivian has. We've had a long-term health care since 2001. The problem was it kept going up and up. This year, the premium increased by over $1,200, and we have reached a saturation point. Now, we've let it go, but I have a year to renew it. And we're at the point where, you know, I don't understand why they keep going up and up and up, you know.
Rob West: Yeah. Well, it's I understand the challenge here, Stewart, and I'm so sorry to hear you're in this situation. You know, keep in mind, you know, this isn't related to you. They're not saying you're older or less healthy now, necessarily, in raising your individual rate. These rate increases apply to a class of similar policies and are subject to state regulation. I know that doesn't change the reality of it, but that's really why it's happening.
And as I mentioned before, these policies were misunderstood, they were new when they were being sold, they were not priced properly, that's a problem industry-wide, and now they're having to, on the aggregate, increase dramatically these premiums just to be able to, you know, make them viable. You know, what I would say is before that year runs out, I would go back, just like I said to Vivian, and perhaps look at some other options. You know, could you reduce or modify the inflation protection? Could you reduce the daily or monthly benefit? Shorten the benefit period.
So reducing a lifetime benefit, for instance, to a smaller number of years when the average person needs long-term care for somewhere between 18 months and 3 years, you know, you might be paying for unlimited, I don't know, but, you know, if you shorten that to something that's more typical, at least you'd get those core years where somebody typically needs this type of care covered and do it on a more affordable basis. You could also increase the elimination period. This is essentially the number of months before it kicks in.
So those would be your next steps before you just let it go altogether, because it probably is a great policy, something that might not even be available today. But it's got to be affordable, because if you can't pay for it, it doesn't do you any good because it's eventually going to lapse.
Stewart: They gave other options. One was reducing from three years to two years, but the premium didn't decrease that much, maybe just a few hundred dollars or so.
Rob West: Ah, yeah, so that doesn't really help too much. Yeah.
Stewart: No. So, but I appreciate your help.
Rob West: All right, Stewart. I wish I had a solution for you. I know this is challenging, but we're going to trust the Lord on this, ask Him to give you some wisdom, and if you need an advisor to look over this and help you with some other possible scenarios here, don't hesitate to reach out there in Virginia. FindACCA.com to find a certified Kingdom advisor in your area. God bless you, sir. We're going to take a quick break and then come back with our final segment. A few lines open. Your questions at 800-525-7000. Stick around. We'll be right back.
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Rob West: Thanks for joining us today on Faith & Finance Live. I'm Rob West. Here in our final segment, we'll get to as many calls as we can. 800-525-7000, you can call right now. Let's go to Arkansas. Jim, I understand you have a long-term care question as well. Go ahead.
Jim: Yes, sir. Good morning. I do. Thank you for your program. I listen every morning streamed through my hearing aids as I go about doing whatever I do. I love it. I get so much information. Going back to your guest, Nathan, with this long-term care, I have had a health savings account for many, many years, have never touched it, am not contributing to it anymore, I'm not eligible anymore, but I have about $180,000 in it. And had always been told that I could use that to pay for nursing home care. And now I'm finding out that that's not exactly right. I can't pay a nursing home directly for the monthly fee for assisted or skilled nursing care. And so, number one, I don't know if you've heard anything on the national level of maybe making that where we can be more flexible with how we spend our HSA. The other is that if we can't, I know that one of the ways that I could spend it down was to pay my premiums for Medicare. Mine are automatically drafted or deducted from my Social Security check, but it's my understanding that I could then go in monthly and reimburse myself for those premiums. So I'm wondering if I need to start doing that. So, just a lot of stuff unknown.
Rob West: Yeah, let me weigh in on some of this here because this is an important topic and you raised a number of issues here. You know, there may be some confusion between paying long-term care insurance premiums from an HSA and using HSA money to pay actual nursing home expenses. So under the IRS rules, an HSA can potentially be used tax-free for qualified long-term care and nursing home expenses. The fact that the expense is a nursing home does not automatically make it ineligible. It's really this distinction, and that is: if you're in the nursing home primarily to receive medical care, then qualifying costs can include both the care and potentially meals and lodging. If you're there primarily for personal reasons rather than medical care, the room and board generally doesn't qualify merely because it's a nursing home—just the medical and nursing portion would qualify.
You know, qualified long-term care services can also qualify when the person is chronically ill and the services are provided under a plan of care described or prescribed by a healthcare practitioner. In terms of the One Big Beautiful Bill, it did make several HSA changes, but it didn't create a new blanket rule making all nursing home room and board HSA eligible. So that wouldn't necessarily be there.
I would just say before concluding that you can't use the HSA, I'd find out who told you that and why. And if it's the HSA administrator, I'd ask, "Are you saying the nursing home expenses don't meet the IRC qualified medical expense requirements, or are you saying your HSA simply won't pay the facility directly?" Because those are different issues. HSA distributions can be taken to reimburse yourself, to your point, for qualified medical expenses. The HSA provider doesn't necessarily have to pay the nursing home directly. Does that make sense?
Jim: Yes, sir. Yes, sir, it does.
Rob West: Okay. All right. So I think maybe that's the next step, is just to clarify what's actually being said here and see if, in fact, you would be able to use this for a nursing home. Because again, if it's primarily for medical purposes, then almost—if not all of it—almost nearly all of it could be paid for out of that HSA.
Jim: Okay. And then the other idea about maybe starting to reimburse myself for those Medicare premiums, is that actually a thing I could do?
