Long-Term Care Insurance can be vital in addressing our nation’s long-term care needs, particularly with an aging “boomer” generation that could eventually overwhelm our nation’s already financially strained government programs. It is imperative that Long-Term Care Insurance (LTCI) play a significant role in the financing of long-term care services. LTCI can ensure that significant personal care expenses that often occur with advanced age are met without burdening one’s family or depleting other financial assets. Contrary to popular misconception, Medicare does not cover the cost of custodial care, and Medicaid generally supports low-income individuals.
NAIFA supports proposals at the federal and state level to increase consumer options in the long-term care insurance (LTCI) market and incentivize individuals to purchase LTCI coverage. Congress should enact legislation that could facilitate access to long-term care insurance coverage, such as amending federal law to permit workers to buy LTCI with contributions to their employer-sponsored “cafeteria plans” or flexible spending accounts (FSAs). Helping people plan for their long-term care needs by allowing them to purchase LTCI coverage at their place of employment should be part of our nation’s answer to the long-term care financing challenge. We believe this will enable workers to manage their long-term care expenses in an affordable manner.
At both the federal and state level, NAIFA has long supported tax incentives to encourage individuals to purchase LTC coverage. Tax incentives for the purchase of long-term care insurance coverage would help ensure Americans can maintain their independence and protect them from devastating long-term care costs. More importantly, this would demonstrate the government's commitment to private coverage as an alternative for Americans to use for funding their own future LTC needs, lessen reliance on scarce public dollars and help promote individual responsibility.
Since enactment of the Deficit Reduction Act (DRA) in early 2006, which authorized the LTC Partnership Programs, NAIFA supported state efforts to participate in the program as a way of encouraging individuals to purchase LTC coverage.
NAIFA and industry coalition partners successfully lobbied to repeal the Community Living Assistance Services and Supports (CLASS) Act, a government-run long-term care insurance program, embedded in the Affordable Care Act. The CLASS Act was a financially unsound program that would have collapsed and required a large taxpayer bailout. NAIFA supports policies that will ensure a vibrant LTCI private market.