State lawmakers have a huge stake in improving private long-term care planning.
States now spend about $100 billion per year, or about 6 percent of their $1.7 trillion in annual revenue, on Medicaid nursing home benefits and other Medicaid long-term care benefits for the poor, and for residents who have used “Medicaid planning” to protect their assets. The share of state revenue going to fund Medicaid long-term care benefits could rise sharply starting around 2031, when the baby boomers begin to flow into the 85-and-older age category.
The state senators, representatives and assembly members are continuing to work on long-term care insurance models laws and model law updates at the National Conference of Insurance Legislators. Private long-term care insurance showed up often in session agendas and document packets for NCOIL’s recent summer meeting, which took place in Portland, Oregon, and ended Sunday.
Lawmakers also continue to shepherd long-term care insurance bills through state legislatures.
For a look at five state lawmakers’ recent long-term care insurance goals, read on:
1. An Arkansas state senator wants to protect long-term care insurance premium tax credit programs.
The National Conference of Insurance Legislators first adopted a long-term care insurance premium tax credit model law in 2001. A state that chooses to adopt a law based on the model can provide a state income tax break for residents who buy private long-term care insurance. The model itself provides a tax credit for up to 15 percent of the cost of the premiums.
The group puts models through a routine renewal process every five years. The group renewed the long-term care insurance tax credit model at its spring meeting.
A look at the meeting summaries in the group’s summer meeting packet shows that lawmakers had to defend the existence of the tax credit model. Some state lawmakers, for example, wondered whether the tax credits cause anyone to buy long-term care insurance. Some wondered why supporters were in a rush to renew the model law.
Arkansas state Sen. Jason Rapert, who is the president of Bigelow-based Rapert Financial & Associates, a firm that sells long-term care planning services along with a wide range of other financial and insurance services, spoke up for renewing the model quickly at a National Conference of Insurance Legislators Life Insurance & Financial Planning Committee meeting in February. He said policymakers need to encourage people to buy long-term care insurance now, to reduce the future strain on state budgets when people retire.
2. A Vermont state representative wants to get more information about how long-term care insurance premium tax credits are actually working.
Some participants at the National Conference of Insurance Legislators life committee meeting in February wondered whether the long-term care insurance premium tax credit actually works.
Vermont state Rep. William Botzow said he would like to see more information about whether the long-term care insurance premium tax credit is really important, and whether it’s good government policy, according to the meeting minutes.
North Dakota state Rep. George Keiser said he does not believe there is any evidence showing that the tax credit has had a significant effect on sales of long-term care insurance. “The people who were going to buy it have bought it, and the tax credit is an added benefit,” according to the summary of Keiser’s remarks.
3. A North Dakota state representative wants states to help consumers move Long-Term Care Partnership program coverage across state lines.
A state can use a Long-Term Care Partnership program to encourage residents’ own, private long-term care planning efforts, by coordinating Medicaid nursing home benefits with the private long-term care insurance benefits. Residents who buy an approved Partnership policy can protect more assets than usual if they run out of private long-term care insurance benefits and end up needing Medicaid benefits.