Rob West: Yeah, you mean from the HSA?
Jim: From my HSA account, yes, sir.
Rob West: Yeah. So within an HSA, you can reimburse yourself for Medicare premiums if you're 65 or older. The IRS allows tax-free HSA distributions for Medicare after age 65 for Part B, Part D, Medicare Advantage premiums, and Part A premiums. The major exception is Medigap and Medicare Supplement premiums; those cannot be reimbursed tax-free from an HSA.
Jim: Okay, okay. I wouldn't want to do it to the point where I spend down all of this money, but that's because even though it sounds like a lot, $180,000, you can go through it if you're stuck in one for a while. Fortunately, we have other funds that could pay, but you just have in the back of your mind, "I didn't work and save all my life to then have to spend it all on a nursing home," you know? So, just thinking about all of those things. Okay, very good. Very good, thank you so much.
Rob West: Yeah, and one other thing I would mention here—you're welcome—there's no requirement that that reimbursement has to occur in the same year the expense was incurred. So you could go back and reimburse yourself for prior expenses, even if it was after the year the expense took place. So I think you've got a lot of options here, but I would dig into this a bit further and just get some clarification as to why you're being told it can't be used for nursing home care, because that's not what the IRS rules and regs say. There are some stipulations, but depending on why you're there, you absolutely could pull that money from your HSA.
Hey Jim, thanks for your call. We appreciate you being a regular listener. Stay on the line; I'm going to send you a copy of our latest magazine, Faithful Steward. I think it'll be an encouragement to you, just as our thanks for being on the program today. Let's go to Texas. Hi Nancy, go ahead.
Nancy: Good morning.
Rob West: Hi!
Nancy: Am I coming through okay?
Rob West: You sure are. Yes, ma'am. How can I serve you today?
Nancy: Okay. I have a long-term care policy with a major company, and I've incurred like about $18,000 expense, and they're refusing to reimburse me. I needed a caregiver from last August. I fell and broke my right wrist. I'm right-handed and I couldn't use it, so I got a caregiver to come in and help me here. Then from that, they found cancer, and I had to start chemo treatments. And the chemo put me down; I was so sick. And so I got a caregiver. And they're refusing to reimburse me. So I'm thinking, what do I need? Do I need to see a lawyer, but what kind of a lawyer? Who do I need to see to guide me through this?
Rob West: Mm, yes. Well, first of all, I am so sorry, Nancy, for what you've been walking through. I know this is a lot, and it's been weighing heavily on you. Let me just kind of walk through how these policies work and what are called the benefit triggers, and let's see if we can determine whether or not this refusal is correct—as much as I don't even want to consider that. I think we just need to look at the facts here because I don't want you to spend a lot of money on something that ultimately is not going to benefit you if, in fact, their refusal is in line with how these work.
The key issue isn't simply whether you were sick enough to need help. These long-term care insurance policies pay according to the policy's benefit triggers, and most policies require you to need what's called substantial assistance with at least two of the six activities of daily living in order—or have a qualifying cognitive impairment. So, for example, a broken dominant wrist plus chemotherapy, you may have needed assistance with two, but if your medical records and caregiver documentation establish that you couldn't perform two qualifying ADLs (activities of daily living), that could be very important to your appeal.
But you would need to see if, in fact, you have that documentation. If you can get that documentation or you already have it, then you would want to start by just requesting the denial in writing. So you'd want to go to the insurer and ask, "What specific provision of my policy are you relying on to deny reimbursement?" Also ask whether they're denying you because you didn't meet the activities of daily living trigger, or maybe they're saying you didn't satisfy the elimination period (meaning the waiting period before you can begin to collect), or maybe they'll say the caregiver wasn't an eligible provider. There may be some other reason. You need to know what was the reason for that denial.
And then, if it's that you didn't qualify based on the benefit trigger, well then you need to get documentation from your doctors—either your primary physician or your oncologist—and they need to be able to say how your wrist injury and chemotherapy affected your ability to perform two of these six activities of daily living during the period you employed the caregiver. And then with the caregiver invoices and the dates and the descriptions, you could file that formal appeal and hopefully get that reversed.
Could you need an attorney? Yes, especially if we're talking about a substantial amount of unpaid caregiver expenses. But I would exhaust these other options first and see if you can't settle this directly with the insurance company. The starting point is the exact reason on the denial letter; that really is going to tell us a lot. Once you get that, feel free to call me back, and I'd love to talk to you about it a bit further.
Unfortunately, I'm out of time, Nancy, but I so appreciate your call today. I hope I've given you a few things to work off of, and if we can serve you further in the future, please reach out.
Folks, so glad to have you along with us today. Big thanks to my team today: Patty, Devin, Taylor, and everybody here at Faith & Finance. Don't forget, in just less than two weeks in our partnership with Preborn, looking to fund 1,500 free ultrasounds, $28 at a time. Help us out at faithfi.com/preborn. Then come back and join us tomorrow. We'll see you then. Bye-bye.
Rob West: Long-term care isn't just a health issue. It can become a major financial and family decision. Hi, I'm Rob West. Most of us hope we'll never need extended care, but wise stewardship means planning for possibilities before they become a crisis. Nathan Sanow joins us today to help us understand long-term care, what insurance can and can't do, and how to build a plan that protects both your finances and your family. And then it's on to your calls at 800-525-7000. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Our guest today is Nathan Sanow, president of MasterCare and LTC Consumer. Nathan has spent more than two decades in the insurance industry helping individuals, families, and financial professionals navigate long-term care planning and find solutions that fit their needs. Nathan, great to have you here today.
