Long-Term Care Premium Deduction Limits 2027 Are Already Set

Most of the 2027 tax figures are still waiting on a number the government never collected. This one is not. The age-based limits on long-term care insurance premiums and the per diem limit on long-term care benefits depend on a single monthly reading that was published weeks ago, which means we can state them now with more confidence than almost anything else on the 2027 list. The short answer: for 2027, the amount of long-term care premiums that counts as a medical expense is $500 at age 40 or under, $940 from 41 to 50, $1,890 from 51 to 60, $5,030 from 61 to 70, and $6,290 above 70, with a per diem limit of $440. Those are our reconstruction of the formula, not yet an IRS publication, but the only input that matters is already in.

Why this figure is different from the rest of the 2027 list

Each autumn the IRS publishes a large set of inflation-adjusted amounts, and most of them follow a common recipe: take the chained consumer price index (the C-CPI-U, a version of the CPI that accounts for shoppers switching products when prices rise), average it over the twelve months ending August 31, and compare it with a base year. That recipe has a problem this year. The Bureau of Labor Statistics did not collect October 2025 data because of the government shutdown, so the twelve-month average has a hole in it. Analysts have to choose between averaging only the eleven months that exist and imputing a value for October. For many 2027 figures, that choice can move the result, which is why the figures that depend on it stay provisional until the IRS announces its method.

Long-term care limits sidestep the whole debate. The statute that governs them, 26 U.S.C. § 213(d)(10), does not ask for a twelve-month average. It asks for one month and one component of the index. The text compares “the medical care component of the C-CPI-U (as defined in section 1(f)(6)) for August of the preceding calendar year” with “such component of the CPI (as defined in section 1(f)(4)) for August of 1996.” Two single-month readings, a ratio between them, and a rounding rule: that is the entire machine. October 2025 never enters it. The medical care reading for August 2026 was published on September 11, 2026, so the one number the formula needed arrived before this article was written.

That is the angle worth keeping in mind as other 2027 projections wobble between methods. This one has no method fork to resolve.

How the limits are built

The formula starts from base amounts set in 1997 for five age bands: $200 for age 40 or under, $375 for 41 to 50, $750 for 51 to 60, $2,000 for 61 to 70, and $2,500 for anyone older. The per diem limit in 26 U.S.C. § 7702B(d)(4) started at $175. Each year the amounts are multiplied by the ratio described above and rounded to the nearest multiple of $10.

There is one wrinkle in how that ratio is built. The statute asks for the medical care component of the C-CPI-U in the numerator, but the C-CPI-U did not exist in 1996, so the denominator has to be the conventional CPI for that month. The statute also lets the Treasury prescribe an adjustment it considers “more appropriate,” so a reader cannot simply plug raw index values into a spreadsheet and assume the IRS did the same. Our reconstruction chains the series: it takes the CPI-U medical care index for August 1996 (229.2) and carries it forward to August 2016 (468.379), then links that to the C-CPI-U medical care index, which stood at 181.028 in August 2016, and follows that series up to August of the year before the tax year.

The test of any reconstruction is whether it reproduces numbers the IRS has actually published. This one does. Using the C-CPI-U medical care reading for August 2025 (219.791), it produces a 2026 factor of 2.48112, and every one of the six published 2026 figures in Rev. Proc. 2025-32 comes out exactly: $500, $930, $1,860, $4,960, $6,200, and a $430 per diem. Six for six is not proof the IRS will use the same chaining next month, but it is a strong reason to trust the method.

For 2027 the same procedure uses the August 2026 reading of 222.917, which gives a factor of 2.51640. The medical care component of the chained index rose 1.42 percent between August 2025 and August 2026 (219.791 to 222.917). That is a modest gain, and it explains why the limits move so little this year.

The 2027 table, side by side with 2025 and 2026

Compare the 2026 and 2027 columns and the pattern is clear. The youngest band does not change at all, because $503.28 rounds back down to $500. The 41-to-50 band gains $10, the 51-to-60 band gains $30, the 61-to-70 band gains $70, and the band above 70 gains $90. The per diem gains $10. The year before, the same bands rose by $20, $30, $60, $150, and $180 respectively, with the per diem up $10, so 2027 is a smaller step than 2026 for the older ages. Because the medical care component rose only 1.42 percent over the year, the limits climb slowly, and the older bands, which have the biggest base amounts, show the largest dollar gains.

How close any figure is to changing

Rounding is the only place real uncertainty remains. The 41-to-50 limit lands at $943.65, which rounds down to $940, and it would need to reach $945 to round up to $950. That makes it the premium limit nearest to a different outcome, though it is still a calculation from a published index reading, not a projection. The other four premium limits and the per diem sit comfortably inside their rounding steps.

The practical conclusion is that the numbers will change only if the Treasury chooses an adjustment different from the one our reconstruction used, not because any underlying data is missing. Since the same reconstruction reproduces all six 2026 numbers, a different approach seems unlikely, though only the Revenue Procedure can say so definitively.

