NU Online News Service, June 21, 12:01 p.m. – The Health Insurance Association of America, Washington, has put out a statement praising H.R. 4946, the Improving Access to Long-Term Care Act of 2002.
The House Ways and Means Committee approved the bill earlier this week.
Dr. Donald Young, president of HIAA, accentuates the positive in the HIAA statement.
Although H.R. 4946 is “quite limited in scope, the bill sets an important precedent,” Young says. “If this proposal moves forward, long-term care insurance premiums will move closer to being granted a full above-the-line tax deduction. This is precisely the kind of incentive Americans need to purchase long-term care insurance in greater numbers.”
HIAA hopes to work with Democrats as well as Republicans to “improve the current provisions” in the bill, Young says.
If enacted, H.R. 4946 would create a new long-term care deduction for individuals earning less than $40,000 a year and married couples earning less than $80,000 a year.
The deduction, which could eventually amount to a maximum of 50% of the premiums, would be an “above-the-line” deduction, meaning that individuals could take it even if they also took the standard deduction when paying their income taxes. Under the current law, individuals and couples can deduct LTC insurance premiums only if medical expenses eat up more than 7% of their taxable income.
Representatives for the American Council of Life Insurers, Washington, have emphasized their concerns about the income limits on the proposed deduction, and the fact that H.R. 4946 makes no provision for allowing workers to pay LTC insurance premiums through employer-sponsored cafeteria plans or flexible spending accounts.