Nathan Sanow: Thanks, Rob. Great to be here.
Rob West: Nathan, when people hear long-term care, their minds go straight to the cost of insurance, but I know you say the conversation should actually start with something much broader, and that is a plan. So, why is having a long-term care plan the most important first step?
Nathan Sanow: Yeah, it's a great question. One of the things that we always say is insurance is how the plan may be covered and paid for, but having a plan is really the first place to start. And firstly, Rosalynn Carter said it best, that there are really four kinds of people in the world: those who have been caregivers, those who are currently caregivers, and those who will be caregivers, and those who will need caregivers. And every one of us face this risk. And so it's important to have this conversation as a family to say, "If this was to happen to me, who do I want to provide that care? How does that impact their life? Are they physically able to do that? And, most importantly, how is that care going to get paid for?"
Rob West: Yeah. A lot of people assume Medicare, Medicaid, or even traditional health insurance will cover these long-term care expenses. So, what do those programs actually pay for, and where are the biggest gaps people need to understand?
Nathan Sanow: Yeah, and this is a very, very common misunderstanding. So, people just assume, "Well, someone pays for this care. I mean, my grandma back in the day needed it and somebody cared for her, and that was just paid for." But the reality is Medicare only pays for short-term care when you've been in a hospital for a short period of time under very specific conditions. So think rehab, like, "You know, I had a stroke and I need to get better, and I go to a rehab facility for a number of weeks," then Medicare will pay for that. Your traditional healthcare plan does not. Doesn't cover anything for custodial or healthcare. Medicaid does pay for long-term care, but it requires people to pay down to $2,000 of assets to get that. And then in many states, "Great, you've qualified for Medicaid, there's a waiting list to even get into a Medicaid facility." And so, it's important to understand what does cover and doesn't cover. The other one that is a common misunderstanding for working people is, "Well, I have long-term care because I have long-term disability," and they get the two confused. And long-term disability, obviously, replaces your income if you're not able to work, where long-term care pays for the care that you need when you're unable to care for yourself.
Rob West: Yeah, that's a really helpful overview. So, in light of those gaps then that you just identified, where does long-term care insurance fit into the overall plan?
Nathan Sanow: Yeah, insurance is—long-term care insurance is just like any insurance. It's a leveraged tool that says, "Okay, I've got this unpredictable risk that I'm facing that I don't want to pay for myself, so I'm going to assign that risk to an insurance company for a predictable premium so that if the unlikely catastrophic event happens, I've got that coverage that's there." The great thing is the policies are very, very loose, meaning you're in control of where you want to receive care, who provides that care. So if you want to receive care at home, which is where most of us would prefer if we're able to—
Rob West: Sure.
Nathan Sanow: —the policies pay the same for that kind of care as it would for facility. Most policies—not all, there are some that include a family member to pay for them, but most policies pay for professional home care services, so has to be somebody that is a professional home care agency aide, that licensed professional to come in, doesn't pay for your family member, although, again, there are some policies that do that. The other thing that's really great about long-term care insurance policies are the family caregiver support services. And this is something many people aren't aware of when a caregiving event happens—and I've gone through it in my own life—it's a very stressful time, and having those resources available to advise that family is incredibly valuable.
Rob West: Really good. Well, we're going to continue to unpack this, including the underwriting, the cost, and much more with Nathan Sanow from ltccan.com. We'll be right back.
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Rob West: We're talking long-term care today, planning ahead and where insurance might fit in. My guest today is Nathan Sanow, president of MasterCare and LTC Consumer. He's spent more than two decades in the insurance industry helping individuals, families, and financial professionals navigate long-term care planning and finding solutions to fit their needs. Nathan, before the break, you gave us a good understanding of where the gaps are in terms of covering long-term care needs in that season of life and where insurance might fit in. Let's talk about the costs, because that's of course a major concern for people. So, what does long-term care insurance typically cost today, and how can someone structure coverage to fit within their budget?
Nathan Sanow: Yeah, it's a great question, a very common question we get. And long-term care insurance is like any insurance. You can buy a Mercedes coverage, you can buy a Corolla coverage, and everything in between. But just to give you raw averages, and to give you perspective, we'll deal with probably 10,000 consumers a given year that are interested in looking at long-term care through our company. And last year, the average hybrid life/long-term care combination plan was about $6,000 a year per policy. For traditional long-term care insurance, which is what most people are used to over the years, that average policy is about $3,500. But I looked to the data, our smallest policy we wrote last year was $261 a year, the most expensive being $8,800 a year, so you can kind of see the bookends. And then short-term care, which is long-term care that covers 1 to 2 years of coverage, the average policy is about $2,000 a year.
Rob West: Hm, okay. Yeah, that's really helpful. And the data says that, if I'm not mistaken, and you would know better, 70% of Americans 65 and older will probably need some form of long-term care, is that about right?
Nathan Sanow: Yeah, the more recent stat that came out that we reference was by the Department of Health and Human Services that says 52% of us, so one in two, are going to need professional long-term care services for 90 days or more. So one in two of us are going to need that kind of care. And for women, one in five women are going to need professional long-term care for 5 years or more. So it's a big issue, especially for women.
Rob West: Yeah. And if something is going to erode your assets in this season of life, I mean, this has got to be at the top of the list or close to it, right?
