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Klobuchar Introduces 3 Bills to Protect & Support Seniors and Their Families

Legislation Is Aimed at Stopping Abuses in Long-Term Care Insurance

August 6, 2009

Washington, D.C. – With Minnesota’s senior population expected to more than double by 2035 with the aging of the Baby Boom generation, U.S. Senator Amy Klobuchar today introduced three separate pieces of federal legislation designed to support family caregivers and protect consumers from abuses in long-term care insurance.

Co-sponsors include Senator Herb Kohl (D-WI) and Senator Barbara Mikulski (D-MD).  Two of Klobuchar’s bills will protect consumers by preventing abuses in the long-term care insurance market.  A third bill will help relieve the financial and other burdens faced by family caregivers. 

“More families are looking to buy long-term care insurance, but the insurance companies haven’t always played fair,” said Klobuchar.  “I believe consumers have a right to know exactly what’s in their insurance policies and they deserve to have their claims paid promptly without having to go to court.”
 
Klobuchar added:  “Families continue to be the main providers of care for aging or ailing relatives.  It’s important that they get the support they need, so seniors are able to live independently and stay in their own homes as long as possible.”

Between 2005 and 2035, Minnesota’s population over age 65 will more than double (from 623,200 to 1.4 million), according to the Minnesota State Demographic Center.  Minnesota’s 85 and older population is also expected to more than double in the same period (from 103,000 to 222,000).

The size of the older adult population is directly related to the demand for long-term care.  About 25 percent of older adults age 65 to 74 are disabled, in addition to 42 percent of older adults age 75 to 84, and 68 percent of older adults age 85 or older.

Klobuchar’s three bills will help relieve the burden on older Americans and those who care for them.

The Long-Term Care Insurance Consumer Right-to-Know Act will help consumers understand exactly what is covered in their long-term care policies.  Too often, these written policies have been so lengthy and legalistic that consumers are confused or unable to understand what limits may apply to their benefits.  Under this legislation, insurance companies must provide consumers with an easy-to-understand one-page, standardized disclosure form when they purchase a long-term care policy. 

The Long-Term Care Integrity Act will protect consumers who have purchased long-term care insurance and are seeking claims on their policies.  The legislation calls for creation of an independent third-party review board to address one of the most common complaints about long-term care policies:  the denial of appropriate and timely benefits by insurance companies.

Currently, those who are denied benefits must go to court, which is expensive and time-consuming when people are most vulnerable and in need.  While some 8 million Americans have already purchased long-term care insurance policies, there have been growing complaints about the refusal of insurance companies to pay claims.  Even with the independent review board, consumers would still have the right to pursue a dispute in court.

The Americans Giving Care to Elders (AGE) Act will provide financial relief to family caregivers by creating a tax credit for the costs of caring for an aging or ailing relative. A recent study found that the out-of-pocket costs for family caregivers average about $5,500 per year.  To help offset these costs, this legislation will allow families to qualify for a tax credit up to $1,200 per year.  The tax credit will begin to phase out for families making over $120,000 per year.

The AGE Act will also strengthen support for family caregivers by establishing the National Caregiving Resource Center.  This will be a central clearinghouse where families, public agencies and private organizations can learn about best practices and promising innovations to support families in their caregiving roles.  This legislation will also strengthen the National Family Caregiver Support Program, which helps fund direct services to family caregivers

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