U.S. bill would encourage long-term care insurance

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U.S. bill would encourage long-term care insurance

By Julie Rovner

Reuters Health, May 15, 2003

WASHINGTON - As 77 million "baby boomers" march toward their high health spending years, two U.S. House members Wednesday introduced legislation that would encourage them to purchase insurance to cover the costs of long-term health care -- something most private insurance plans and the Medicare program do not cover.

"Nearly everyone should have long-term care coverage, but almost no one does," said Rep. Earl Pomeroy, D-N.D., his state's former insurance commissioner. "If you don't have it, you've got to impoverish yourself for Medicaid to pay for prolonged care."

The bill introduced by Pomeroy and Rep. Nancy Johnson, R-Conn., would make long-term care insurance more easily tax deductible. It would permit employers who provide "cafeteria" benefits plans to offer long-term care insurance as part of those plans, and it would provide a tax credit of up to $3,000 for family members and others who deliver long-term care services.

"The astounding costs of long-term care can wipe out a family's savings," said Johnson. "As America's population has gotten older, its seniors are living longer with multiple, chronic health problems that require expensive long-term care. We need to help families secure access to the long-term care that their loved ones need, and not break the backs of our kids to pay for it."

But while just about everyone in Congress agrees that more people should be encouraged to insure themselves against the high costs of long-term care -- nursing homes cost an average of about $60,000 a year -- enacting tax incentives has proved problematic.

This is at least the third time Johnson, who chairs the Ways and Means Health Subcommittee, has introduced the legislation. But she failed to get the long-term care provisions, estimated to cost about $33 billion over the next decade, into the $550 billion tax bill passed by the House last week.

A spokesman said long-term care would be the "next big policy issue" Congress will address after it reforms the Medicare program and adds a prescription drug benefit.