Nathan Sanow: Absolutely. I mean, I don't care how well you've planned your retirement, it can leave a hole in a hurry. Just because the cost is so unpredictable. For example, in my state of Washington where I live, the average cost of a long-term care facility, if I was going to go into, is about $11,000-$12,000 a month. So that can eat up a serious amount of money very, very quickly, especially if you're going to need that kind of care for a long period of time, and most people just haven't planned for it, they just haven't thought of it.
Rob West: Yeah. Is there a rule of thumb to say who can self-insure versus those that just know they would need to depend on government services, and then kind of who's in that sweet spot to need long-term care insurance?
Nathan Sanow: Yeah, you know, when you look at—I would say under a couple hundred thousand dollars of assets, you're better off just kind of going your own and you're looking at Medicaid, for example, most likely. On the upper end of income, what's been very interesting, and really over the last couple years, we're seeing much, much wealthier people with significant assets still buying a long-term care policy, because they can self-insure, and I would say that break-even might be $4-$5 million of assets. But what they're looking at is that hedge, to say, "Okay, well, that policy may cost me $200,000-$300,000, but it's going to give me $1.5 million or a million dollar plus benefit, that's worth the trade-off for me." So we're seeing a trend where very, very affluent people are still looking at policies just as a risk transfer.
Rob West: Yeah. But everybody else kind of in the middle between $200,000 and $2 million in assets, I mean, this is absolutely something you recommend they look at, right?
Nathan Sanow: 100%. I mean, if you needed care that was going to cost $8,000-$10,000 a month, 12 months, that's $120,000. Where is that money going to come from in your plan? Have you planned for that? And that's one of the things we talk about, the importance of having a long-term care plan, not just long-term care insurance. Because maybe you want to self-insure. Okay, great. What asset is tagged that can be liquid so that if you need to pay for your own care, then you've got that asset earmarked, readily available at your disposal, should you need it?
Rob West: Yeah. Obviously, a common question that comes up is, when is the ideal time to consider buying this kind of insurance, balancing health eligibility and age? What are your thoughts?
Nathan Sanow: Yeah, so our average buyer is typically a couple age 55-56, give or take. And what we would tell people is most people in their early 50s, 50 to 65, is really kind of that sweet spot. Although we are seeing younger people in their 40s that we rarely ever saw coming into the buying zone. I think because they're seeing the issue with their parents who might be older. The other thing is, when people were in their 70s, we really were, because of health underwriting, limited on what we could offer. Now there's new long-term care annuities that help a lot more people be able to get coverage that previous years they just weren't able to get.
Rob West: Yeah, yeah, that makes sense. I know price increases have to be done on the aggregate, but they have been challenging over the years. What do people need to understand about the potential for the premiums to increase over time?
Nathan Sanow: Yeah, so price increases are an unfortunate black eye on the industry. I mean, my own long-term care policy has gone up significantly as I've owned it over the years. But there's really two things to the benefit. One, there's some policies now, the life/long-term care hybrids, contractually cannot increase, so you can get guaranteed premiums. The other thing is data. So a lot of the issues previously were insurance companies that really didn't understand, one, interest rate assumptions. When we had the Great Recession back in 2008-2009 and the Fed rate went to zero, that impacted a lot of insurance companies. And then two, the claims data. Well, now, many years later, we have a much, much better data set to understand the interest rate environment and also the claims environment. So the likelihood of rate increases on policies sold today is very, very small.
Rob West: Yeah, very good. Just a couple of minutes left. I know there's some newer features or options that are available today that have not been available in the past. You want to mention a couple of those?
Nathan Sanow: Yeah, a couple things just to know. One, cash is king. So we're seeing an increase in cash benefits where you qualify for a policy, "Here's your money, use it to pay for a family member, friend, it doesn't matter." It's the ultimate flexible freedom at claim time, that's something that's new. The other thing is policies are moving to a monthly benefit versus a daily benefit, and that sounds small, but it's actually significant, especially in home care. When care is only needed 2-3 days a week, that monthly benefit provides the set benefit for the month regardless of your daily spend. A daily benefit is just the max per day, and you may cap out on those days of care.
Rob West: Very good. Last question: for someone listening today and realizing they need to start the planning process, what's the first step?
Nathan Sanow: Yeah, start with a family conversation. So think of is, if you needed this care, how is that care going to be paid for? Who's going to provide that care? Have you talked to them, are they physically even able to do that? And in what setting do you want that care to be had? And really start there. And then look at, okay, what kind of insurance coverages do we have? And talk to an independent professional. If there's one thing I would get, the health underwriting is very precise by carriers, and it's important to work with a professional.
Rob West: Excellent, I couldn't agree more. Nathan, we're going to have you back real soon, but really appreciate your time today, great information.
Nathan Sanow: Thanks, Rob. Great to be here.
Rob West: That's Nathan Sanow, president of LTC Consumer and MasterCare. To learn more about long-term care planning and explore your options, visit ltcconsumer.com. That's ltcconsumer.com.
We'll be back with your questions after this break, so call right now: 800-525-7000. That's 800-525-7000. Or if you'd prefer to email your question, send it to us at [email protected]. Stick around.
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Rob West: So glad to have you here on Faith and Finance on American Family Radio. I'm Rob West. Well, we'll be taking your calls here in just a moment, which means now is a great time to call 800-525-7000. Again, that number: 800-525-7000. Lines are open at the moment, although the calls are coming in, and we will dive into those here in just a moment.
