Bill Proposes Tax Deduction for LTC Premiums
Legislation with bipartisan support has been introduced calling for an above-the-line deduction for the cost of long-term care (LTC) insurance premiums, along with a $3,000 tax credit for qualified individuals and their caregivers for long-term care expenses. In addition, the legislation calls for inclusion of long-term care coverage in employer cafeteria plans and within flexible spending accounts (FSAs).
The legislation, known as the Ronald Reagan Alzheimer's Breakthrough Act of 2004, was introduced by Reps. Nancy Johnson, R-CT and Earl Pomeroy, D-ND. Similar legislation has been proposed in the past but was never adopted. Supporters of the new act believe the recent death of President Ronald Reagan—who suffered from Alzheimer's disease—will increase its chances of passage.
Americans for Long-Term Care Security (ALTCS), a 32-member bipartisan organization based in Washington, D.C., praised the introduction of the legislation. ALTCS has stated that more than half the U.S. population will require some type of long-term care during their lives, and that more than six million elderly Americans currently need assistance from family or friends in order to live at home.
"We view this bill as having short-term and long-term value," said Janet Stokes Trautwein, vice president of government affairs for the National Association of Health Underwriters and a member of the ALTCS board of directors. "It will immediately present millions of American families with important choices including long-term care insurance as compared to self-financing or spending down assets to qualify for public programs. In the future, it will relieve fiscal pressure on state and federal programs, such as Medicaid, which today represents 57% of all spending on all long-term care, and estimates show that spending on long-term care could double by 2025."
Another member of the ALTCS board, Diane Boyle, managing director of the Association of Health Insurance Advisors (AHIA), said: "Studies have shown that long-term care is the largest unfunded liability confronting the boomer generation. We are less than ten years from when the first wave of boomers will turn 65, so we must be prepared to move this kind of long-term care legislation forward."
