June 23--HARTFORD -- U.S. Rep. Joe Courtney, D-2nd District, is reintroducing federal legislation that would create tax deductions and tax credits to help families afford long-term care insurance for the elderly and disabled.
The congressman visited the state Capitol complex Friday to unveil details of his bill, the Long-Term Care Retirement and Security Act. He was joined by state Sen. Edith Prague, D-Columbia, a lead advocate on aging issues who urged Courtney to pursue long-term care legislation during a recent "telephone town hall" event.
Private, long-term care insurance generally covers expenses for home care aides, physical therapy and assisted living facilities.
"People want to buy long-term care insurance, but they have not been able to because it has been so expensive," Prague said. "But with Congressman Courtney's proposal to allow them to deduct the premiums from their income tax, this is a real incentive for people to buy long-term care insurance.
"The caregivers will also be able to have an income-tax credit for the service that they're providing."
Courtney said the current system under Medicaid that requires individuals to exhaust nearly all of their savings to qualify for long-term care financial help is hard on families, and may not be financially sustainable for the government as the baby boom generation ages.
"We need to set up a better way to incentivize people to take on this risk through insurance, with a boost from a tax credit and a tax deduction, which is what this legislation does," he said.
Courtney acknowledged that similar legislation has been proposed in recent years, including by former Republican U.S. Rep. Nancy Johnson. He said he is working to drum up enough bipartisan support to finally get it passed.
Courtney said the Congressional Budget Office has yet to put a price tag on the bill.
"There is no question that tax credits have an impact on the budget," he said, "but doing nothing I think has an even bigger impact on the budget.
"If we just allow the demographics to stay in place, 80 million baby boomers who are going to begin hitting retirement age ... that budget cost is going to continue to mushroom."
Prague said she hopes the bill can survive the strong partisan environment in Washington.
"There's no political party that grows old by itself," observed the 86-year-old state senator, set to retire at year's end. "We're all going to grow old, and Republicans as well as Democrats have to face up to the issue."
The bill would create a tax deduction in an amount equal to the "applicable percentage" of "eligible" long-term care premiums, defined as 25 percent in 2013, 35 percent in 2014, 65 percent in 2015 and 100 percent in 2016 and thereafter.
It would establish a tax credit for caregivers of $1,500 in 2013, $2,000 in 2014, $2,500 in 2015 and $3,000 in 2016. It also would allow long-term care deductions under "cafeteria" plans and create consumer protections based on recommendations by the National Association of Insurance Commissioners.
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