In the news today, workers eligible for the federal no-tax-on-overtime deduction should have an easier time claiming the break for the 2026 tax year. The IRS has updated its guidance and will require employers to report qualifying overtime directly on workers' W-2 forms using a new code. That's a major change from 2025, when many taxpayers had to calculate the deduction themselves using their pay stubs.
The deduction only applies to overtime premium required under the Fair Labor Standards Act. That's generally the extra half of a worker's time-and-a-half rate. Eligible taxpayers can deduct up to $12,500 for single filers, $25,000 for married couples filing jointly. The benefit begins phasing out at $150,000 of income for individuals, $300,000 for joint filers.
More than 29 million taxpayers claimed the deduction for 2025 with an average deduction above $3,100, so pretty meaningful. Tax experts still recommend checking 2026 W-2s against pay records. If the reported overtime amount is wrong, you have to ask your employer for a corrected W-2 rather than changing the amount yourself. So, while employer reporting should make the overtime deduction simpler for 2026, workers still need to verify their W-2 before filing. Hopefully, it shortens the amount of work you have to put into the whole process. Nevertheless, a nice feature of President Trump's agenda. He campaigned on it, he followed through on it, and now we're seeing the benefit of it, both for individuals who benefit from it, but also just in the overall economy.
All right, let's dive into your questions today. We're going to begin in Tennessee. Mike, thanks for your call. Go ahead.
Mike: Yes, thanks for taking my call. My question was, I was wanting to put some money in my grand-kids' accounts for later on down the road, and I wondered about the Trump accounts, and then are there any other plans, you know, possible also?
Rob West: Yeah, great question. I love this idea that you want to seed an account for the kids, and I think that's a great thing to do. I wouldn't view a Trump account as automatically better than something else, particularly a 529. They serve different purposes, and using some of each can also make some sense. It really depends on your goal.
One important point is, you know, they would both be eligible to have Trump accounts because they're under 18, your two grandchildren. Neither, though, would qualify for the $1,000 pilot contribution. That required that they be born between 2025 and 2028.
The main purpose of the Trump account: long-term savings, a head start. 529 plans would be the kind of the other, more common savings vehicle for grandparents saving for their grandkids, but that's going to be specifically for education. Grandparents can contribute to both. The 2026 limit is going to be $5,000, you know, for the Trump account, much higher for the 529, essentially unlimited, although not exactly.
On the investment side, the investments on the Trump account are restricted to qualifying low-cost US stock index funds, which can be great just to buy the market, so to speak, at a low-cost approach. Whereas the 529 offer investment choices kind of like a 401(k). Each state has a 529, they pick their plan administrator and the fund provider, and then they build the investments, and the historical performance varies widely. In fact, you would probably want to look outside of your state if you went with the 529 as you evaluate the performance over the long haul.
In terms of the access as a child, the Trump account is generally locked up before 18, whereas the 529 is only available for qualified educational expenses. And then the taxes for the Trump account essentially follow the traditional IRA rules—growing tax-deferred, you pay the tax when it comes out. The nice part of the 529 is, although you didn't get the deduction going in, and you don't on the Trump account, you get that money out tax-free, including the gain, as long as it's used for qualified educational expenses.
So, you know, I think at the end of the day, it's going to come down to: What is your ultimate goal? If it's for college, I like the 529. If you'd like it more widely available, then the Trump account's going to be a great option for you.
Mike: Okay, that helps out quite a bit, and it's just something... I just want to put like maybe $100 a month for each one of them in until they're 18, and then let them use it for, you know, most of their college education.
Rob West: Okay, yeah. And so that's probably going to be the 529, largely because, you know, you're going to get the tax-free growth. So if you start now and they're young, you know, you're going to get a lot of growth over the next number of years. And, you know, you're talking 11 years on one, and, you know, on the other, I think you said he was three, we're talking 15 years there. As long as it's used for qualified educational expenses—and you can get it out on a pro-rata basis for scholarships and grants—then they get tax-free growth. They're never going to pay tax on it, which is not the case with the Trump account.
In terms of the best 529s from an overall kind of standpoint—low fees, high-quality investments—Utah, interestingly, has been the winner there, and then followed by New York, Nevada. And then you should also check your own state's 529, although you're in Tennessee and don't have a state income tax, so there's not going to be much of a benefit there.
Mike: All right, well, I appreciate it very much, and enjoy your show.
Rob West: Thank you, Mike. Lord bless you. You sound like a great grandfather, and we appreciate you being on the program today. Let's head to Mississippi. Hi, Vivian. Go ahead.
Vivian: Good morning. Thank you for your topic this morning, long-term care insurance. My husband and I have premium policies that are probably 20–25 years old. Of course, the premiums are getting more expensive each year, approximately $10,000 to $12,000 annual premium. So we are considering dropping that coverage and looking into what is called CCRC, Continuing Care Retirement Communities.
Rob West: Yeah, let me do this. I'm up against a break. I am familiar with that. I'd love to weigh in on it, and I apologize for cutting you off there, Vivian. Right after this break, I'll give you my thoughts on both of those questions. It's a great one. We'll be right back. Stay with us.
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Rob West: Great to have you with us today on Faith & Finance here on American Family Radio. I'm Rob West. We had Nathan Sannow with us in the first part of the broadcast. He talked about some really helpful insights on long-term care policies, which are often confusing, misunderstood, and a lot of folks have older policies that they're frustrated with around the premium increases. We're taking some questions today on this topic, but really any financial question in play today. If you've got something on your mind, call right now, 800-525-7000.
