Starting with a whimper.
The most popular of these proposals, according to a survey conducted among middle-aged Americans by the American Health Care Association (AHCA), was a tax credit for up to $1,000 for individuals with long-term care needs or family members who care for them. There were two problems with this: tax credit eligibility implies that one has sufficient income to qualify. And, under the president's proposal, one would have to be significantly disabled to receive it. Specifically, individuals in need of long-term care must be unable to perform three of the five basic Activities of Daily Living and must have an income of at least $12,000, exclusive of Social Security. According to some tax analysts, this would reserve the tax credit primarily for disabled Americans who have earned income from investments, if only because it is rare that an individual who cannot feed or dress himself can earn enough from work to benefit from a large tax credit.
For family members who qualified, the tax credit would provide a lump sum equivalent to roughly $80 per month. Some observers have suggested that this is enough money to pay for occasional respite care for family members stressed by the demands of home healthcare. It is not, of course, in the same universe as total out-of-pocket long-term care costs now, in many areas, approaching $60,000 a year.
The second most popular provision of the president's long-term care agenda, said the AHCA survey, was the establishment of a $10 million national public education campaign on the available alternatives for long-term care financing. Although AHCA and its not-for-profit counterpart, the American Association of Homes and Services for the Aging (AAHSA), have already launched their own efforts to inform consumers about the need to plan for long-term care, the president proposes to focus public education efforts on Americans nearing Medicare eligibility, a more targeted audience and, in fact, not the primary one for long-term care planning, which is a more realistic concern of the fully employed, "prime of life" middle-aged.
The final element of the president's package does target that group and, from the federal government's perspective, is easily the most financially attractive of all. President Clinton called for the federal government to offer group rate long-term care insurance to federal employees and retirees and their family members. These approximately 20 million Americans would be responsible for paying their full premiums. Although, under federal rules, applicants would not be financially penalized for preexisting conditions, some insurance experts have suggested that this has made the group rate higher than premiums available to younger, healthier purchasers of individual long-term care insurance. In short, the federal plan is no bargain. Only time will tell whether federal employees will even consider these policies to be a viable option.
A good general rule is that purchasers get what they pay for, and that's as true of public policy as it is of other facets of life. By proposing superficially popular but weakly funded solutions for long-term care financing, President Clinton stirred up applause but offered little of genuine value. He can be credited for drawing attention to this immense but long-neglected issue. Perhaps, for the moment, that is enough.
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|Title Annotation:||long-term care financing|
|Author:||Stoil, Michael J.|
|Date:||Mar 1, 1999|
|Previous Article:||Getting everyone into the act.|
|Next Article:||Get ready for the GAO survey enforcement report.|