Plans

The comprehensive is the most common type of plan.  It provides care in your own home, an assisted living facility or in a  nursing home.  Nursing home and home health care plans can also be sold separately.   

California Partnership, Tax Qualified and Non-Tax Qualified Plans 

"California Partnership" is a tax qualified plan in which you can protect a certain amount of money, should you need MediCal in the future. It protects dollar for dollar. For example, if you had a three year plan with $100 daily benefit (that is, 1095 days times $100), you have protected $109,500. This amount of money is exempt if you still need care after the three years and qualify for MediCal. This coverage provides a safety net for people who take out less than a lifetime plan.

The "Non-Tax Qualified" plan is not tax deductible. It has not been determined whether the IRS will tax your benefit dollars in the future. One must be deficient in two activities out of seven to qualify for benefits. The activities are ambulation (not included in the tax qualified plan), bathing, continence, dressing, eating, toileting, and transferring. Cognitive impairment such as Alzheimer's Disease is covered as well as other organic disorders.

"Tax Qualified" means that the premium is tax deductible, provided that your medical expenses exceed 7 1/2 % of your adjusted gross income. The benefits from this plan cannot be taxed as ordinary income.  However, the benefits are more difficult to trigger than with a non-tax qualified plan: One must be deficient in two activities of daily living out of six, and a Doctor must also determine that the care received will be for 90 days or longer. 

A C-Corporation can deduct 100% of the premium. Companies can get group rates and provide special benefits for top management.  Some corporations pay a one time only payment and receive a policy for life and deduct the entire premium in one year.

In the case of self-employed individuals, the premiums paid are included in his/her gross income with a deduction based on an individual chart (without regard to the 7.5% AGI threshold).