Before the break, we were talking to Vivian in Mississippi. She's got a long-term care policy, and she has seen some increases. She's considering a CCRC, a continuing care retirement community, and she's wondering about buying in and having that monthly rate for all services. You know, these can be a really great option. You know, these are also called life plan communities, and basically, to your point, designed to let someone move through different levels of care in one place. So you can go from independent living to assisted living to skilled nursing care or memory care if you need it. It's all right there.
Typically, they have a substantial buy-in fee plus then that ongoing monthly fee, and the exact deal really varies widely by community, including whether any portion of the entrance fee is refundable—typically not. The important issue is the type of CCRC contract. So some of them provide much more future healthcare and long-term care coverage for relatively predictable fees. Others essentially provide housing and access to care, but charge substantially more when you actually need assisted living or nursing care.
So you need to really find out: What is my entrance fee purchase? What is the amount, and how much is refundable? What does the monthly fee cover? And then what happens to that monthly fee if I need to progress through other forms of care? Does it remain flat and it's all-inclusive, or is it going to go up if I need assisted living or skilled nursing care? Are there daily or monthly limits? Have the fees increased historically, and if so, how much? You know, those kinds of things. Typically, they will evaluate your finances to make sure that you can, you know, you're sustainable so you don't run out of money.
But let me stop there. I can talk about whether or not to drop that old LTC policy, but, you know, I'm generally in favor of these communities if you can afford it and if you do your homework and understand what you're buying.
Vivian: Well, that's great information, and that is my research thus far is exactly as you've stated. I appreciate that.
Rob West: Okay, yeah, good. You do have a current long-term care policy that's in place, or no?
Vivian: Yes, we do.
Rob West: Okay, yeah, and it's becoming more and more expensive?
Vivian: Yes, that's correct. You know, the concern with a CCRC is you're somewhat anchored to that facility and/or group, whereas with obviously your long-term care policy, you may relocate and you have that benefit—which we have a tremendous policy that is pretty comprehensive. So it's a question, you know.
Rob West: Yeah, I totally understand it. You know, I will say my mom recently moved into one of these in the last couple of years, and she loves it. She's completely independent, very healthy, very active. But, you know, between the restaurants and the friends that she's made, and, you know, one night they go to the little movie theater on the property, and the next night, you know, they have dinner together every night, and they play cards and, you know, have a lot of fun together, go to church and Bible studies, and, you know, it just keeps her really active and she just loves that part of it. And she can progress through if she ever needed that skilled or nursing care, it's all right there and included.
So, you know, they can be wonderful, but you're right, you are making a commitment, especially if that substantial buy-in fee is not refundable. In terms of that older long-term care policy, I mean, this is, unfortunately, very common with the premium increases. The insurers originally underestimated things like how many policyholders would keep their coverage, and how many would eventually make claims, how long they would last. But those old policies have benefits and features that would be very expensive or impossible to replace today, particularly if your health has changed.
So if the premium increase becomes unaffordable, don't assume your only choices are either to pay it or cancel it. A lot of times, they'll offer reduced benefit alternatives. So depending on the policy, you might be able to reduce the daily or monthly benefit, or shorten the benefit period, or change the inflation protection. So those would be, you know, things you could look at before you decide to cancel it. But I think at the end of the day, you need to do your homework on all these, make some decisions, and, you know, whether or not you're willing to commit to one of these communities, and if so, that could be a great option.
Vivian: Well, and you're correct, and I appreciate that information. You've confirmed everything that, as I said, we've researched, and we're praying about it, and the Lord will lead us and we'll make the right decision. Thank you for your help this morning.
Rob West: Absolutely, Vivian. I'm confident of that as well. Thanks for your call today. James 1:5, if we lack wisdom, ask God and He'll give it generously. Stewart in Virginia, go ahead.
Stewart: Yes, Rob. Thank you for taking my call. I have pretty much the same problem that Vivian has. We've had a long-term health care since 2001. The problem was it kept going up and up. This year, the premium increased by over $1,200, and we have reached a saturation point. Now, we've let it go, but I have a year to renew it. And we're at the point where, you know, I don't understand why they keep going up and up and up, you know.
Rob West: Yeah. Well, it's I understand the challenge here, Stewart, and I'm so sorry to hear you're in this situation. You know, keep in mind, you know, this isn't related to you. They're not saying you're older or less healthy now, necessarily, in raising your individual rate. These rate increases apply to a class of similar policies and are subject to state regulation. I know that doesn't change the reality of it, but that's really why it's happening.
And as I mentioned before, these policies were misunderstood, they were new when they were being sold, they were not priced properly, that's a problem industry-wide, and now they're having to, on the aggregate, increase dramatically these premiums just to be able to, you know, make them viable. You know, what I would say is before that year runs out, I would go back, just like I said to Vivian, and perhaps look at some other options. You know, could you reduce or modify the inflation protection? Could you reduce the daily or monthly benefit? Shorten the benefit period.
So reducing a lifetime benefit, for instance, to a smaller number of years when the average person needs long-term care for somewhere between 18 months and 3 years, you know, you might be paying for unlimited, I don't know, but, you know, if you shorten that to something that's more typical, at least you'd get those core years where somebody typically needs this type of care covered and do it on a more affordable basis. You could also increase the elimination period. This is essentially the number of months before it kicks in.
So those would be your next steps before you just let it go altogether, because it probably is a great policy, something that might not even be available today. But it's got to be affordable, because if you can't pay for it, it doesn't do you any good because it's eventually going to lapse.
