Los Angeles, CA, September 12, 2012 --(PR.com
)-- Much of the debate about Medicare neglects to face the reality that the Federal Medicaid program is headed toward bankruptcy as millions of aging Americans turn to the program for their long term care needs.
“Americans want solutions and making long term care insurance premiums tax deductible and the benefits received tax free for all individuals would encourage more people to plan and not depend on our already strapped government programs,” declares Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the industry trade group. “We call on the two Presidential candidates to commit to making premiums for long-term care insurance fully tax deductible for a period of five years to encourage millions of baby boomers in their 50s and 60s to develop a meaningful long term care plan.”
Slome notes that when the nation faced a savings crisis, federal lawmakers created 401(k) programs and gave them outstanding tax advantages as a way of encouraging the growth of personal retirement savings. Today experts report that 50 million American workers are active 401(k) plan participants.
“Some eight million Americans have long-term care insurance so we have a long way to go to save the Medicare and Medicaid programs hundreds of billions of dollars that taxpayers will have to spend for long-term care for those with no other plan in place,” Slome notes. “Many states recognize that having private insurance removes them as the primary payer and some even offer tax credits that are worth more than tax deductions.”
Historically neither candidate has been willing to address long term care policy in a formal way. “The President’s health reform included the now removed CLASS Act which would have created a federal long term care insurance program,” Slome notes. “But that was the work of Senator Kennedy and not the President’s initiative. This topic and the financial implications are so important, it’s time for one or both candidates to address the issue and state how they would propose dealing with it. ”
Premiums for long term care insurance receive some limited tax advantaged treatment according to the Association but in the future individuals can only deduct premiums when their medical expenses exceed 10 percent of their Adjusted Gross Income. “When you have that many medical costs chances are you won’t health qualify for long-term care insurance,” Slome adds. “We need to make the costs for this coverage deductible for all at least for a period of years while we see if more understand the importance of planning and people take advantage of the new benefit. In the end, the potential savings to taxpayers will be enormous.”
The American Association for Long Term Care Insurance was established in 1998 to advocate for the importance of planning for long term care. To learn more or to connect with one of the Association’s staff, call the organization’s offices at (818) 597-3227 or visit the Association’s website.