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House Lawmakers Introduce Long-Term Care Insurance Bill

By CQ Staff

August 8, 2007 – A bipartisan group of House lawmakers has introduced legislation (HR 3363) that would permit long-term care insurance to be included in employer-sponsored cafeteria plans and flexible spending accounts, allowing people to pay long-term care insurance premiums with pre-tax dollars.

Backers of the measure said it would help millions of baby boomers save for long-term care costs. Among Americans who are now 65, nursing homes will provide care for 44 percent of them, according to a news release from Rep. Earl Pomeroy, D-N.D., the bill's chief sponsor. The average cost for a one-year stay in a nursing home is $75,000, and by 2030, the cost will rise to nearly $207,000, according to the release. Medicare does not generally pay for long-term care and Medicaid covers costs for those who meet the program's income requirements.

According to the Pomeroy release, if three-quarters of individuals between the ages of 40 and 65, who can afford long-term care insurance, were to purchase and maintain policies throughout their senior years, the annual savings in Medicaid nursing home expenses would total $19 billion, and annual savings in out-of-pocket expenses would total $41 billion by 2030.

Cosponsors of the bill include Jim Ramstad, R-Minn., Allyson Y. Schwartz, D-Pa., and Kenny Hulshof, R-Mo.

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