Stewart: They gave other options. One was reducing from three years to two years, but the premium didn't decrease that much, maybe just a few hundred dollars or so.
Rob West: Ah, yeah, so that doesn't really help too much. Yeah.
Stewart: No. So, but I appreciate your help.
Rob West: All right, Stewart. I wish I had a solution for you. I know this is challenging, but we're going to trust the Lord on this, ask Him to give you some wisdom, and if you need an advisor to look over this and help you with some other possible scenarios here, don't hesitate to reach out there in Virginia. FindACCA.com to find a certified Kingdom advisor in your area. God bless you, sir. We're going to take a quick break and then come back with our final segment. A few lines open. Your questions at 800-525-7000. Stick around. We'll be right back.
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Rob West: Thanks for joining us today on Faith & Finance Live. I'm Rob West. Here in our final segment, we'll get to as many calls as we can. 800-525-7000, you can call right now. Let's go to Arkansas. Jim, I understand you have a long-term care question as well. Go ahead.
Jim: Yes, sir. Good morning. I do. Thank you for your program. I listen every morning streamed through my hearing aids as I go about doing whatever I do. I love it. I get so much information. Going back to your guest, Nathan, with this long-term care, I have had a health savings account for many, many years, have never touched it, am not contributing to it anymore, I'm not eligible anymore, but I have about $180,000 in it. And had always been told that I could use that to pay for nursing home care. And now I'm finding out that that's not exactly right. I can't pay a nursing home directly for the monthly fee for assisted or skilled nursing care. And so, number one, I don't know if you've heard anything on the national level of maybe making that where we can be more flexible with how we spend our HSA. The other is that if we can't, I know that one of the ways that I could spend it down was to pay my premiums for Medicare. Mine are automatically drafted or deducted from my Social Security check, but it's my understanding that I could then go in monthly and reimburse myself for those premiums. So I'm wondering if I need to start doing that. So, just a lot of stuff unknown.
Rob West: Yeah, let me weigh in on some of this here because this is an important topic and you raised a number of issues here. You know, there may be some confusion between paying long-term care insurance premiums from an HSA and using HSA money to pay actual nursing home expenses. So under the IRS rules, an HSA can potentially be used tax-free for qualified long-term care and nursing home expenses. The fact that the expense is a nursing home does not automatically make it ineligible. It's really this distinction, and that is: if you're in the nursing home primarily to receive medical care, then qualifying costs can include both the care and potentially meals and lodging. If you're there primarily for personal reasons rather than medical care, the room and board generally doesn't qualify merely because it's a nursing home—just the medical and nursing portion would qualify.
You know, qualified long-term care services can also qualify when the person is chronically ill and the services are provided under a plan of care described or prescribed by a healthcare practitioner. In terms of the One Big Beautiful Bill, it did make several HSA changes, but it didn't create a new blanket rule making all nursing home room and board HSA eligible. So that wouldn't necessarily be there.
I would just say before concluding that you can't use the HSA, I'd find out who told you that and why. And if it's the HSA administrator, I'd ask, "Are you saying the nursing home expenses don't meet the IRC qualified medical expense requirements, or are you saying your HSA simply won't pay the facility directly?" Because those are different issues. HSA distributions can be taken to reimburse yourself, to your point, for qualified medical expenses. The HSA provider doesn't necessarily have to pay the nursing home directly. Does that make sense?
Jim: Yes, sir. Yes, sir, it does.
Rob West: Okay. All right. So I think maybe that's the next step, is just to clarify what's actually being said here and see if, in fact, you would be able to use this for a nursing home. Because again, if it's primarily for medical purposes, then almost—if not all of it—almost nearly all of it could be paid for out of that HSA.
Jim: Okay. And then the other idea about maybe starting to reimburse myself for those Medicare premiums, is that actually a thing I could do?
Rob West: Yeah, you mean from the HSA?
Jim: From my HSA account, yes, sir.
Rob West: Yeah. So within an HSA, you can reimburse yourself for Medicare premiums if you're 65 or older. The IRS allows tax-free HSA distributions for Medicare after age 65 for Part B, Part D, Medicare Advantage premiums, and Part A premiums. The major exception is Medigap and Medicare Supplement premiums; those cannot be reimbursed tax-free from an HSA.
Jim: Okay, okay. I wouldn't want to do it to the point where I spend down all of this money, but that's because even though it sounds like a lot, $180,000, you can go through it if you're stuck in one for a while. Fortunately, we have other funds that could pay, but you just have in the back of your mind, "I didn't work and save all my life to then have to spend it all on a nursing home," you know? So, just thinking about all of those things. Okay, very good. Very good, thank you so much.
Rob West: Yeah, and one other thing I would mention here—you're welcome—there's no requirement that that reimbursement has to occur in the same year the expense was incurred. So you could go back and reimburse yourself for prior expenses, even if it was after the year the expense took place. So I think you've got a lot of options here, but I would dig into this a bit further and just get some clarification as to why you're being told it can't be used for nursing home care, because that's not what the IRS rules and regs say. There are some stipulations, but depending on why you're there, you absolutely could pull that money from your HSA.
Hey Jim, thanks for your call. We appreciate you being a regular listener. Stay on the line; I'm going to send you a copy of our latest magazine, Faithful Steward. I think it'll be an encouragement to you, just as our thanks for being on the program today. Let's go to Texas. Hi Nancy, go ahead.
