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The President Triples His Long-Term Care Tax Credit

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Office of the Press Secretary

For Immediate Release January 19, 2000

January 19, 2000

Today, the Clinton Administration confirmed that the Presidentís budget will include a $3,000 tax credit for people with long-term care needs or their caregivers -- tripling the credit over last yearís proposal and increasing the total investment in long-term care to $28 billion over 10 years. This credit is the centerpiece of the Presidentís historic long-term care initiative that has won praise from senior groups and health policy experts. The initiative tackles the complex problem of long-term care that affects millions of elderly, people with disabilities and families who care people in need. In addition to the (1) tax credit, the initiative will (2) provide funding for services which support family caregivers of older persons; (3) improve equity in Medicaid eligibility for people in home- and community-based settings; (4) encourage partnerships between low-income housing for the elderly and Medicaid; and (5) encourage the purchase of quality private long-term care insurance by Federal employees. This initiative complements the Administrationís effort, spearheaded by the Vice President, to improve the quality of care in nursing homes. The President will commend Congress on giving this initiative serious consideration in the last session and urged it to finish the job this year.


  • An increasing number of Americans have a range of long-term care needs. Over five million Americans have significant limitations due to illness or disability and thus require long-term care. Approximately, two-thirds are older Americans. Also, millions of adults and a growing number of children have long-term care needs because of health condition from birth or a chronic illness developed later in life.
  • The aging of Americans will only increase the need for quality long-term care options. The number of Americans age 65 years or older will double by 2030 (from 34.3 to 69.4 million), so that one in five Americans will be elderly. The number of people 85 years or older, nearly half of whom need assistance with everyday activities, will grow even faster.


  • Families, who are the primary caregivers for people with long-term care needs, pay a big price for this care. Although it is difficult to quantify, one study found that the economic value of care giving for families ranges from $4,800 to $10,400 per caregiver. As such, this new $3,000 tax credit could cover up to 60 percent of familiesí costs.
  • Many family caregivers need supportive services to ensure that they do not place themselves at risk. Families and friends caring for people with long term care needs often need information and assistance in getting to supportive resources. Most of those who are the primary caregivers of older persons who have limitations in their level of functioning are elderly themselves. Frequently, these caregivers are providing physically demanding and psychologically exhausting care which places their own health and mental health at risk. These stresses tend to be even more severe for families of persons with Alzheimer's Disease, who generally have greater demands placed on their personal time, experience family conflicts, lack adequate sleep, and are faced with financial hardships because of jobs sacrificed or employment curtailed or compromised.
  • Private insurance is an important but relative new and untested option. Only about 4 million Americans -- 1.5 percent of all Americans -- have private long-term care insurance. Employers are only beginning to learn how to provide these benefits to their workers.

PRESIDENTíS LONG-TERM CARE INITIATIVE. The Clinton Administrationís long-term care initiative, which invests $10 billion over 5 years and $28 billion over 10 years, includes:

  • Supporting families with long-term care needs through a $3,000 tax credit. This initiative acknowledges and supports millions of Americans with long-term care needs or the family members who care for and house their ill or disabled relatives through a $3,000 tax credit. This credit would be phased in beginning with $1,000 in 2001 and rising in $500 increments, so eligible people would receive $3,000 in 2005 and thereafter. The credit would be phased out beginning at $110,000 for couples and $75,000 for unmarried taxpayers. This new tax credit supports the diverse needs of families by compensating a wide range of formal or informal long-term care for people of all ages with three or more limitations in activities of daily living (ADLs) or a comparable cognitive impairment. It would provide needed financial support to about 2 million Americans, including 1.2 million older Americans, over 500,000 non-elderly adults, and approximately 250,000 children per year. It costs about $8.8 billion over five years and $26.6 billion over 10 years.
  • Establishing a commitment to provide services to assist family caregivers of older persons. Recent studies have found that services like respite care can relieve caregiver stress and delay nursing home entry, and that support for families of Alzheimerís patients can delay institutionalization for up to a year. This nationwide program would support families who care for elderly relatives with chronic illnesses or disabilities by enabling states to utilize a visible, reliable network to provide: quality respite care and other support services; critical information about community-based long-term services that best meet a familiesí needs; and counseling and support, such as teaching model approaches for caregivers that are coping with new responsibilities and offering training for complex care needs, such as techniques to manage wandering and agitated behavior in late-stage Alzheimerís Disease. This program, which costs more than $1.25 billion over 10 years, would assist approximately 250,000 families nationwide.
  • Improving Equity in Medicaid eligibility for people in home- and community-based care settings. Historically, Medicaid policy and practice has inadvertently discriminated against people with long-term care needs who want to live in the community by making it much easier to provide coverage in nursing homes than in the community. This proposal would enable states to provide services to nursing-home qualified beneficiaries at 300 percent of the Supplemental Security Income (SSI) limit (about $15,000) without requiring a complicated and frequently time-consuming Federal waiver. This proposal contributes towards this goal of giving people with long-term care needs the choice of remaining in their homes and communities. It costs $140 million over 5 years, $370 million over 10 years.
  • Encouraging partnerships between low-income housing for the elderly and Medicaid. This proposal would provide $100 million in competitive grants to qualified low-income elderly housing projects (Section 202 projects) to convert some or all units into assisted living, so long as Medicaid home and community-based services and services for non-Medicaid residents are readily available. As people living in these housing facilities age, their need for long-term care services rises, often leaving them with no choice but to move to a nursing home. This proposal fund the conversion of their units or the buildings that they live in into assisted living facilities. Only sites that agree to bring Medicaid home and community-based services into their converted assisted living facilities would qualify for grants, to ensure that low-income elderly have access to this opportunity.
  • Having the Federal government serve as a model employer by offering quality private long-term care insurance to Federal employees. The Office of Personnel Management (OPM) to use its market leverage and set a national example by offering non-subsidized, quality private long-term care insurance to all federal employees, retirees, and their families at group rates. This proposal will provide employers a nationwide model for offering quality long-term care insurance. OPM anticipates that approximately 300,000 Federal employees would participate in this program.

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