ACLI Applauds White
House Long-Term Care Initiative;
Urges Federal Government to Support Private Sector Solutions
Washington, D.C.
(January 19, 2000) - The American Council of Life Insurers - which represents
more than 80 percent of the private long-term care insurance industry - today
applauded the $3,000 annual long-term care tax credit proposed by the White
House. But the ACLI asked President Clinton to broaden his initiative and work
with Congress to provide tax relief for those who take personal responsibility
for their long-term care needs by purchasing private insurance.
"President
Clinton's initiative will focus much-needed public attention on a problem that
already plagues one in four American families, and that will reach crisis proportions
as the baby boomer generation reaches retirement," said ACLI President and
CEO Carroll Campbell. "We are greatly encouraged that President Clinton is
spotlighting this growing problem.
"A tax credit
for families grappling with long-term care needs today is vital for easing
their immediate burden," Campbell said. " But over the long run,
encouraging the purchase of private insurance will be crucial for meeting the
nation's long-term care needs without crippling taxpayers and already strained
government programs."
Campbell called on
President Clinton and Congressional leaders to include tax incentives for
purchasing long-term care insurance in addition to the tax credit for current
long-term care costs. "We believe many consumers would choose this more
cost-effective and flexible route," he said.
"The
President's proposal for a $3,000 tax credit for American families with
long-term care needs addresses only part of the problem," Campbell said.
"It is just as important to provide an incentive for people who are still
healthy and who are still working to protect themselves and their families
through private sector products. At least 19 states have established tax
deductions or tax credits for long-term care insurance premiums, and it's time
that the federal tax code followed suit."<
He pointed to
bipartisan legislation that was introduced in Congress last year that would
have established an "above the line" tax deduction for long-term care
policy premiums - the same kind of
deduction already
allowed for contributions to 401(k) plans, IRAs and other retirement security
products. The bills were sponsored in the House by Connecticut Republican Nancy
Johnson and Florida Democrat Karen Thurman, both of the Ways and Means
Committee, and in the Senate by Iowa Republican Charles Grassley, chairman of
the Aging Committee, and Florida Democrat Bob Graham, who along with Grassley
serves on the Finance Committee. An above-the-line deduction was included in
last year's omnibus tax bill, which was vetoed by President Clinton. New
legislative attempts to establish an above-the-line tax deduction for long-term
care insurance are expected this year.
The White House
estimates the cost of its long-term care initiative at $28 billion over 10
years. Congress's Joint Committee on Taxation estimates the cost of an
above-the-line federal tax deduction for long-term care insurance premiums at
$8.7 billion over 10 years.
Campbell also
praised another component of the White House initiative: a proposal to make the
federal government a "model employer" by offering private long-term
care insurance as a benefit to federal employees. Congress is currently
considering several bills to do just that. At least 18 state governments have
already enacted enabling legislation to make long-term care insurance available
as a benefit for their employees.
"Too many
individuals - and their families - end up facing financial and emotional
devastation when the need for long-term care arises, and they're confronted
with the reality of what government programs can't do for them," Campbell
said. "The White House and Congress need to act now to encourage people to
incorporate private insurance products into their financial and retirement
planning."
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The American Council of Life
Insurance is a Washington, D.C.-based trade association. Its nearly 500
companies offer life insurance, annuities, pensions, long-term care
insurance, disability income insurance and other retirement and financial
protection products. ACLI member companies have 88 percent of the long-term
care insurance in force in the United States. |