Nancy: Good morning.
Rob West: Hi!
Nancy: Am I coming through okay?
Rob West: You sure are. Yes, ma'am. How can I serve you today?
Nancy: Okay. I have a long-term care policy with a major company, and I've incurred like about $18,000 expense, and they're refusing to reimburse me. I needed a caregiver from last August. I fell and broke my right wrist. I'm right-handed and I couldn't use it, so I got a caregiver to come in and help me here. Then from that, they found cancer, and I had to start chemo treatments. And the chemo put me down; I was so sick. And so I got a caregiver. And they're refusing to reimburse me. So I'm thinking, what do I need? Do I need to see a lawyer, but what kind of a lawyer? Who do I need to see to guide me through this?
Rob West: Mm, yes. Well, first of all, I am so sorry, Nancy, for what you've been walking through. I know this is a lot, and it's been weighing heavily on you. Let me just kind of walk through how these policies work and what are called the benefit triggers, and let's see if we can determine whether or not this refusal is correct—as much as I don't even want to consider that. I think we just need to look at the facts here because I don't want you to spend a lot of money on something that ultimately is not going to benefit you if, in fact, their refusal is in line with how these work.
The key issue isn't simply whether you were sick enough to need help. These long-term care insurance policies pay according to the policy's benefit triggers, and most policies require you to need what's called substantial assistance with at least two of the six activities of daily living in order—or have a qualifying cognitive impairment. So, for example, a broken dominant wrist plus chemotherapy, you may have needed assistance with two, but if your medical records and caregiver documentation establish that you couldn't perform two qualifying ADLs (activities of daily living), that could be very important to your appeal.
But you would need to see if, in fact, you have that documentation. If you can get that documentation or you already have it, then you would want to start by just requesting the denial in writing. So you'd want to go to the insurer and ask, "What specific provision of my policy are you relying on to deny reimbursement?" Also ask whether they're denying you because you didn't meet the activities of daily living trigger, or maybe they're saying you didn't satisfy the elimination period (meaning the waiting period before you can begin to collect), or maybe they'll say the caregiver wasn't an eligible provider. There may be some other reason. You need to know what was the reason for that denial.
And then, if it's that you didn't qualify based on the benefit trigger, well then you need to get documentation from your doctors—either your primary physician or your oncologist—and they need to be able to say how your wrist injury and chemotherapy affected your ability to perform two of these six activities of daily living during the period you employed the caregiver. And then with the caregiver invoices and the dates and the descriptions, you could file that formal appeal and hopefully get that reversed.
Could you need an attorney? Yes, especially if we're talking about a substantial amount of unpaid caregiver expenses. But I would exhaust these other options first and see if you can't settle this directly with the insurance company. The starting point is the exact reason on the denial letter; that really is going to tell us a lot. Once you get that, feel free to call me back, and I'd love to talk to you about it a bit further.
Unfortunately, I'm out of time, Nancy, but I so appreciate your call today. I hope I've given you a few things to work off of, and if we can serve you further in the future, please reach out.
Folks, so glad to have you along with us today. Big thanks to my team today: Patty, Devin, Taylor, and everybody here at Faith & Finance. Don't forget, in just less than two weeks in our partnership with Preborn, looking to fund 1,500 free ultrasounds, $28 at a time. Help us out at faithfi.com/preborn. Then come back and join us tomorrow. We'll see you then. Bye-bye.
Long-term care isn’t just a health issue—it can become a major financial and family decision. Most of us hope we’ll never need extended care, but wise stewardship means planning for possibilities. On this Faith & Finance on AFR, Rob West and Nathan Sanow explain long-term care, what insurance can and can’t do, and how to build a plan that protects both your finances and your family. Then, it’s on to calls.
(00:00) Rob West and Nathan Sanow examine long-term care options
(08:30) Rob West and Nathan Sanow continue their conversation on long-term care options
(20:56) In the News: New regulations for no tax on tips reporting
(22:48) Caller Mike: Saving for young grandchildren. Trump accounts or 529 plan
(27:10) Caller Vivian: Long-term Care Policy vs Continuing Care Retirement Community
(31:45) Rob West continues his conversation with Vivian on considering a Life Plan Community
(36:52) Caller Stewart: Increasing cost of Long-term Care Policy
(42:26) Caller Jim: Approved uses for funds from Health Savings Account
(48:54) Caller Nancy: Long-term Care Policy refusing to reimburse for caregiver expenses
Long-term care isn’t just a health issue—it can become a major financial and family decision. Most of us hope we’ll never need extended care, but wise stewardship means planning for possibilities. On this Faith & Finance on AFR, Rob West and Nathan Sanow explain long-term care, what insurance can and can’t do, and how to build a plan that protects both your finances and your family. Then, it’s on to calls.
(00:00) Rob West and Nathan Sanow examine long-term care options
(08:30) Rob West and Nathan Sanow continue their conversation on long-term care options
(20:56) In the News: New regulations for no tax on tips reporting
(22:48) Caller Mike: Saving for young grandchildren. Trump accounts or 529 plan
(27:10) Caller Vivian: Long-term Care Policy vs Continuing Care Retirement Community
(31:45) Rob West continues his conversation with Vivian on considering a Life Plan Community
(36:52) Caller Stewart: Increasing cost of Long-term Care Policy
(42:26) Caller Jim: Approved uses for funds from Health Savings Account
(48:54) Caller Nancy: Long-term Care Policy refusing to reimburse for caregiver expenses
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