AUGUST 3, 2005 -- Senate Finance Committee Chairman Charles E. Grassley, R-Iowa, has introduced legislation he said would help make long-term care more affordable and accessible for older Americans and individuals with disabilities.
"This legislation would expand access to health care services, create a system that promotes home- and community-based care, empower more individuals to fully participate in community life and create incentives to help people afford the lifestyle they've worked so hard to achieve long into retirement," Grassley said in a statement. Senate Democrats Evan Bayh of Indiana and Hillary Rodham Clinton of New York are co-sponsoring the bill (S 1602).
In a July 29 floor speech, Grassley noted that long-term care can cost $50,000 a year, which forces many individuals to deplete their savings to pay the bill. When individuals cannot afford to pay, Medicaid does, Grassley said, noting that the program spent nearly $93 billion on long-term care services in 2002.
"With our aging population, one thing is clear: Spending will only increase," he said.
Among its provisions, Grassley's bill would require that states disregard benefits paid under a long-term care insurance policy when determining eligibility for Medicaid. The measure also would incorporate into the definition of qualified long-term care services a series of consumer protections recommended by the National Association of Insurance Commissioners (NAIC).
Individuals who purchase a policy that have these consumer protections would be eligible for an above the line tax deduction and a tax credit for out-of-pocket expenses made by caregivers, Grassley said. The tax credit would be phased-in over four years, starting with $1,000 in 2005 and reaching $3,000 in 2009, phasing out by $100 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds the threshold amount set at $150,000 for a joint return and $75,000 for an individual return.
The bill also would expand the long-term care partnership program that currently operates as a demonstration in four states. Such partnerships, Grassley said, combine private long-term care insurance with Medicaid coverage once individuals exhaust their insurance benefits.
In addition, the measure would give states the option of providing home- and community-based services as part of their state Medicaid plan. "In doing so, the bill gives states the flexibility to design long-term care benefits that will reduce the reliance on costly institutional settings and meet the needs of elderly and disabled individuals who overwhelmingly wish to remain in their homes and communities," Grassley said.