Sowing the Seeds for Long-Term Care Insurance
Provider (07/02) Vol. 28, No. 7 p.22; Wagner, Lynn

Experts say the launch of the federal government's new long-term care insurance program for federal employees and retirees could provide a boost for the private long-term care insurance market, and will help educate the nation about its benefits. Legislation under consideration in Congress would give tax incentives for the purchase of long-term care policies and would allow employers to offer coverage as part of a cafeteria plan purchased with pretax dollars, making long-term care insurance more affordable. Although sales of long-term care insurance policies have risen steadily since the 1980's, experts say they have not reached the high levels that were predicted because of high costs and a lack of education. Statistics say, however, that the need for long-term care coverage is increasing--as the baby boomers age, the number of retirees is expected to double within the next 50 years. The federal long term care insurance program--established by the Long Term Care Security Act of 2000--will give employees, retirees, and family-members the chance to purchase insurance at lower group rates, decrease the tax payer's Medicaid burden, and include a campaign to educate employees and the general public about the importance of long term care insurance. Some experts argue that the high cost of the insurance for the elderly could deter it from becoming popular, and some say the government should improve public programs that are already in place instead of promoting long-term care coverage. The federal program and private insurers have tried to spur interest among the younger demographic with lower premiums, and experts say that a tax incentive is the only way to provoke the public to purchase the insurance. The federal Long Term Care and Retirement Security Act of 2001, which would provide an incentive, has received support from providers, insurers, caregivers, and lawmakers.

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