President Clinton Enacts Legislation to Provide Long-Term Care Insurance to Federal Workers (9/19/00)
Today, President Clinton will sign into law the Long Term Care Security Act, which authorizes the Office of Personnel Management (OPM) to negotiate with private insurers to offer more affordable, high-quality, long-term care insurance policies to Federal employees, retirees, and their families. This initiative will provide a new insurance option to 13 million Americans, and will serve as a model program for private employers throughout the nation. The President will also urge the Congress to take additional legislative steps this fall to provide assistance to the millions of Americans of all ages who currently have extraordinary unmet long-term care needs and who can not purchase private long-term care policies at any price. Specifically, he will call on the Congress to pass his $3,000 tax credit for the chronically ill; to reauthorize and strengthen the Older Americans Act by adding a new caregivers initiative; and to pass a long-overdue and voluntary Medicare prescription drug benefit.
MILLIONS OF AMERICANS HAVE LONG-TERM CARE NEEDS
- 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 70 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 – from approximately 4 million to 9 million.
- 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 families’ costs. In addition, not only are caregiving responsibilities expensive, they can be physically demanding and psychologically exhausting.
ENACTING NEW LONG-TERM CARE INSURANCE OPTION FOR FEDERAL EMPLOYEES. The legislation President Clinton will sign today, the Long Term Care Security Act (HR 4040), provides the 13 million Federal employees, retirees, and their families with a new option to purchase non-subsidized, quality private long-term care insurance. The new insurance options will cover a range of services at group rates, including home health care, adult day care, and nursing home care. This legislation allows OPM to use its purchasing power to negotiate savings of 15 to 20 percent on commercial long-term care insurance rates and to ensure that such products meet high quality standards. It will establish the Federal government as a model employer and provide private-sector companies with a model for offering quality long-term care insurance. Because employers are only beginning to learn how to provide these benefits to their workers, only about 4 million Americans – 1.5 percent of all Americans – have private long-term care insurance. OPM anticipates that approximately 300,000 Federal employees will participate in this program.
CHALLENGING THE CONGRESS TO PASS INITIATIVES TO HELP AMERICANS WHO NEED LONG-TERM CARE ASSISTANCE NOW. The Administration’s long-term care initiative, unveiled by President Clinton and Vice President Gore, First Lady Hillary Rodham Clinton and Tipper Gore, includes:
- Supporting people with long-term care needs and their families 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 phased in $3,000 tax credit. 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. 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. It costs about $8.8 billion over five years and $26.6 billion over 10 years.
- Reauthorizing and strengthening the Older Americans Act (OAA) to assist family caregivers of seniors. For more than 35 years, the OAA has helped millions of seniors lead more independent lives by enabling communities to offer them vital, everyday basics like transportation and meals-on-wheels. Today, President Clinton will urge the Congress to reauthorize the OAA and strengthen it by funding our Family Caregivers Program. 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. This program, which costs more than $1.25 billion over 10 years, would assist approximately 250,000 families nationwide. Recent studies have found that services like respite care can relieve caregiver stress and delay nursing home entry, and that support for families of Alzheimer’s patients can delay institutionalization for up to a year.
- Passing a new, voluntary Medicare prescription drug benefit. Older Americans who lack prescription drug coverage have been found to become institutionalized at twice the rate of those seniors with prescription drug coverage. In addition, this population requires and utilizes a much greater proportion of medications to manage and treat chronic conditions. For this reason, a meaningful, affordable, voluntary Medicare prescription drug benefit is a critical component of an effective long-term care strategy.
BUILDS ON THE NEW NURSING HOME INITIATIVE RECENTLY UNVEILED BY THE CLINTON-GORE ADMINISTRATION. Today’s announcement builds on President Clinton’s recent action to improve nursing home quality nationwide. The initiative: (1) invests $1 billion over 5 years in a new grant program to increase staffing levels nationwide and improve quality of nursing home care; (2) imposes immediate penalties on nursing facilities placing residents at risk and reinvests these funds in the new grant program; (3) directs the Health Care Financing Administration to establish national minimum staffing requirements and complete recommendations for appropriate reimbursement within two years; (4) helps families make informed decisions by providing accurate information on staffing levels; and (5) launches a new campaign to identify and prevent unintended weight loss and dehydration among nursing home residents.
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