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Senator Klobuchar Urges Tax Benefits for Long-Term Care Insurance

Says bipartisan measure could save billions in Medicaid costs

March 31, 2009

Washington, D.C. - U.S. Senator Amy Klobuchar (D-Minn.) joined with Senator Charles Grassley (R-Iowa) to introduce national legislation that would save Medicaid billions while making it easier for the nation’s workforce to afford long-term insurance premiums.  Klobuchar, Grassley and five additional Senators introduced a bill to permit employees to pay for long-term care insurance premiums and out-of-pocket expenses on a tax-deferred basis.

While costs for elder care continue to rise, only seven percent of employees have the option of signing-up for long-term care insurance and only ten percent of seniors have the benefit.

“Millions of families are coping with the challenges and costs of caring for the long-term health of their loved ones,” said Klobuchar.  “With the skyrocketing costs of long-term care, we now need policies to help families with their elder care responsibilities.”

The Long-Term Care Affordability and Security Act of 2009 would change the tax code, to give employers the option of allowing tax-deferred long-term insurance premiums and provide protections for consumers who buy long-term care insurance.

According to the American Council of Life Insurers, which has endorsed the legislation, savings could total $30.6 billion annually on Medicaid nursing home expenses and out-of-pocket expenses by 2030 if 75 percent of the population between the ages of 40 and 65 who can afford long-term care insurance were to purchase and maintain long-term care policies throughout their older years.

Klobuchar has also championed the AGE (Americans Giving care to Elders) Act to assist families who care for aging family members.   It is designed as a starting point to relieve the financial and other burdens faced by family caregivers.

The Long-Term Care Affordability and Security Act of 2009  is also sponsored by Senators Collins (R-Maine), Ensign (R-Nev.), Graham (R-S.C.), Snowe (R-Maine) and Lincoln (D-Ark.).

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