Where the limits actually apply

A common mistake is to treat these figures as a cap on what you can pay for long-term care insurance. They are not. They are a cap on how much of your premium counts as a medical expense for tax purposes under § 213(d)(10), and you can pay more than the limit without any penalty. The excess simply does not count. (A separate rule, new from December 30, 2025, lets some 401(k) and 403(b) plans pay up to $2,600 a year of these premiums without the 10% early-withdrawal penalty; see our guide to the qualified long-term care distribution and Form 1099-LPS.) They matter in three situations.

First, the itemized medical expense deduction. Qualifying premiums, up to your age-based limit, can be added to other unreimbursed medical costs, but only the portion of the total that exceeds 7.5 percent of adjusted gross income is deductible. That threshold makes the deduction useful mostly for households with high medical costs overall, and it only matters if itemizing beats the standard deduction, a comparison we walk through in standard vs. itemized deduction.

Second, the self-employed health insurance deduction under § 162(l), which includes qualifying long-term care premiums up to the same limits. A self-employed person gets this deduction without having to itemize, which is why the age limit can have a more direct effect on a business owner’s return than on an employee’s. If you are self-employed and also use a health savings account, our guide to HSAs for the self-employed covers how the pieces fit together.

Third, health savings accounts. An HSA can pay qualifying long-term care premiums tax-free up to the same age-based amounts. For people who see the account as a retirement vehicle, that is one more use of the money without a tax bill, and it is part of the case laid out in our look at the HSA as a retirement account. The contribution caps that feed the account for 2027 are a separate matter, covered in HSA contribution limits for 2027.

One feature applies to all three situations: the limit is per person. A married couple does not share a single limit; each spouse uses the row of the table that matches his or her own age.

Two examples with 2027 numbers

A self-employed 63-year-old paying $6,000 a year. At age 63, this person falls in the 61-to-70 band, where the 2027 limit is $5,030. Of the $6,000 in premiums, at most $5,030 counts as deductible premium. The remaining $970 is not eligible for the deduction, though it still buys the coverage. The same $5,030 ceiling would apply if this person paid the premium from a health savings account instead.

A married couple aged 72 and 68. The 72-year-old is in the band above 70, with a limit of $6,290, and the 68-year-old is in the 61-to-70 band, with a limit of $5,030. Combined, the couple can count up to $6,290 + $5,030 = $11,320 in qualified premiums, provided each spouse actually pays at least his or her own limit. If one spouse pays less than the limit, only the amount actually paid counts, so unused room for one spouse cannot be transferred to the other.

The per diem limit

The per diem figure works differently from the premium table, and it is easy to confuse the two. It applies to benefits, not premiums. Under § 7702B(d)(4), periodic payments from a qualified long-term care contract that pays a flat amount regardless of actual costs (an indemnity or per diem contract) can be excluded from income up to a daily limit without the policyholder having to prove what care actually cost. For 2027 that limit comes to $440 per day ($440.37 before rounding), up from $430 in 2026 and $420 in 2025. The per diem does not affect the premium deduction, and the two calculations never interact.

What could still change

Two things remain open, and neither involves the missing October data.

The first is timing. The IRS publishes these numbers in its annual Revenue Procedure of inflation adjustments, which typically arrives in late October or November; no date has been announced. Until then, our 2027 figures are a calculation, not a citation. A tax preparer or benefits administrator who needs a document to cite will have to wait for the Revenue Procedure.

The second is method. Section 213(d)(10) lets the Treasury prescribe an adjustment it considers more appropriate than the statutory comparison, and the chaining of the 1996 and 2016 index values is our reconstruction, not something the statute spells out. The evidence that it works is the six-for-six match on the 2026 figures. If the IRS changed its approach, the numbers could shift.

What cannot change is the shutdown gap. Whichever way the IRS handles October 2025 for the broader inflation figures, including the ones in our 2027 inflation adjustments tracker, those choices do not touch a formula that reads only August. Medicare’s IRMAA income brackets are one example of a 2027 figure that depends on the other side of that debate, and our 2027 IRMAA bracket projection shows how sensitive such figures can be. The long-term care limits are the opposite case: the data is in, the formula is fixed, and the only remaining step is for the IRS to put its name on the result.

Sources

• IRS, Rev. Proc. 2025-32 (2026 inflation adjustments, sections 4.27 and 4.62)
• 26 U.S.C. § 213, medical, dental, etc., expenses — law.cornell.edu/uscode/text/26/213
• 26 U.S.C. § 7702B, treatment of qualified long-term care insurance — law.cornell.edu/uscode/text/26/7702B
• 26 U.S.C. § 162(l), special rules for health insurance costs of self-employed individuals — law.cornell.edu/uscode/text/26/162
• Bureau of Labor Statistics, C-CPI-U medical care, series SUUR0000SAM
• Bureau of Labor Statistics, CPI-U medical care, series CUUR0000SAM
• IRS, Publication 502, Medical and Dental Expenses