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House Hearing Highlights Long-Term Care

APRIL 19, 2005 -- House Republicans and Democrats expressed hope that a hearing Tuesday on the growing burden of long-term care for seniors will lead to legislation. But as in previous years, the two parties' differences on the issue may be insurmountable.

Republicans favor offering tax incentives for people to buy private long-term care insurance policies, which now pay only about 3 percent of the estimated $200 billion spent annually on the services, according to the Congressional Budget Office (CBO). But Democrats say the insurance policies currently on the market aren't attractive to consumers and that long-term care should be covered by a government "social insurance" plan, much like Social Security.

"It should be a program, in my opinion, for which everyone pays a small amount, and from which everyone could benefit," Rep. Pete Stark, D-Calif., said at the House Ways and Means Health Subcommittee hearing.

The issue, like Social Security's financial condition, is gaining urgency as the baby boom generation prepares to retire. Most long-term care expenses, such as nursing homes or home nursing care, are now either donated, as with families who care for elderly relatives, or are paid by the government's Medicare and Medicaid programs. The two government medical programs pay a combined 38 percent of long-term care expenses, according to CBO.

Ways and Means Chairman Bill Thomas, R-Calif., has suggested combining an overhaul of Social Security with changes in the tax code and the way long-term care is provided, though he has not laid out specifics of such a plan. Other Republicans and the White House have said Congress should focus on Social Security alone.

It is unclear how the expenses of long-term care might increase in the future. The population is growing older; about 5 percent of Americans will be 85 or older by 2050, compared to 1.5 percent in 2000. But at the same time, they are growing healthier, with the incidence of impairment decreasing by about 6 percent per decade between 1910 and 1990.

"I do not believe we know how to provide long-term care services for the size population that's going to need them in 10 years," said subcommittee chairwoman Nancy L. Johnson, R-Conn. She said she has sponsored bills in the past and would do so again that would provide tax incentives for people to purchase private long-term care insurance policies.

Representatives of the long-term care industry say cuts proposed for Medicaid and Medicare are increasing the urgency for changes in the way the care is provided.

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