LTC Bullet: Clinton Considering LTC Tax Credits
Monday December 7, 1998
The Wall Street Journal reported today (12/7/98) that the Clinton administration is working on a proposal to provide tax credits to defray the cost of long-term care for the elderly and disabled. Clinton aides say the proposal is a leading candidate to be in the President's fiscal 2000 budget. Although details of the package are unfinished, the cost is expected to be in the range of $5 billion over five years.
The President's interest in addressing long-term care financing is a positive development. Yet, neither tax credits nor tax deductions alone will motivate a majority of Americans to plan ahead for long-term care.
As long as people can avoid the premiums for long-term care insurance and obtain Medicaid after the insurable event occurs while easily evading the liability for spend-down and estate recovery, the purchase of private insurance will continue to lag. Tax incentives for long-term care can be a positive and powerful tool only in conjunction with a consistent public policy that no longer rewards people for failing to plan ahead.
The Center for Long-Term Care Financing's "LTC Choice"
plan achieves both objectives. It provides a strong positive incentive
for people to purchase LTC insurance early, and it will save the
government more than enough revenue to pay for the whole cost
of full LTC insurance tax deductibility. The Center has supplied
the appropriate White House officials with copies
Source: Greg Hitt, "Clinton Considers Tax Breaks for Long-Term
Elderly Care," WSJ, December 7, 1998. http://interactive.wsj.com/archive/retrieve.cgi?id=SB91298930632