Bill Introduced That Gives Deduction For LTC Insurance Premiums
Two members of Congress have introduced legislation that would establish an above-the-line deduction for the cost of long term care insurance premiums.
Reps. Nancy Johnson, R-Conn., and Earl Pomeroy, D-N.D., introduced the legislation, called the Long-Term Care and Retirement Security Act, at a press briefing last week.
The legislation (bill number not available at press time) calls for a phased-in deduction over six years.
Under the bill, 25% of the premium could be deducted from 2003 through 2005. The deduction would then be 35% in 2006, 65% in 2007 and 100% in 2008 and thereafter.
An above-the-line deduction means it is available to all taxpayers, whether or not they itemize.
The legislation also allows long term care policies to be offered under cafeteria plans and flexible spending accounts.
Pomeroy says nearly everyone should have LTC coverage but almost no one does.
“If you dont have it,” he says, “youve got to impoverish yourself for Medicaid to pay for prolonged care.”
This legislation, Pomeroy says, can stabilize public assistance while preserving individual choices and protecting family assets.
Johnson says senior citizens are living longer with chronic health problems that require expensive LTC. “The time for action was yesterday,” she says.
The American Council of Life Insurers, the Health Insurance Association of America, the National Association of Health Underwriters and the Association of Health Insurance Agents all endorsed the Johnson-Pomeroy bill.
In other news, the CEO of the National Association of Insurance and Financial Advisors, says Congress can play an invaluable role in ensuring a healthy environment for addressing the insurance and financial needs of senior citizens.
In testimony before a House Financial Services Committee panel on retirement security needs of seniors, David F. Woods says Congress can pass legislation that would help build trust in the industry.
Woods, who is also president of the Life and Health Insurance Foundation for Education, notes that last year, the House of Representatives approved legislation that would have created an anti-fraud network among all financial regulators to allow them to share information about potential rogue actors in the financial services industry.