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LTC Bullet:

Smart ALEC on LTC Policy

Wednesday September 13, 2000


Policy-makers and long-term care advocates: Check out the recent policy guide, "Senior Century: Senior's Needs and Long-Term Care" by Merrill Matthews, Ph.D. of the American Legislative Exchange Council (in "The State Factor," Volume 26, Number 1, June 2000.) See below for how to obtain a copy.

Matthews provides an overview of pressing senior issues from changes in the life span to changes in Medicare coverage and urges new strategies that will enhance private sector solutions. Specifically, he recommends tax credits for long-term care insurance, development of programs to create and access private assets for long-term care expenses, and tightening Medicaid eligibility. Do any of these ideas sound familiar? The Center for Long-Term Care Financing's own LTC Choice proposal outlines a program that would offer loans to the middle class to access the equity in their estates for long-term care, limit Medicaid eligibility to the truly needy, and thereby create real incentives to insure against the risk of long-term care. Matthews cites the Center in his analysis and draws on the LTC Choice proposal for his recommendations. With this kind of convergence on the cause and solution to meeting seniors' needs for long-term care, progress can't be far behind!

The American Legislative Exchange Council (ALEC) is a bipartisan association of state legislators interested in promoting free markets, limited government, federalism, and individual liberty. Last year ALEC members introduced over 2,200 pieces of free-market legislation and over 320 of these became law. This policy guide includes a sample resolution on the promotion of long- term care insurance for ALEC members and other policy makers to adopt in their states. To order copies of "Senior Century," contact Joe in Publications at (202) 466-3800, ext. 271. For more information on ALEC's aging policy, contact Karen Miller, Director of the Health and Human Services Task Force, ALEC, 910 17th St. NW, Fifth Floor, Washington, D.C. 20006, Tel. (202) 466-3800.

Here's the Resolution in full:

*Resolution on the Promotion of Long-Term Care Insurance for Individuals*

Whereas, the baby boom generation is beginning to retire, and funding for Social Security and Medicare will thus put a strain on the financial resources of younger Americans; and

Whereas, Medicaid was designed as a program for the poor, but in many States Medicaid is being used for middle income elderly people to fund long-term care expenses; and

Whereas, in the coming decade, people over 65 will represent up to 20 percent or more of the population, and the proportion of the population composed of individuals who are over 85, who are most likely to be in need of long-term care, may double or triple; and

Whereas, with nursing home care now costing $40,000 to $50,000 on average per year, long-term care expenses can have a catastrophic effect on families, wiping out a lifetime of savings before a spouse, parent or grandparent becomes eligible for Medicaid; and

Whereas, many people are unaware that most long- term care costs are not covered by Medicare and that Medicaid covers long-term care only after the person's assets have been exhausted; and

Whereas, widespread use of private long-term care insurance has the potential to protect families from the catastrophic costs of long-term care services while, at the same time, easing the burden on Medicaid as the baby boom generation ages; and

Whereas, the Federal Government has endorsed the concept of private long-term care insurance by establishing Federal tax rules for tax-qualified policies in the Health Insurance Portability and Accountability Act of 1996; and

Whereas, the Federal Government has ensured the availability of quality long-term care insurance products and sales practices by adopting strict consumer protections in the Health Insurance Portability and Accountability Act of 1996.

Now, Therefore Be It Resolved that {State} should take all appropriate steps to inform the public about the financial risks posed by rapidly increasing long- term care costs and about the need for families to plan for their long-term care needs; and

Be it Further Resolved that {State} should take all appropriate steps to inform the public that Medicare does not cover most long-term care costs and that Medicaid covers long-term care costs only when the beneficiary has exhausted his or her assets; and

Be it Further Resolved that {State} will encourage the Federal Government to determine to what extent tax rules may discriminate against long-term care insurance policies, and to look for ways to remove such barriers and implement new incentives for the purchase of long-term care insurance.